IMPORTANT POINT
The main legal point established in the judgment is the importance of impartiality and independence of arbitrators, as well as the need for a balanced approach to arbitration, as emphasized by the interpretation of the Arbitration and Conciliation Act, 1996 and relevant legal provisions.

JUDGMENT :

1. Heard Mr. R. Choudhury, learned counsel for the petitioner and Mr. K Gogoi, learned CGC for the respondent.

2. This is a petition filed under section 11 of the Arbitration and Conciliation Act, 1996 by the petitioner seeking intervention of this Court in the matter of appointment of arbitral tribunal in adjudicating the disputes between the petitioner and the respondents arising out of a contract agreement for cleaning washing and transportation of linen sets to and from the premises of the Indian Railways in Guwahati.

3. The brief facts leading to the filing of this present petition can be summarized as below:

I. Pursuant to an NIT dated 08.02.2018, for outsourcing works in relation to cleaning, washing and transportation of linen sets to and from railway premises for a period of 3 years, wherein the petitioner herein participated, a contract was executed between the petitioner and the respondent railways.

II. Certain disputes arose between the parties and accordingly a seven days notice in terms of clause 62 of the GCC was issued. Thereafter, alleging non compliance, a notice of 48 hours was issued to the petitioner by the railways on 05.08.2019.

III. Thereafter on 07.08.2019, the contract was terminated. The bank guarantee deposited by the petitioner in terms of the contract was sought to be en-cashed. Accordingly, two writ petitions were filed by the petitioner assailing the termination of contract and assailing the encashment of bank guarantee. This court by interim orders stayed the encashment and subsequently the writ petitions were disposed of granting liberty to the petitioner to seek adjudication of his disputes by arbitration. It was further provided that the interim order passed earlier shall continue and the same can be modified by the Arbitrator.

IV. Thereafter the petitioner issued a notice raising the dispute and inviting appointment of arbitrator. The petitioner also nominated/proposed the name of sole arbitrator to adjudicate the dispute between the parties in terms of clause 64.1(2)(a).

V. Thereafter, the railways in reply to such notice, by its communication dated 30.12.2022 advised the petitioner to demand arbitration to the general manager NF Rly Maligaon in writing with the subjects.

VI. The petitioner thereafter communicated that the mechanism of appointment of arbitral tribunal under contractual scheme between the parties has been held to be invalid, void ab initio by the Hon’ble Apex Court and therefore claimed that such procedure of appointment of arbitrator cannot be acted upon. It was further claimed that since the General Manager, NF Rly, Maligaon is also a party to the dispute, therefore, such GM cannot sit over its own case as an adjudicator and accordingly the petitioner reiterated its demand for nomination of the arbitrator proposed by the petitioner as the sole arbitrator.

VII. Alleging inaction on the part of the railways, the present application has been filed under section 11(6) read with section 11(4) in the Arbitration and Conciliation Act’1996 for appointment of an arbitrator by this court.

4. While deliberating on their respective cases, the learned counsel for the parties had confined their argument to the dispute raised as regard the procedure of appointment of arbitrator in terms of the arbitration clause contained in the contract and the resultant impartiality of such arbitrator. No dispute as to the existence of the arbitration clause, privity of contract between the petitioner and the respondent has been raised. Arbitrability of the dispute arising out of the termination of the contract in question has also been raised.

5. Clause 64.3(b)(II) of the Standard General Condition of Contract (hereinafter refers to as GCC) contains the provision of constitution and composition of the arbitral tribunal. Such clause prescribes that the arbitral tribunal shall comprise of three retired officers, namely, officers who have worked for the railways and the appointing authority shall be the