The Kerala Revocation of Arbitration Clauses and Reopening of Awards Act, 1998 applies only to contracts related to the Kallada Irrigation Project and does not nullify the Arbitration and Conciliation Act for contracts in which the Government is a party, except in the case of agreements within the meaning of Section 2(1)(a) read with Section 2(1)(b).

1. 1. The question involved in this Arbitration Request is whether the dispute is arbitrable in view of the bar contained in the Kerala Revocation of Arbitration Clauses and Reopening of Awards Act, 1998, Act 12 of 1998 (hereinafter referred to as the 'Awards Act').

2. The Government of Kerala, acting through the Special Officer, Theerapatham Urban Development Project, invited tenders for the work of "Water Supply Project (Short Term) in Identified Water Scarce Areas of Thiruvananthapuram City" as per Tender Notice dated 27.10.2003. The applicant submitted tender as a joint venture along with M/s.Kirloskar Brothers Ltd., Pune and M/s.Godavari Polymers Pvt. Ltd., Hyderabad. The tenders were considered and the tender submitted by the petitioner was accepted by the first respondent. On 25.3.2004, a contract agreement was entered into between the applicant and the first respondent acting through the second respondent.

3. Disputes and differences arose between the parties in relation to the work. Correspondence took place between the parties. Annexure A6 letter dated 22nd March 2010 issued by the applicant indicates that the applicant had requested for holding a mutual discussion and the Project Director was requested to indicate the convenient dates. Mutual discussion is contemplated under clause 24.1 of the Conditions of Contract Act forming part of the agreement. However, no discussion took place. The applicant invoked the arbitration clause contained in clause 24.2 of the Conditions of Contract. The applicant nominated and appointed Justice B.M.Thulasidas, Former Judge of the High Court of Kerala as one of the arbitrators. The respondents were requested to nominate "the employer's nominee arbitrator". No reply was sent by the respondents to Annexure A6 letter. Therefore, the applicant has filed this Arbitration Request under Section 11 (6) and (8) of the Arbitration and Conciliation Act, 1996.

4. Clauses 24.1 and 24.2 of the General Conditions of Contract provide for Dispute Resolution by arbitration, which read as follows:

"24.1 Dispute Resolution Procedure If there is any difference or dispute or controversy relating to or arising out of this agreement, the same shall be mutually discussed and resolved between the parties within fifteen working days. If the dispute or controversy has not been resolved mutually by the parties, the same shall be referred for arbitration as under.

24.2 Arbitration

In the event that the parties are unable to resolve any dispute, controversy or claim relating to or arising out of this agreement, such dispute, controversy or claim shall be finally settled by a panel of arbitrators (the "Arbitration Panel"), in accordance with the Arbitration & Conciliation Act, 1996.

The Arbitration Panel consists of three arbitrators. The employer shall appoint one arbitrator and the contractor shall appoint one arbitrator. The two arbitrators so appointed shall appoint a third arbitrator, who will be the Presiding Arbitrator and the arbitration proceedings shall be conducted in accordance with the Arbitration & Conciliation Act, 1996. Any award by the Arbitration Panel shall be binding on the parties. The venue of arbitration shall be Thiruvananthapuram."

5. In the counter affidavit filed on behalf of the first respondent, it is contended that going by clause 25.1 of the Conditions of Contract, the contract is to be governed by and construed in accordance with the Indian Laws. As per Section 3 of the Kerala Revocation of Arbitration Clauses and Reopening of Awards Act, 1998 (Act 12 of 1998), the arbitration clause in every agreement in which Government is a party stands cancelled. The Awards Act applies to the various works of the Government of Kerala and the work in question being one of that nature, the arbitration clause cannot be invoked by the applicant. It is also contended that the arbitration clause is void ab initio. The learned Government Pleader also relied on the decision in Kerala Wate