( 1 ) BY this application filed under Section 11 (5) of the Arbitration and Conciliation Act, 1996 (for short "the New Act"), the petitioner, a registered partnership firm represented by its Managing Director, is praying for appointment of a sole arbitrator by the Honourable Chief Justice or any other person or institution designated by the Honourable Chief Justice. In compliance with the direction issued by the Honourable Chief Justice, the matter was listed before me.

( 2 ) THE claims in respect of which arbitration is sought are of the value of Rs. 1,16,18,336/ -.

( 3 ) BY an agreement dated 7-10-1991 concluded between the General Manager, Railway Electrification Central Organisation, Allahabad and the petitioner, construction of Electric Loco Shed and its ancillary works in Lalaguda, Secunderabad, was entrusted to the petitioner and the work was required to be completed within two years - from 3-6-1991 to 2-6-1993. The estimated value of the contract was Rs. 2,45,11,415. 45. It is stated that subsequently, from time to time, certain additional works also were entrusted to the petitioner and the total value of the works entrusted to the petitioner was Rs. 3,45,11,415. 45. The petitioner made certain claims on 6-4-1993 seeking compensation for the loss allegedly sustained because of certain lapses on the part of the Railway administration and enhancement of rates was also sought. From the Railways s side, the response was unilateral termination of the contract on 23-7-1993. The petitioner claimed to have executed works of the value of Rs. 76. 98 lakhs by 2-8-1993 and by a letter dated 27-1-1994, the petitioner sought settlement of the claims. Since the claim was not acceded to, a legal notice was got issued on 10-6-1994 by the petitioner for which a reply was given on 20-6-1994 by the Central Organisation, Railway Electrification, Allahabad, informing the petitioner:"the claims preferred under your letter referred above have been examined by the Competent Authority and it is found that in view of GCC and other conditions of contract agreement, none of the claims is fit for reference to Arbitrator. "by a legal notice dated 12-10-1994, the petitioner called upon the General Manager, Central Organisation, Railway Electrification, Allahabad (the first respondent) to refer the dispute to arbitration. A reply notice was sent on 20th October, 1994/2nd November, 1994 informing the petitioner that a reply in this behalf was already communicated on 20-6-1994.

( 4 ) A suit- O. S. No. 44 of 1995- was laid on 27-12-1994 by the petitioner in the Court of the III Additional Judge, City Civil Court, Hyderabad under sub-sections (3) and (5) of Section 20 of the Arbitration Act, 1940 for appointment of an arbitrator and reference of the matter to such arbitrator. Notice was issued to the respondent. Although the notice was received by the respondent, no written statement was filed by 18-12-1996 on which date, the suit was withdrawn by the petitioner.

( 5 ) THIS application was resisted by the respondents contending that since the arbitral proceedings had already commenced under the Arbitration Act, 1940 (for short "the Old Act"), the present application is not maintainable.

( 6 ) SECTION 85 of the New Act deals with repeal and savings. By sub-section (1) of Section 85 of the New Act, the Old Act of 1940 and two other enactments have been repealed. Sub-section (2) says :" (2) Notwithstanding such repeal- (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act came into force; (b ). . . . . . . . . . . . ". From a reading of the above provision, it is clear that if the arbitral proceedings had not commenced under the old Act, there is no bar for invoking the provisions under the New Act. The question for consideratio