1. The petitioner- M/s Mahindra Bros seeks appointment of Arbitrator on the disputes projected by it in Paragraph No. 31 of the Petition which are stated to have arisen between it and the Union of India in respect of Contract CA No. CEUZ-19/2003-04, Prov. Of OTM Accm for 3rd TRD INF BN at Bhadarwah, because Union of India had refused to appoint Arbitrator on the ground that resort to arbitration in terms of Condition 70 of IAF 2249, General Conditions of Contract forming part of the Contract entered into between the parties could be had only if the parties agreed therefor in writing, and in any case not until the Contract was either completed or otherwise terminated.

2. Union of India contests the petitioner's request for appointment of Arbitrator urging that having completed only 75% of the work, the petitioner was not entitled to seek appointment of Arbitrator unless the work was completed by it or was otherwise rescinded. The claims of the petitioner are stated false and inflated.

3. According to Union of India, having failed to complete the work even after six years of the original period of completion indicated in the Contract Agreement and the extension allowed to it from time to time, the petitioner was not granted further extension of the Contract period and was told to first complete the work before its case was considered for extension of Contract.

4. Heard learned counsel for the parties.

5. The amount claimed by the petitioner for the works allegedly executed by him, having been disputed by Union of India on various grounds, the dispute regarding payment or otherwise of the claims projected by the petitioner, therefore, exists between the petitioner and Union of India, which in terms of Condition 70 of IAF 2249, forming part of the Contract, is referable to arbitration. The only question that, therefore, needs to be considered is as to whether or not the petitioner was entitled to seek appointment of Arbitrator in view of the objection raised by Union Of India that the Arbitrator cannot be appointed unless it agreed therefor or the work was otherwise rescinded.

6. To examine the issue, regard needs to be had to Condition 70 of the Contract Agreement, which reads thus:

"70. Arbitration.- All disputes, between the parties to the Contract (other than those for which the decision of the C. W. E. or any other person is by the Contract expressed to be final and binding) shall, after written notice by either party to the Contract to the other of them, be referred to the sole arbitration of an Engineer officer to be appointed by the authority men#31;tioned in the tender documents.

Unless both parties agree in writing such reference shall not take place until after the completion or alleged completion of the Works or termination or determination of the Contract under Condition Nos. 55,56 and 57 hereof. Provided that in the event of abandonment of the Works or cancellation of the Contract under Condition Nos. 52,53 and 54 hereof, such reference shall not take place until alternative arrangements have been finalized by the Government to get the Works completed by or through any other Contrac#31;tor or Contractors of Agency or Agencies.

Provided always that commencement or continuance of any arbitration proceeding hereunder or otherwise shall not in any manner militate against the Government's right of recovery from the contractor as provided in Condition 67 hereof.

If the Arbitrator so appointed resigns his appointment or vacates his office or is unable or unwilling to act due to any reason whatsoever, the authority appointing him may appoint a new Arbitrator to act in his place. The Arbitrator shall be deemed to have entered on the reference on the date he issues notice to both the parties, asking them to submit to him their statement of the case and pleadings in defence.

The Arbitrator may proceed with the arbitration, exparte, if either party, inspite of a notice from the Arbitrator fails to take part in the proceedings.

The Arbitrat

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