A unilateral appointment of an arbitrator violates principles of unbiased dispute resolution. An arbitrator must be appointed consensually or by the court.

JUDGMENT (Oral)

1. By Way of present petition, petitioner is seeking appointment of an independent Arbitrator under the provisions of Section 11 of the Arbitration and Conciliation Act, 1996 read with Section 151 CPC.

2. Petitioner-company claims to be involved in the business of construction and Railway contracts, who vide acceptance letter dated 26.09.2016 of respondent was awarded work pertaining to "Balance work of quarters at Asoati Faridabad, construction of station building, power cabin, RRI and other station building, extension of platforms, retaining wall, development of circulating area, drainage arrangements in yards and other allied works at different location in between AST and Jn cabin TKD in C/W 4th line" for Rs.12,64,61,022.97 (Rupees Twelve Crore Sixty Four Lac Sixty One Thousand Twenty Two and Ninety Seven Paise only). The work was to be completed within stipulated period of 15 months i.e. 25.12.2017.

3. According to petitioner, petitioner had made all necessary arrangements, however, work could not be completed by the stipulated time i.e. 25.12.2017 due to several failures on the part of the respondent and so, the period for completion of work was last extended upto 01.12.2019. However, during execution of the work, various claims, clarifications and disputes arose between the parties, which were brought to the notice of concerned department of respondent, but instead of finding out any solution and acting oblivious to the genuine difficulties faced by the petitioner, respondent issued several notices to the petitioner with a view to escape/wriggle out from its contractual obligations and vide notice dated 23.09.2019 the respondent terminated the contract.

4. It is averred by the petitioner that respondent was under the obligation to serve 48 hours notice upon the petitioner before terminating the contract as mandated and so, petitioner vide its letter dated 23.07.2021, invoked the arbitration clause as contained under clause 64 of the General Conditions of the Contract.

5. At the hearing, learned counsel for the petitioner has submitted that petitioner claims amount to Rs.4,76,34,485/- (Rupees Four Crore Seventy Six Lac Thirty Four Thousand Four Hundred Eighty Five Only) against the respondent and therefore, the present petition be allowed.

6. On the other hand, learned counsel appearing for respondent has disputed the averments made by the petitioner and has submitted that in response to petitioner's letter dated 23.07.2021 invoking arbitration, respondent in its reply dated 23.08.2021 had sought waiver of Section 12(5) of the Act, however, it was not replied to by the petitioner. Further submits that in terms of Clause-64(3) of the General Conditions of Contract, if the total value of claim does not exceed Rs.25,00,000,, the Arbitral Tribunal shall consist of a Sole Arbitrator who shall be a Gazetted Officer of Railway not below JA Grade, nominated by the General Manager otherwise, the Arbitral Tribunal shall consist of a Panel of three Gazetted Railway Officers not below JA Grade or 2 Railway Gazetted Officers not below JA Grade and a retired Railway Officer, retired not below the rank of SAG Officer, as the arbitrators.

7. Both sides have been heard and record of this case has been perused.

8. Pertinently, invocation of arbitration vide letter dated 23.07.2021 by the petitioner is not disputed. Though the present petition has been opposed by learned counsel for respondent, however, it is not disputed that any dispute inter se parties has to be resolved through arbitration in terms as contained under clause 64 of the General Conditions of the Contract