( 1 ) THIS is a petition under Section 11 of the Arbitration and Conciliation Act filed by the petitioner seeking an appointment of the Arbitrator on the ground of the failure of the respondent to appoint an arbitrator within the notice period as given by the petitioner.

( 2 ) BEFORE coming to the legal issues arising for consideration, the salient facts may be noted.

(I) The petitioner had been awarded a contract for construction of a Five Star Deluxe Hotel, for the respondent-Corporation at Chandigarh, vide a work order issued on 7th May, 1999.

(II) Disputes had arisen in execution of the construction contract. The construction contract contained an arbitration agreement between the parties in the following terms:-

ARBITRATION Clause -48

EXCEPT where otherwise provided in the contract all questions and disputes relating to the meaning of the specifications, designs, drawings and instructions herein before mentioned and as to the quality o workmanship or materials used on the work or as to any other question, claim, right matter or thing whatsoever, in any way arising out of or relating to the contract, designs, drawings, specifications, estimates, instructions, orders or these conditions or otherwise concerning the works or the execution or failure to execute the same whether arising during the progress of the work or after the completion or abandonment thereof shall be referred to the sole arbitration of the Managing Director/chief Engineer of the India Tourism Development Corporation or any other person appointed by him. There will be no objection to any such appointment that the arbitrator so appointed is an employee of India Tourism Development Corporation and that he had to deal with the matters to which the contract relates and that in the course of his duties as Government he had expressed views on all or any of the matters in dispute or difference. The arbitrator to whom the matter is originally referred being transferred or vacating his office or being enable to act, for any reason, Managing Director/chief Engineer shall appoint another person to act as arbitrator in accordance with the terms of the contract. Such person shall be entitled to proceed with the reference from the stage at which it was left by his predecessor. It is also a term of this contract that no person other than a person appointed by the Managing Director/chief Engineer, as aforesaid should act as arbitrator and if for any reason, that is not possible, the matter is not to be referred to arbitration at all. In all cases where the amount of the claim in dispute is Rs. 50,000/- (Rupees Fifty thousand) and above, the arbitrator shall give reasons for the award.

SUBJECT as aforesaid the provisions of the Arbitration Act 1940 or any statutory modification or re-enactment thereof and the Rules made thereunder and for the time being in force shall apply to the arbitration proceedings under this clause.

IT is term of the contract that the party invoking arbitration shall specify the dispute or disputes to be transferred to arbitration under this clause together with the amount or amounts claimed in respect of each such dispute.

THE arbitrator (s) may from time to time with consent of the parties enlarge the time for making and publishing the award.

THE work under the contract shall, if reasonably possible, continue during the Arbitration proceedings and no payment due or payable to the contract shall be withheld on account of such proceedings.

THE Arbitrator shall be deemed to have entered on the reference on the date he issues notice to both the parties fixing the date of the first hearing.

THE Arbitrator shall give a separate award in respect of each dispute or difference.

THE venue of Arbitration shall be such place as may be fixed by the Arbitrator is his sole discretion.

THE award of the Arbitrator shall be final, conclusive and binding on all parties to the Contract. "

(III) The petitioner aggrieved by the non-settlement of its claims,