( 1 ). THE above named petitioner has filed this petition under Section 20 of the Arbitration Act, 1940 (hereinafter referred to as the "act") a direction on the respondent to file the Arbitration Agreement in the court and for referring the disputes between the parties to an Arbitrator which may be appointed by this Court.

( 2 ). THE petition has been filed with the averments and allegations that the petitioner is a partnership firm duly registered under the Partnership Act and is engaged in the manufacture and supply of machinery and equipment for industrial purposes inter-alia including radial drilling machines. Vide a Contract Agreement dated 2. 4. 1992, the respondent No. 2 awarded a contract to the petitioner for supply of 22 Nos. of radial drilling machines at different destinations. However, the formal agreement on the contract form was executed on 29. 9. 1992. After the award of the work and completing the requisite formalities the petitioner undertook the manufacturing of the machines and actually supplied 9 radial drilling machines at various destinations. The remaining machines could not be supplied within the stipulated period and the period for supply was extended upto 30. 9. 1994 but due to exigencies inter-alia arising out of force majeur conditions. the petitioner could not supply the balance number of machines. Vide a letter no. DGET-7 (4)/92-CPIU/pe dated 16. 2. 1995 the respondent no. 2 terminated the Contract Agreement. Vide another communication dated 16. 2. 1995, the respondent No. 2 threatened to initiate action for forfeiture of the performance Guarantee No. B/g 38/24 dated 14. 7. 1992 in the sum of Rs. 4,71,704/- which was issued by the State bank of India, Batala (Punjab) on the request of the petitioner. The petitioner tried to explain to the respondent the circumstances under which the balance number of radial drilling machines could not be supplied but to no avail.

( 3 ). ITIS alleged that the Contract Agreement dated 2. 4. 1992 and 29. 9. 1992 contain an Arbitration Agreement in Clause 15 which reads as under:

"15. 0 Settlement of disputes and arbitration: 15. 1 It is specifically agreed to between the parties that all differences or disputes between them arising out of this contract shall be settled by the process of resolution of Disputes as specified in Clause 27. 0, section GCC of Conditions of Contract, Vol. I and Clause 12. 0 of Special Conditions of Contract Vol. IA. (Delhi courts alone shall have exclusive jurisdiction.)

CLAUSE 27. 0 Section GCC of Conditions of Contract vol. I also contain a similar clause. 27. Resolution of Disputes: 27. 1 The purchaser and the Supplier shall make every effort to resolve amicably by direct informal negotiations any disagreement of dispute arising between them under or in connection with the contract.

27. 2if, after thirty days from the commencement of such informal negotiations, the Purchaser and the Supplier have been unable to resolve amicably a Contract dispute, either party may require that the dispute be referred for resolution to the formal mechanism which may include, but are not restricted to, conciliation mediated by a third party, adjudication in an agreed national or international forum, and/ or international arbitration. The precise mechanism shall be specified in the Special conditions of contract. "

(C)CLAUSE 12. 0 of Special Conditions of Contract Vol. IA. as under: 12. 0 Resolution of Dispute (Clause 27. 0) the dispute resolution mechanism to be applied pursuant to clause 27 of the General Conditions shall be as follows:

(A)IN the case of a dispute between the Purchaser and a Indian Supplier, i. e. a citizen and/or or permanent resident of India, a firm or a company duly registered or incorporated in India, the Arbitration shall be conducted by three arbitrators, one each to be nominated by the supplier and the purchaser, and third to be named by the president of Institution of Engineer, India. If either of the parties fails to a