The court established that the modified provisions of the General and Special Conditions of Contract (GCC) regarding the constitution of the Arbitral Tribunal were applicable in railway contracts, and both parties had the right to nominate their respective Arbitrators.

JUDGMENT

Ashis Kumar Chakraborty, J. - In this application under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act of 1996') the petitioner company has prayed for appointment of a sole Arbitrator to resolve the disputes arisen between themselves and the respondent, Eastern Railway relating to the Contract No.CE/C/VI/71 of 2012-2013 dated March 6, 2013 (hereinafter referred to as ' the said contract').

2. It is the case of the petitioner company that in terms of the said contract they had to carry out the work involving earthwork in filling, cutting, blanketing, construction of minor bridges, platform walls/flooring, drains, station buildings, gate lodges, roads, etc. and other ancillary works in Bandel (including yard) and Talandu (including yard up to Km. 51.00) in connection with the construction of the third line between Bandel and Bainchi. The terms and conditions under which the petitioner had to carry out the said work were those mentioned in the said contract, as well as the General and Special Conditions of Contract framed by the respondent Railway (hereinafter referred to as 'the GCC'). Clause 63 read with clause 64(1) of the GCC contemplated that all disputes arising between the parties to said contract would be first referred by the contractor to the railway and if the latter fails to decide the matter referred to by the former within 120 days, such matters may be referred to arbitration by the contractor within 180 days of his presenting his final claim on the disputed matters. Since the total value of the work allotted to the petitioner by the respondent railway was more than Rs.10 lac as per clause 64(3)(a)(ii) of the GCC all disputes and differences arisen between the parties to the said contract would be decided by an Arbitral Tribunal. In this regard, clauses 64(3)(a)(ii) and 64(3)(a)(iii) of the GCC are extracted below:

"64.(3)(a)(ii) In cases not covered by clause 64(3)(a)(i), the Arbitral Tribunal shall consist of a Panel of three Gazetted Railway officers not below JA Grade, as the arbitrators. For this purpose, the Railway will send a panel of more than 3 names of Gazetted Rly. Officers of one or more departments, of the Rly. to the contractor who will be asked to suggest to General Manager upto 2 names out of the panel for appointment as contractor's nominee. The General Manager shall appoint at least one out of them as the contractor's nominee and will also simultaneously appoint the balance number of arbitrators either from the panel or from outside the panel duly indicating the presiding arbitrator from amongst the 3 arbitrators so appointed. While nominating the arbitrators it will be necessary to ensure that one of them is from the Accounts department. An officer of selection grade of the Accounts department shall be considered of equal status to the officers in SA Grade of other departments of the Railways for the purpose of appointment of arbitrators.

64.(3)(a)(iii) If one or more of the arbitrators appointed as above refuses to act as arbitrator withdraws from his office as arbitrator or vacate his/their office/offices or is/are unable or unwilling to perform his functions as arbitrator for any reason whatsoever or dies or in the opinion of the General Manager fails to act without undue delay, the General Manager shall appoint new arbitrator/arbitrators to act in his/their place in the same manner in which the earlier arbitrator/arbitrators been appointed. Such re-constituted Tribunal may at its discretion, proceed with the reference of the stage at which it was left by the previous arbitrator(s). 64.(3)(a)(iv) "

3. According to the petitioner, with the introduction of sub-section (5) of section 12 as well as the Seventh Schedule to the Act of 1996 with effect from October 23, 2015 the General Manager of the respondent railway became ineligible to be involved in the process of constitution of the Arbitral Tribunal and, as such, an independent person i