JUDGMENT :

Shekhar B. Saraf, J.

1. The instant application [being A.P. No. 785 of 2022] under Sections 14, 15 and 11(6) of the Arbitration and Conciliation Act, 1996 [hereinafter referred to as the ‘Act’] has been filed by M/S Gammon Engineers and Contractors Private Limited [hereinafter referred to as the ‘Petitioner’], a company having its registered office at Gammon House, Veer Savarkar Marg, Prabhadevi, Mumbai City – 400025 and its regional office at 19, Ballygunge Circular Road, 2nd Floor, Kolkata – 700019. The petitioner is engaged in the business of carrying out construction and civil works, which includes public works on behalf of the central and state governments.

2. The respondent is the State of West Bengal [hereinafter referred to as the ‘Respondent’] represented through the Executive Engineer, Teesta Irrigation Division, Assam More, Jalpaiguri – 735101.

3. The petitioner has filed the application against the unilateral appointment of an arbitrator by the respondent alleging violation of Clause 25 of the General Conditions of Contract [hereinafter referred to as the ‘Contract’].

Relevant Facts

4. In 2011, the respondent offered bids for an e-Tender which included the construction of Dy. 6 of Teesta Jaldhaka Main Canal including its structure of 12 nos. of minors with total length of the Canal spreading approximately 53.181 km.

5. On March 27, 2012, the petitioner tendered its bid, which was accepted by the respondent for an amount of Rs.1,36,86,88,135.73/- and a final letter of acceptance was issued on May 23, 2012. On the very next day the respondent issued a work order as per which the construction was to commence from June 1, 2012, and be completed by May 31, 2014.

6. However, towards the end of the term, the construction was not complete. The petitioner listed their concerns via a letter in May 2014 which was met with threats of legal actions and the respondent terminated the contract vide letter dated August 1, 2014.

7. On August 20, 2014, the respondent served a notice of invocation of seven bank guarantees aggregating to a sum of Rs.6,84,34,407/- which were furnished by the petitioner. The petitioner while submitting their final statement of accounts on September 16, 2014, claimed an amount of Rs.50,26,89,550/- to be due. The same was refused by the respondent on December 1, 2014. This refusal prompted the initiation of the arbitral proceedings by the petitioner vide a notice dated December 1, 2014 wherein the petitioner proposed names of retired Judges and a suggestion was also made that an Arbitral Tribunal be constituted of three members.

8. The respondent, vide communication dated December 30, 2014, appointed Shri Ajay Kumar Basak, a former employee of Inland and Waterways Directorate, Government of West Bengal, as the sole arbitrator to resolve the dispute between the parties.

9. The said application has been filed by the petitioner in response to the unilateral appointment of the arbitrator by the respondent.

10. It is also pertinent to mention that the respondent filed an application under Section 9 of the Act before the District Judge at Jalpaiguri. The said application was partially allowed and disposed of vide an order dated February 17, 2017.

The Submissions

11. It is apposite now to mention the contentions put forth by counsels of both sides.

12. Mr. Swatarup Banerjee, learned counsel appearing on behalf of the petitioner has put forward the following arguments :

a. Clause 25 specifically authorised the Chief Engineer of the department to operate as the sole arbitrator. There was no mention that the said Chief Engineer had the authority to appoint someone else. In the present dispute, the respondent appointed Shri Ajay Kumar Basak, a former employee of Inland and Waterways Directorate, Government of West Bengal, having served the respondent as ex-chief engineer, as arbitrator for the petitioner’s reference.

b. Clause 25 did not empower the chief engineer to appoint a former employee or a person who was otherwise