Judgment

BRIJESH KUMAR, J.

( 1 ) THIS petition under Section 11 of the Arbitration and Conciliation Act, 1996 (for short "the Act") has come up before me on being designated for appointing an arbitrator, by the Honble the Chief Justice of India.

( 2 ) LEARNED Senior Counsel appearing on behalf of the respondent raised an objection that there is no concluded contract between the parties, hence no arbitration agreement as well. It is also emphasised that no agreement has been executed by the parties. That being the position, there is no occasion for the petitioner to move the petition for appointment of an arbitrator. It has also been indicated that the letter of intent (LOI) as issued, was cancelled by the respondent by means of a letter dated 4-6-2002, since the bank guarantee furnished was a conditional bank guarantee and not unconditional as per stipulation. It is contended that though the arbitrator is competent to decide any dispute regarding existence or validity of the agreement but prima facie there must be some agreement on the basis of which arbitration clause may be invoked. In absence of any such prima facie material or evidence of an agreement, the provisions of Section 11 (6) cannot be invoked. In support of its contention that there must be an agreement between the parties, reliance has been placed on U. P. Rajkiya Nirman Nigam Ltd. v. Indure (P) Ltd. and india Meters Ltd. v. Punjab SEB that there must be consensus ad idem between the parties for there being any valid arbitration clause.

( 3 ) LEARNED counsel appearing for the petitioner had submitted that in response to a global tender the petitioner had tendered its bid which was found to be the lowest and technically qualified, hence it was accepted by the respondent on 10-5-2002. LOI was also issued and the petitioner had then furnished the bank guarantee. The supply order was to be issued within 7 days of furnishing of the bank guarantee but since no such order was issued the petitioner ultimately served a legal notice upon the respondent and called upon it to appoint its arbitrator by invoking the arbitration clause which it failed to do. It is submitted that it is not necessary to have a formal agreement executed between the parties. It can be even by way of exchange of letters and other such communication. So far as the contract is concerned, he has referred to the definition of "contract" as provided in PRCL Standard conditions of Contract (2000), according to him which means and includes the invitation to tender, instructions to tenders, acceptance of tender etc. The petitioner has also denied the letter dated 4-6-2002 said to be issued by the respondent cancelling LOI. It is indicated that this letter is an afterthought and not genuine. He has referred to a decision Konkan Rly. Corpn. Ltd. v. Rani Construction (P) Ltd. on the point that the arbitrator is competent to decide upon the validity and existence of an arbitration agreement. In this connection, Section 16 of the Act has also been referred to.

( 4 ) CONSIDERING all facts arid circumstances and the contentions raised by the respective parties, it is to be noted that it is not one of those clear-cut cases as contended, in which it could be said that there is no contract at all between the parties, on the face of it. The matter is such that it may require probe and enquiry into the objections raised by the respondent and it is only feasible and appropriate that the arbitrator himself may embark upon any such enquiry in case any objection or issue is raised by the respondent before the arbitrator regarding existence of an agreement between the parties.

( 5 ) IN the result, the petition is allowed and a case for appointment of an arbitrator is held to be made out.

( 6 ) WHILE reserving the orders, after conclusion of the arguments, I had asked the learned counsel for the parties, that in case it would be found that an arbitrator is to be appointed, would it be possible to indicate any name to which bo