JUDGMENT

Tarun Chatterjee, J. —

1. Leave granted.

2. This appeal is directed against the judgment and final order dated 26th of October, 2006 of the High Court of Kerala at Ernakulam in AR No 18 of 2006 whereby, the High Court had allowed the prayer for appointment of the arbitrator at the instance of the respondents and directed the parties to submit their disputes to arbitration.

3. The pivotal questions that need to be decided in this appeal are:

i) Whether the levy of liquidated damages under clause 16.2 of the tender document is an “excepted matter” in terms of clause 20.1 of the said document so that the same cannot be referred to arbitration or looked into by the arbitrator.

ii) Whether clause 62 of the special conditions of the tender document will prevail over clause 16.2 of the general conditions of the contract.

4. The relevant facts, which would assist us in appreciating the controversy involved are narrated in a nutshell, which are as follows:

The appellant had issued a notice inviting tender dated 4th of January, 2001, calling upon the eligible bidders for turn key project on planning, engineering, supply, installation and commissioning of Indian Mobile Personal Commu