GITA MITTAL, J.

( 1 ) THIS petition has been filed on behalf of the petitioner under Section 11 (6) of the Arbitration and Conciliation Act, 1996 seeking appointment of an arbitrator. The petitioner places reliance on an agreement dated 9th April, 2003 whereby it was awarded the civil construction work of Babhalli Hydro electric Project, Punjab vide contract no. GPGC-2003/civil Works/001 which was to the tune of Rs. 6,09,82,995/ -. According to the petitioner, the project for the hydro electric power production was funded by the World Bank. Pursuant to the terms of agreement, the petitioner had furnished a performance guarantee in the prescribed form for an amount of Rs. 30,50,000/ -.

( 2 ) THIS petition has been necessitated as, according to the petitioner, its running bills for the work done from time to time for the purposes of verification and payment, have been disregarded by the respondent. According to the petitioner, it received ad hoc payments on account basis which was much less than the value of the bills raised from time to time, thereby, causing huge arrears to get accumulated to be paid by the respondent. As an instance, the petitioner has alleged that bills upto 30th May, 2004 valued at Rs. 19,17,691/-for payment were paid only to the extent of Rs. 9,10,962/ -. The petitioner has contended that it has completed work to the tune of Rs. 35,00,000/- in the month of June/july, 2004 and has requested for the release of the payment immediately. Vide letter dated 25th August, 2004, it claims to have submitted the fourth and fifth running bills of the work done upto 30th June, 2004 and 31st July, 2004 respectively. By a letter dated 1st September, 2004, it has been claimed that the petitioner called for the payment on outstanding bills to the tune of rs. 58,73,662/ -. It has been asserted that this was followed by a legal notice dated 9th March, 2005 calling for the outstanding amount and invoking the provisions of arbitration notifying the respondent that in case of failure to comply with the notice demand, measures would be taken up in the court of law. A second legal notice was sent on 19th May, 2005.

( 3 ) THE petitioner has alleged that this resulted in the respondent agreeing to a meeting with the petitioner which was held on 20th May, 2005 and certain issues of dispute were agreed to be looked into positively. The memorandum of understanding in this behalf has been placed before this court.

( 4 ) THE petitioner has submitted that on the request of the respondent, the petitioner had agreed to enhance the amount of the bank guarantee and had also extended the existing guarantee upto 3rd December, 2005. Thereafter, though the bank guarantee expired, yet the same was extended by three months upto June, 2006. According to the petitioner, the respondent has refused to settle out the differences even in terms of the memorandum of understanding dated 20th May, 2005 which relates to non-payment of running bills, payment of extra work done, amount towards escalation on account of increase in the prices of raw material etc. On these facts, by way of the present petition, the petitioner has prayed for appointment of an arbitrator under Section 11 (6) of the Arbitration and conciliation Act, 1996.

( 5 ) THIS petition has been opposed on behalf of the respondent on three major grounds. Mr. Raman Gandhi, learned counsel appearing for the respondent, has urged that the agreement between the parties provided the mechanism whereby disputes redressal was required to be undertaken. It is pointed out that the agreement dated 19th April, 2003 between the parties stipulated that certain conditions of contract would form part of this agreement. Clause 24 of this agreement provided for an adjudicator to adjudicate upon the disputes. It has been pointed out that the adjudicator namely Col. G. L. Bajpai had been named by the parties in the agreement. In case of retirement or death of an adjudicator, Clause 26 of the Special Conditions