The main legal point established in the judgment is that for an agreement to be considered as an Arbitration Agreement, it must fulfill the essential attributes as required by the relevant Act, including the intention of the parties to make a reference to arbitration and treat the decision of the arbitrator as binding.

1. The instant application under Section 11 of the Jammu & Kashmir Arbitration and Conciliation Act, 1997 (for brevity, the Act) seeks reference of the dispute between the parties to an arbitrator. It is well settled that in order to succeed for securing such a reference there has to be an arbitration agreement between the parties apart from existence of a dispute. Mr. Naik, learned counsel for the petitioner has placed reliance on Clause 14 of the agreement dated 30.04.2008 duly executed between the parties. It is claimed that this Clause fulfills all the attributes of an arbitration agreement and therefore a reference to arbitrator must be made. The aforesaid Clause is set out below in extenso:-

14. SETTLEMENT OF DISPUTES

14.1 In the event of any dispute, disagreement or different arising out of or in connection with this Agreement, including any question regarding its performance, existence, validity, termination and the rights and liabilities of the Parties to this Agreement (Dispute), the Parties shall in the first instance endeavor to amicably settle the same through negotiations carried out in good faith.

14.2. For the purpose of conducting such negotiations, each Party shall designate in writing to the other Party a representative who shall be authorized to negotiate on its behalf with a view to resolving any Disputes (the Representative). Each such Representative shall remain so authorized until his replacement has been designate in writing to the other Party by the Party he represents.

14.3. The Representative of the Party which considers that a dispute has arisen shall give to the Representative of the other Party, a written notice setting out the material particulars of the dispute (Dispute Notice). Within thirty days, or such longer period as may be mutually agreed, of the Dispute Notice having been delivered to the other Party, the Representatives of both Parties shall meet in person, to attempt in good faith and using their best endeavors at all times to resolve the Dispute. Once the Dispute is resolved, the terms of the settlement shall be reduced in writing and signed by the Representatives of the Parties.

2. According to Mr. Naik, Clause 14 have all the attributes of arbitration agreement. In support of his submissions he has placed reliance on paras 5, 8, 9 and 10 of the judgment of Hon'ble the Supreme Court rendered in the case of Punjab State & Ors. V. Dina Nath, AIR 2007 SC 2157.

3. Having heard the arguments and closely examining the language, content and intendment of clause 14, I am of the considered view that it falls far short of an Arbitration Agreement. It appears to me that the contents of Clause 14.1 and 14.2 are necessary steps for amicable settlement. However, it does not talk of any binding nature of resolution nor it talks of impartial nature of such resolution by representatives of such parties. Even Clause 14.3 does not contemplate that parties would be bound by the resolution adopted by their representatives. It may be regard as a reference for mediation who are to cordially resolve the issue. There is no stipulation for impartial and fair resolution of the dispute.

4. Section 7 of the Act postulates various essential attributes of Arbitration Agreement. What would be those essential attributes of an Arbitration Agreement is no longer res integra. In the case of K.K. Modi v. K.N. Modi, (1998) 3 SCC 573 it has been held that the following six essentials must be present:-

(1) The arbitration agreement must contemplate that the decision of the tribunal will be binding on the parties to the agreement,

(2) That the jurisdiction of the tribunal to decide the rights of parties must derive either from the consent of the parties or from an order of the Court or from a statute, the terms of which make it clear that the process is to be an arbitration,

(3) The agreement must contemplate that substantive rights of parties will be determined by the agreed tribunal,

(4) That the tribunal will det