1. By way of this application under Section 11(6) of the Arbitration and Conciliation Act, 1996 (‘the Act of 1996’), the petitioner has made the request for appointment of an Arbitrator to adjudicate upon and decide all its disputes with the respondents, arising out of, and relating to, the Contract Agreement dated 31.03.2012.

2. It is the case of the petitioner that it had entered into a Contract Agreement dated 31.03.2012 for the work of ‘Resurfacing of Runway in Aerodrome area at HAL Airport, HAL (Bengaluru Complex)’ with the respondents. The respondents issued the Work Order dated 29.04.2013 stipulating the date of completion as 14.01.2014. The petitioner executed and completed the work on 31.12.2013 and the respondent No.4 issued completion certificate on 20.02.2014. After receipt of respondent’s letter dated 04.04.2015 intimating the approval of the final deviation order, the petitioner submitted its final bill dated 30.05.2015, claiming a sum of Rs.1,27,13,608/- including interest of Rs.19,04,756/- up to date, excluding the retention money of Rs.69,77,057/-, which was refundable after end of the defect liability period. The petitioner also claimed the refund of EMD amount of Rs.10,70,000/-.

3. It is submitted that with the expiry of the defect liability period on 31.12.2016, the petitioner, by its letter dated 02.01.2017, requested for release of security deposit and other amount payable as per the earlier letter dated 30.05.2015. It is alleged that on 05.05.2017, the respondent No.3 insisted upon the petitioner to withdraw the claim of interest and compensation from the final bill as a precondition to process the final bill, to which the petitioner did not agree. The respondent No.3, by his letter dated 12.05.2017, replied that the delay in payment of bills was only due to noncompliance of contractual obligations by the petitioner. It is submitted that the petitioner, by its letter dated 02.02.2018, again requested the respondent No.2 to release the amount due without insisting on the petitioner to surrender its right to claim interest.

4. It is further submitted that since the respondents failed to perform their obligations as per agreement, the petitioner served legal notice to the respondents on 04.05.2018 calling upon them to comply with the demand contained in the letter dated 02.02.2018, failing which arbitration proceedings would be initiated. It is pointed out that the respondents replied on 01.06.2018, through their advocate, denying all the claims.

5. In view of the above, the petitioner has preferred this application seeking appointment of an independent Arbitrator for adjudication of its disputes with the respondents arising out of and relating to the aforesaid Contract Agreement dated 31.03.2012. The petitioner has also submitted that in view of the amendment to the Act of 1996 by the Amendment Act of 2015, the Manager, Director or any person who is a part of the management of the respondent or having controlling influence in the management, is ineligible to be appointed as an Arbitrator and hence, an independent Arbitrator deserves to be appointed by this Court.

6. Learned counsel for the respondents has endeavored to argue that in view of provisions contained in sub-section (5) of Section 12 of the Act of 1996, the Managing Director or the Manager or the Company may not be considered eligible to act as an Arbitrator in the matter and the same had been the assertion of the petitioner in its notice dated 04.05.2018 as also in this petition. Therefore, according to learned counsel for the respondent, the entire arbitration clause is invalidated and it cannot be said that there exists an arbitration agreement between the parties.

7. Having heard learned counsel for the parties and having perused the material placed on record, this Court is clearly of the view that on the contentions urged by the parties and with reference to the law applicable, for the ineligibility of the officer of the respondent company