The main legal point established in the judgment is that the court has the power to appoint an independent arbitrator when there is a reasonable apprehension of bias or lack of impartiality in the named arbitrator, as mandated under Section 11(8) of the Arbitration & Conciliation Act, 1996.

AJAY KUMAR MITTAL, J.

1. The petitioner has filed the instant petition under Section 11(4), (5) and (6) of the Arbitration & Conciliation Act, 1996 (in short, “the Act”) for appointment of an arbitrator for resolution of disputes with the respondent.

2. A few facts relevant for the decision of the controversy involved as narrated in the petition may be noticed. The petitioner is an engineering company. It has developed technology for efficient management of effluent discharged in the public sewerage system. The respondent floated a tender for up-gradation of existing sewerage treatment plant of 15 MGD capacity to 30 MDG at Diggian near Chandigarh to treat the incoming sewerage to the standard of BOD 30 mg./l by installing new units of 15 MGD on MBBR technology. The said tender was performance-run for six months as per DBIT on lumpsum/turnkey basis along with operation and maintenance of 120 months after successful trial for 180 days. On 28.2.2007, the petitioner company was awarded the contract and agreement was executed between the parties. The respondent was represented through Executive Engineer. Clause 25-A of the agreement provided for arbitration in case of dispute. It was provided therein that all disputes would be referred to the sole arbitration of Superintending Engineer of the area concerned. However, Chief Engineer-in-charge shall have the authority to change of arbitrator on an application by either of the parties. After the award of the contract, the petitioner was entrusted with the operation and maintenance of the treatment plant which was directly interlinked with the sludge produced in as much as the sewerage treated by the plant upon treatment was segregated into treated water and sludge. Unless sludge was removed by the respondent and transported to the pits intended for storage of sludge, the plant could not operate. The scope of the work did not include handling of sludge, removal of sludge, supply of chemicals for treating the sewerage and providing watch and ward for the entire plant. On 27.5.2010, commissioning of the project was done on trial basis for 180 days which lapsed on 27.11.2010 and proved successful. Satisfied with the design supplied, the respondent issued a certificate on 29.11.2010 stating that the plant had been performing satisfactorily as per designed criteria and NIT conditions. Considering the performance, the Bank guarantee amounting to Rs.1,74,90,000/- was also released. The period of maintenance and operation started w.e.f 28.11.2010 and was still under implementation. The price break up for operation and maintenance for 120 months worked out to Rs. 600 lacs approximately i.e. Rs. 5 lacs a month. Till September 2014, the respondent in discharge of its contractual obligation was continuously removing the sludge by floating separate tenders/contracts. It also entered into contracts for supply of chemicals. On 18.9.2014, the petitioner called upon the Executive Engineer to provide tractor, trolley and manpower for disposal of the sludge. However, the Executive Engineer took the view that removal of sludge and its treatment with chemicals was within the scope of the work of the petitioner. The petitioner wrote to Executive Engineer on 22.9.2014 submitting its point wise reply to the letter dated 18.9.2014. On 29.9.2014, the Executive Engineer called upon the petitioner to clarify certain points which was done by it. Despite the aforesaid clarification on 18.11.2014, the Executive Engineer wrote to the petitioner that handling of sludge was deemed to be included in the contract. The petitioner on 21.11.2014 repudiated the alleged assertion of the Executive Engineer. On 3.12.2014, the petitioner sent a notice to the respondent saying that non disposal of sludge and grit was likely to cause serious environmental issues which were solely on account of failure of the respondent. On 5.12.2014, the respondent instead of discharging its obligations under the contract adopted coercive