In Brief
Grasim Industries Ltd, a wood pulp manufacturer, held agreements with the Kerala Government for bamboo felling rights dating back to 1958. The original agreement contained an arbitration clause (clause 16). Multiple supplementary agreements followed, with a 1988 supplement stating unmodified clauses would remain in force. When the Government later sought to appoint an arbitrator, the High Court rejected Grasim's claim as time-barred. The Supreme Court held that the arbitration clause subsisted because it was never expressly modified, and limitation was governed by the Limitation Act (3 years from invocation of arbitration), not by contractual restrictions. The appeal was allowed and a retired Supreme Court judge appointed as sole arbitrator.
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