The main legal point established in the judgment is that the existence of a valid and enforceable arbitration agreement is a condition precedent for reference of a dispute to arbitration.

YOGESH KHANNA, J.

1. The petitioner has filed the application under Section 11 (6) and Section 11 (8) of the Arbitration and Conciliation Act, 1996 (hereinafter referred as ‘the Act’) for appointment of the arbitrator to adjudicate the claim of the applicant against the respondent on the following facts:

(a) the Architect of the Respondent, namely M/s. Pratap Parikh Associates, had issued a tender for the work of the Respondent along with the terms of the articles of the agreement and conditions of contract. The Applicant submitted its bid to the Architect of the Respondent at New Delhi;

(b) the Respondent accepted the bid and accordingly issued a work award letter dated 04.08.2010 in favour of the Applicant for Civil, Sanitary and Water Supply and External Development Works for Construction of the weaving and processing unit of Respondent at 'Focal Point', Ludhiana, Punjab. The said letter of Award was received by the Applicant at New Delhi. The Applicant had also executed the articles of agreement and conditions of contract and submitted the original of the same to the Architect of the Respondent at the office of the Architect at New Delhi. The Letter of Award along with the conditions of contract together formed the contract between the parties;

(c) the Applicant carried out the works at the site of the Respondent and from time to time submitted its bills for payments. There was always a delay by the Respondent in making the payment of the amounts that were due to the Applicant. The works were completed by the Applicant in August, 2012 and the final bill was submitted on 05.11.2012. The Architect of the Respondent certified the bill of the Applicant for a payment of a sum of Rs.1,36,75,526/- and there was a previous balance of Rs.21,72,959/- to be paid by the Respondent to the Applicant under the certificate dated 18.09.2012. The Respondent was also obliged to pay a sum of Rs.15,37,315/- to the Applicant towards release of retention money. Thus, without even taking into consideration the claims of the Applicant, even as per the certificate of the Respondent's Architect, a total sum of Rs.1,73,85,799/- was/is due and payable by the Respondent to the Applicant. It is pertinent to mention that the Applicant did not agree with the deductions proposed by the Architect of the Respondent in its certificate dated 18.09.2012;

(d) on 01.02.2013, the Respondent forwarded an email dated 31.01.2013 written by the Respondent to its Architect, in which the Respondent had wrongly and falsely denied the dues of the Applicant and in fact, had sought to wrongly and illegally and contrary to the terms of the agreement, proposed to debit a sum of Rs.1,64,54,796/- on the Applicant. This was nothing but an attempt by the Respondent to create some dispute in order to delay the payments of the Applicant;

(e) the Conditions of contract forming part of the contract between the Applicant and the Respondent contains an arbitration agreement, which provides as under :-

"SETTLEMENT OF DISPUTE ARBITRATION:

All disputes and differences of any kind whatever arising out of or in connection with the contract or the carrying out of the works (whether during the progress of the works or after their completion, and whether before or after the determination, abandonment or breach of the Contract) shall be referred to and settled by the Architects who shall state their decision in writing. Such decision may be in the form of a final certificate or otherwise. The decision of the Architect with respect to any of the excepted matters shall be final and without appeal as stated in Clause No.43 but if either the Employer or the Contractor be dissatisfied with the decision of Architects or any matter, question or the dispute of any kind (except any of the accepted matters) or as to the with-holding by the Architects of any certificate to which the Contractor may claim to be entitled, then and in any such case either party (the Employer or the Contractor) may within tw