By way of this application under Section 11 of the Arbitration and Conciliation Act, 1996 (‘the Act of 1996’), the petitioner has made a request for appointment of Sole Arbitrator to adjudicate upon and decide all its disputes with the respondents, arising out of, and relating to the Contract Agreement No.CAO/CN/BNC/73104/A/100/II/2010 dated 12.02.2010.

2. Put in brief, the relevant background aspects of the matter are that the respondent No.2, the Chief Administrative Officer (Constructions), South Western Railway, Bengaluru, invited offers for the works titled “Arsiker-Birur patch doubling – Devanur yard re-modelling including formation, ballast, track linking, regarding construction of station building, FOB, Platform, PF shelters and other miscellaneous works” through tender notice No.CAO/CN/BNC/037/09 dated 19.06.2009. The petitioner submitted its tender on 23.07.2009 and after negotiations, the respondent No.3 conveyed acceptance through the Letter of Acceptance bearing No.W.496/15AKRB/07 dated 02.09.2009. In terms of the Acceptance Letter, the total value of the work was Rs.5,47,14,765/- and the same was to be completed within six months i.e., on or before 01.03.2010. Later, an Agreement bearing No.CAO/CN/BNC/73104/A/100/11 dated 12.02.2010 was executed with the General Conditions of Contract (‘GCC’) of the Engineering Department of South Western Railway and the Special Conditions and Specifications of Contract governing the contract. With reference to the copy of the GCC, the petitioner has pointed out that such conditions also provide the dispute resolution mechanism and for reference to arbitration. Clauses 63 and 64 of GCC have been referred in that regard.

3. The case of the petitioner is that it had mobilized man and machinery to execute the work within the time specified, but there had been delay caused due to the protests by the farmers; and it was revealed that the tender had been called without ensuring completion of land acquisition process. Further, according to the petitioner, the detailed drawings and plans were approved long after awarding the work and then, the respondents put extreme pressure to take up additional earthwork beyond the quantity in the agreement; and they also took a long time in processing variation statement, which resulted in blockage of a sum of Rs.90 lakhs.

4. The petitioner would submit that notwithstanding the delay due to the fault of respondents, they imposed penalty at the rate of Rs.25,000/- per week from 02.03.2010 to 31.08.2010 and then, increased the penalty to Rs.30,000/- per week from 01.09.2010 to 30.11.2010. The petitioner has pointed out that this way, a sum of Rs.27,45,438/- was recovered towards penalty for the alleged delay and the representations for waiver of penalty were not heeded to; and such imposition of penalty had the cascading effect as it made the petitioner disentitled for PVC bills and was condemned to face financial misery. The petitioner has referred to several communications dated 16.02.2011, 18.05.2011 and 10.08.2011 for waiver of penalty.

5. It is also submitted that to the extent possible, the works were completed by the petitioner on 20.12.2010 except circulating area, PF shelter, road works, which remained pending for want of approval of variation in quantities; that the variations were conveyed only on 07.06.2012; and that the work was finally completed on 20.02.2013. The petitioner has pointed out that after completion of the work, the representations dated 05.03.2013 and 18.03.2013 were sent to the respondents, but without any response. Further, the petitioner addressed the letter dated 13.02.2015 demanding payment of withheld amount as also damages, but this letter also did not evoke any response.

6. The petitioner has submitted that in view of inaction on the part of the respondents, it had invoked Clause 64 of the GCC providing for arbitration and made a request to the respondent No.1 i.e., the General Manager (South Western Railway), Hubl