The court upheld the appointment of an arbitrator under Section 8(2) of the Arbitration Act to resolve the dispute regarding the execution of a work contract, despite the state's contention that it should be determined by a civil court.

ORDER

1. Under Section 8(2) of the Arbitration Act, the Subordinate Judge, Peddapalli at the instance of the respondent appointed an arbitrator to give an in respect of the dispute relating to the execution of a work contract.

The appeal against the said order has been dismissed by the High Court in limine. The State has now appealed to this Court challenging the order appointing the arbitrator.

2. Mr Nambiar, learned counsel for the State has relied upon two government notifications dated 24-10-1983 and 1-6-1987 in support of his contention that the dispute cannot be decided by the arbitrator but must be determined by a civil court in a properly constituted suit. We have perused the terms of the notifications. The first notification dated 24-10-1983 is not precise in terms as to the forum of adjudication of claims above Rs 50,000 b but the second notification dated 1-6-1987 expressly provides that all claims above Rs 50,000 shall be decided by the civil court of competent jurisdiction by way of a regular suit. If first notification was clear enough as to the jurisdiction of the civil court to decide all claims above Rs 50,000, it was unnecessary to issue the second notification substituting the uncertainty in para 3 of the first notification. It is not in dispute that the second notification C is only prospective and apparently not applicable to the case on hand since the claim in question arises out of the contract dated 4-3-1986.

3. We therefore, see no reason to interfere with the order of the Subordinate Judge as affirmed by the High Court.

4. The appeal is accordingly dismissed with costs.