The main legal point established in the judgment is that due to the amendment in the Arbitration and Conciliation Act, 1996, it is no longer permissible for a party or its official to act as an Arbitrator or nominate an Arbitrator.

JUDGMENT

Anil Kshetarpal, J. - An application under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act of 1996 ) has been filed for the appointment of an independent and impartial Arbitrator. The detailed facts of the case are not required to be noticed. The existence of an agreement containing an arbitration clause is not in dispute between the parties. The clause reads as under:-

"44 ARBITRATION:

All disputes or differences of any kind whatsoever which shall at any time arise between the parties hereto touching or concerning the work or the execution or maintenance thereof this contract or the rights touching or concerning the work or the execution or maintenance thereof of this contract or the construction operation or effect thereof or to the right or liabilities of the parties or arising out of relation thereto whether during or after determination, foreclosure or breach of the contract (other than those in respect of which the decision of any 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 and to the Appointing Authority who shall be appointed for this by the Employer be referred for adjudication to a sole Arbitrator to be appointed as hereinafter provided.

If the dispute or difference pertain to the under noted matter (called excepted matters) the decision in writing of the Architect, conclusive and binding on the parties.

i. Instructions

ii. Transactions

iii. Proof of quality of materials

iv. Assigning or under letting of the contract

v. Certificate as to the causes of delay on the part of contractor and justifying extension of time

vi. Rectifying of defects pointed out during the Defect liability period

vii. Notice to the contractor to the effect that he is note proceeding with due diligence

viii. Certificate that the contractor has abandoned the contract

ix. Notice of determination of the contract by the Employer. For the purpose of appointing the Sole Arbitrator referred to above, the Employer will send within thirty days of the receipt of the notice to the Contractor a panel of three names of persons who shall all be presently connected with the organization for which the work is executed.

The Contractor shall on receipt of the names as aforesaid, select any one of the persons named to be appointed as a Sole Arbitrator and communicate his name to the Appointing Authority within seven days of receipt of names. The Appointing Authority shall there upon without any delay appoint the said person as the Sole Arbitrator. If the Contractor fails to communicate such selection as provided above within the period specified the Appointing Authority shall make the selection and appoint the selected person as the Sole Arbitrator. If the Appointing Authority fails to send to the Contractor the panel of three names as aforesaid within the period specified the Contractor shall send to the Appointing Authority a panel of three names of persons who shall all be unconnected with either party. The Appointing Authority shall on receipt of the names as aforesaid select any one of the persons named and appoint him as the Sole Arbitrator. If the Appointing Authority fails to select the person and appoint him as the Sole Arbitrator within 30 days of receipt of the panel and inform the Contractor accordingly, the Contractor shall be entitled to appoint one of the persons from the panel as the Sole Arbitrator and communicate his name to the Appointing Authority. If the Arbitrator, so appointed, is unable or unwilling to act or resign his appointment or vacate his office due to any reason whatsoever another Sole Arbitrator shall be appointed as aforesaid.

The WORK under the contract shall however continue during the Arbitration proceedings. And no payment due or payable to the contractor shall be withheld on account of such proceeding.

The Arbitrator shall be deemed to have entered on the reference on the date he issues