JUDGMENT :

Shekhar B. Saraf, J.

1. The petitioner B. K. Consortium Engineers Private Limited (hereinafter referred to as the ‘BKC’) has filed this application under Section 11 of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as ‘the Act’) praying for appointment of a sole arbitrator to adjudicate the disputes which have arisen between the parties.

2. The petitioner has challenged the appointment procedure of the arbitrator, provided in its contract with the respondent Indian Institute of Management, Calcutta (hereinafter referred to as the ‘IIMC’), which empowers the IIMC director to appoint a sole arbitrator for dispute resolution between the parties.

Facts

3. The factual matrix of the case is delineated below –

a. A notice inviting tender dated July 9, 2008 was issued by the respondent for civil work and basic utility works for the proposed residential (hostel) complex at IIMC, Joka. A bid was submitted by the petitioner and in response to the same, a work order was issued on August 29, 2008, in terms of which the project was required to be completed within August 31, 2009, at a total cost of INR 39,03,20,185 (Rupees Thirty-Nine Crores Three Lakhs Twenty Thousand One Hundred Eighty-Five Only). Subsequently, a formal contract being CDP/6 of 2008-09 was entered into by and between the petitioner and respondent in respect of the said work as stipulated in the said work order.

b. During the course of execution of the work, the respondent, from time to time, introduced additions to the scope of work, and as a result, the value of the contract stood revised to INR 80,23,73,260/-(Rupees Eighty Crores Twenty-Three Lakhs Seventy-Three Thousand Two Hundred Sixty Only). The petitioner sought extension from the respondent on the following grounds –

i. Delay in handing over clear work site; the piling work being done by another contractor was not completed before September 2009, and hence the clear site area could not be handed over to the petitioner till September 2009;

ii. Additions and alterations incorporated during the contract period;

iii. Various changes in the specifications were introduced;

iv. The execution of the project was suspended for a considerable period. The work resumed only on March 14, 2011.

In view of the aforesaid, the time for completion of work was extended by the respondent from time to time. The last of such extensions was granted till August 31, 2014. The work was completed in all aspects by August 31, 2014.

c. The respondent issued the final bill on March 11, 2016 and the petitioner accepted the same by way of a letter dated March 15, 2016, under the signature of two directors of the petitioner, namely C. Mozumder and U.S. Mozumder. The acceptance stated that “we accept the final bill and final settlement of all demands against the contract and we will not prefer any claim in future in this regard”. By way of another letter dated March 17, 2016, bearing the signature of B.K. Mozumder, Chairman and Managing Director of the respondent, the acceptance of the final bill was reiterated but in addition to this, a request for price escalation was made. Pursuant to the acceptance of the final bill, the final completion certificate was issued by the respondent on May 5, 2016. It is to be noted here that this was not the first time price escalation requests were submitted to the respondent.

d. On May 16, 2016, the petitioner sent another letter claiming price escalation. It was acknowledged in the said letter that the final bill against work done has been settled, and the retention money against the contract has been refunded by the respondent. However, the petitioner also stated, in the said letter, that its escalation claim under Clause 10(CC) of the contract has not been settled yet. Surprisingly, it also sought permission from the petitioner to invoke arbitration in terms of clause 25 of the said contract.

e. After a brief lull, letter dated August 25, 2017 was sent by the petitioner with respect to the earlie