The court established the principle that the provisions of the Arbitration and Conciliation Act, 1996 would not be applicable to an award rendered under the Permanent Machinery of Arbitration, based on the express language of the executive order and the arbitration clause.

VIBHU BAKHRU, J

1. The petitioner has filed the present petition under Section 36 of the Arbitration and Conciliation Act, 1996 (hereafter 'the Act') seeking to enforce the Award dated 17.02.2011 rendered by the arbitrator appointed under the Permanent Machinery of Arbitration (hereafter 'PMA'). The PMA was constituted pursuant to the executive order (OM) dated 22.01.2004, which required the Central Public Sector Undertakings to resolve their, inter se, disputes by arbitration under the PMA.

2. The said OM expressly provided that the "PMA shall not entertain the disputes referred to it without the proper Arbitration Clause". The arbitration clause annexed with the OM expressly provided that the Act would be inapplicable to arbitration conducted under the PMA. The said clause reads as under:-

"In the event of any dispute or difference relating to the interpretation and application of the provisions of the contracts, such disputes or difference shall be referred by either party for Arbitration to the sole Arbitrator in the Department of Public Enterprises to be nominated by the Secretary to the Government of India in-charge of the Department of Public Enterprises. The Arbitration and Conciliation Act, 1996 shall not be applicable to arbitration under this clause. The award of the Arbitrator shall be binding upon the parties to the dispute, provided, however, any party aggrieved by such award may make a further reference for setting aside or revision of the award to the Law Secretary, Department of Legal Affairs, Ministry of Law & Justice, Government of India. Upon such reference the dispute shall be decided by the Law & Justice, Government of India. Upon such reference the dispute shall be decided by the Law Secretary or the Special Secretary/Additional Secretary, when so authorized by the Law Secretary, whose decision shall bind the Parties finally and conclusively. The Parties to the dispute will share equally the cost of arbitration as intimated by the Arbitrator."

3. The question as to the enforceability of an award rendered under the PMA and the applicability of the provisions of the Act were considered by a Division Bench of this court in M/s IRCON International Ltd. v. M/s National Building Construction Corporation Limited : EFA (OS) No. 22/2006 decided on 28.11.2008. In the said case, the Division Bench of this court held as under:-

"24. Resolution of disputes by arbitration is now governed by the Arbitration and Conciliation Act, 1996, under which parties may by means of agreement in writing, agree to refer to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. It also makes provisions about composition of the Arbitral Tribunal, its jurisdiction, the conduct of arbitral proceedings, the making of arbitral award and termination of proceedings, the recourse against the award.

25. If by an agreement the parties exclude the provisions of an Act they can easily escape the clutches of law without any difficulty. Every jural relationship has to be governed by some law of the land and the parties cannot contract out of statute.

26. It is well established that a statute ousting jurisdiction of a civil court must be strictly constructed, and it is for the party seeking to oust the jurisdiction of an ordinary civil court to establish that there is no jurisdiction. (see AIR 1966 SC 1718 para 9; AIR 1967 SC 781 Para 13). In the case of Smt. Ganga Bai v. Vijay Kumar AIR 1974 SC 1126 the Supreme Court held :

"There is an inherent right in every person to bring a suit of a civil nature and unless the suit is barred by any statute one may, at one's peril, bring a suit of one's choice. It is no answer to a suit, howsoever frivolous the claim, that the law confers no such right to sue. A suit for maintainability requires no authority of law and it is enough that no statute bars the suit."

27. The object of the rule is, that no party/per