1. The petitioner had engaged the respondent (claimant) for constructing a building for Regional Provident Commissioner at Kolkata. The agreement to that effect was executed on 21st August, 1994. It was initially agreed upon by and between the parties the starting date for execution of the work was to be 27th August, 1994, and the work was to be completed in twenty four months. The projected date of completion of the work, thus, was 26th August, 1996. The value of the contract was Rs. 90,34,898/- (Rupees ninety lacs thirty four thousand eight hundred and ninety eight only). The date of completion of work was extended by approximately twenty eight and the actual date of completion of work was 21st December, 1998. Clause 25 of the contract provided for resolution of disputes arising out of the contract by arbitration. In this clause, the Chief Engineer, Central Public Works Department in charge of the work at the material point of time was specified to be the arbitrator and the administrative head of the same organization was specified to be the arbitrator if there was no chief engineer.

2. Dispute had arisen in relation to certain claims made by the contractor after payment