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2025 Supreme(Mad) 2280

IN THE HIGH COURT OF JUDICATURE AT MADRAS 
ABDUL QUDDHOSE, J.
Tokala Ramakrishna - Petitioner 
Versus
The Union of India, Represented by the General Manager, Southern Railway - Respondent 
Arb.O.P.(Com. Div.) No.29 of 2025 
Decided on : 24-04-2025 


Advocates:
Advocate Appeared:
For the Appellant : Ms. A. Madhumathi
For the Respondent: Mr. V. Ashok Kumar Central Government Standing Counsel

The court must appoint an arbitrator when an arbitration clause exists, leaving disputes regarding the voluntariness of a 'No Claim Certificate' to the arbitrator.

Headnote:

(A) Arbitration and Conciliation Act, 1996 - Section 11 - Appointment of Arbitrator - Dispute arising from an agreement dated 11.10.2021 between contractor and employer - Existence of arbitration clause acknowledged by respondents - Dispute regarding the issuance of 'No Claim Certificate' under duress - Court's limited scrutiny in appointing arbitrator. (Paras 3, 4, 5)

(B) Arbitrability of Dispute - Court cannot decide on the voluntariness of the 'No Claim Certificate' as it is a matter for the arbitrator to determine. (Paras 3, 4)

Facts of the case:
The petitioner filed a petition under Section 11 of the Arbitration and Conciliation Act, 1996, seeking the appointment of an arbitrator due to a dispute arising from a contract with an arbitration clause. The respondents contended that the claim was not arbitrable due to a 'No Claim Certificate' issued by the petitioner, which the petitioner claimed was issued under duress.

Findings of Court:
The court found that the existence of the arbitration clause was undisputed and that it must appoint an arbitrator to resolve the dispute.

Issues: The main issues were whether the 'No Claim Certificate' was issued voluntarily or under duress and the court's authority to appoint an arbitrator.

Ratio Decidendi: The court ruled that it has limited scrutiny under Section 11 and must appoint an arbitrator when an arbitration clause exists, leaving the determination of the 'No Claim Certificate' to the arbitrator.

Result: Petition allowed; arbitrator appointed.

ORDER

This petition has been filed under Section 11 of the Arbitration and Conciliation Act, 1996 , seeking for appointment of an Arbitrator by this Court.

2. There seems to be a dispute between the petitioner and the respondents arising out of the Agreement dated 11.10.2021. The petitioner is the contractor and the respondents are the employer. There exists an arbitration clause in the General Conditions of contract which are applicable to Railways and the same is extracted hereunder:

" 64.(1): Demand for Arbitration:

64.(1)(i): In the event of any dispute or difference between the parties hereto as to the construction or operation of this contract, or the respective rights and liabilities of the parties on any matter in question, dispute or difference on any account or as to the withholding by the Railway of any certificate to which the Contractor may claim to be entitled to, or if the Railway fails to make a decision within 120 days, then and in any such case, but except in any of the "excepted matters" referred to in Clause 63.1 of these Conditions, the Contractor, after 120 days but within 180 days of his presenting his final claim on disputed matters shall demand in writing that the dispute or difference be referred to arbitration.

64.(1)(ii)(a): The demand for arbitration shall specify the matters which are in question, or subject of the dispute or difference as also the amount of claim item- wise. Only such dispute or difference, in respect of which the demand has been made, together with counter claims or set off, given by the Railway, shall be referred to arbitration and other matters shall not be included in the reference.

64.(1)(ii)(b): The parties may waive off the applicability of Sub-Section 12(5) of Arbitration and Conciliation (Amendment) Act 2015, if they agree for such waiver in writing, after dispute having arisen between them, in the format given under Annexure XV of these conditions.

64.(1)(iii)(a): The Arbitration proceedings shall be assumed to have commenced from the day, a written and valid demand for arbitration is received by the Railway.

64.(1)(iii)(b): The claimant shall submit his claims stating the facts supporting the claims alongwith all the relevant documents and the relief or remedy sought against each claim within a period of 30 days from the date of appointment of the Arbitral Tribunal.

64.(1)(iii)(c): The Railway shall submit its defence statement and counter claim(s), if any, within a period of 60 days of receipt of copy of claims from Tribunal, unless otherwise extension has been granted by Tribunal.

64.(1)(iii)(d): Place of Arbitration: The place of arbitration would be within the geographical limits of the Division of the Railway where the cause of action arose or the Headquarters of the concerned Railway or any other place with the written consent of both the parties.

64.(1)(iv): No new claim shall be added during proceedings by either party. However, a party may amend or supplement the original claim or defense thereof during the course of arbitration proceedings subject to acceptance by Tribunal having due regard to the delay in making it.

64.(1)(v): If the Contractor(s) does/do not prefer his/their specific and final claims in writing, within a period of 90 days of receiving the intimation from the Railways that the final bill is ready for payment, he/they will be deemed to have waived his/their claim(s) and the Railway shall be discharged and released of all liabilities under the contract in respect of these claims.

64.(2): Obligation During Pendency of Arbitration: Work under the contract shall, unless otherwise directed by the Engineer, continue during the arbitration proceedings, and no payment due or payable by the Railway shall be withheld on account of such proceedings, provided, however, it shall be open for Arbitral Tribunal to consider and decide whether or not such work should continue during arbitration proceedings.

64.(3): Appointment of Arbitrator:

64.(3)(a): Appointment of Arbitra

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