Arbitration clauses establishing party-designated arbitrators can become unworkable; disputes may still be arbitrable through court appointment of an arbitrator under statutory provisions.

JUDGMENT (Oral)

1. This Section 11 petition emanates out of a contract agreement dated 18th July, 2016 executed between NTPC Ltd. (Respondent 2 herein) and the petitioner, in which Respondent 1 IRCON International Ltd. (IRCON) acted as the agent/power of attorney holder of NTPC.

2. The details of the dispute are not relevant for the purposes of the present order, in view of the limited objections raised by the respondent, represented by Mr. Rituraj Biswas.

3. Clause 50.0 of the contract agreement provides for resolution of the disputes arising from the agreement by arbitration. Sub-clause 50.1 thereunder reads thus:

"50.1 This shall be governed by NTPC GCC subject to the provisions of Indian Arbitration and Conciliation Act, 1996 and it's up to date amendments."

4. The General Conditions of Contract (GCC) of the NTPC which, as per Clause 50.1 of the contract agreement, governs the arbitration, contained the following arbitration clause:

"56. Except where otherwise provided for 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 of 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 General manager of NTPC Limited, and if the General Manager is unable or unwilling to act, to the sole arbitration of some other person appointed by the Chairman and Managing Director, NTPC Limited, willing to act as such arbitration. There will be no objection if the arbitrator so appointed is an employee of NTPC Limited and that he had to deal with the matters to which the contract relates and that in the course of his duties as such he had expressed views on all or any of the matters in dispute or difference. The arbitrator to whom the matter is originally related being transferred or vacating his office or being unable to act for any reason as aforesaid at the time of such transfer, vacation of office or inability to act, Chairman and Managing Director, NTPC Limited, shall appoint another person to act as arbitrator in accordance with the terms of the contract. It is also a term of this contract that no person other than a person appointed by CMD, NTPC Ltd., 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."

5. Disputes arose between the parties. On 8th February, 2019, the petitioner wrote to the NTPC, invoking arbitration. The NTPC replied on 26th March, 2019 requiring the petitioner to, in the first instance, attempt an amicable resolution of the dispute. This attempt did not fructify.

6. It appears that, thereafter, the respondent called on the petitioner to submit a no-claim certificate, which the petitioner claims to have submitted under pressure and duress.

7. Thereafter, the petitioner wrote to the respondent, alleging that certain amounts were due from the respondent to the petitioner. The respondent did not pay the said amounts following which, on 14th March, 2020, the petitioner withdrew its no claim certificate and again re-invoked arbitration.

8. The issue of whether the issuance and subsequent withdrawal of no claim certificate would impact the arbitration