The main legal point established in the judgment is the interpretation of the jurisdiction clause in the agreement and the determination of the court's jurisdiction to entertain the application under S. 34 of the Arbitration and Conciliation Act, 1986.

( 1 ) THIS is an appeal under S. 39 of the Arbitration and Conciliation act, 1986 (hereinafter referred to as the act) against the judgment and formal order dated 14-3-2002 passed by District Judge, lucknow rejecting the application under s. 34 of the Act. The appeal has been dismissed on the ground that the District judge, Lucknow has no jurisdiction to entertain the said application.

( 2 ) THE only question involved in the appeal is as to whether the Court of District judge, Lucknow was having jurisdiction to entertain the application under S, 34 of the act at Lucknow against the award pronounced by the Arbitrator in view of the following clause of the agreement :"33. "in the event of any question, dispute or difference arising out of the contract between the parties with regard to the interpretation of working or this agreement or the rights, liabilities or duties arising out of it or otherwise in connection within the contract, the matter shall be referred for the decision of sole arbitrator appointed by the legal Remembrancer to Government of Uttar pradesh. The provisions of the Indian Arbitration act as amended from time to time shall apply to such arbitration if work under the contract has not been completed. When dispute is referred to arbitration the work shall continue during the arbitration proceedings and the payment due to contractors within the provisions of the contract shall not be withheld on account of arbitration proceedings unless authorised or required by the arbitrator. The decision of such arbitrator shall be final and binding on the parties. Any Court proceedings as may arise out of the dealing could be in Court having. jurisdiction over the District concern sub-ordinate in the High Court of Judicature at allahabad. "

( 3 ) THE U. P. Co-operative Sugar Factories federation Ltd. , 9-A, Rana Pratap Marg, lucknow, as apex body, invited tender for construction of new Sugar Factories at rupapur (Hardoi), Behreri Brahman (Moradabad) and Dhuriapur (Gorakhpur ). In dhuriapur, factory was to be raised for dhuriapur Kisan Sahkari Chini Mills Ltd. , appellants 2 and 3. The notice inviting tenders were issued by appellant No. 1, U. P. Co-operative Sugar Factories Federation ltd. Lucknow mentioning therein that sealed tenders would be received by 3. 00 p. m. on 15-12-1989 by the Federation at lucknow for the construction of the above mentioned factories. Respondent No. 1-m/s P. S. Misra, Sumer Sugar, Gorakhpur also submitted its tender at Lucknow. The tenders were opened at Lucknow and they were also accepted at Lucknow. Thereafter the Project Manager at Dhuriapur Kisan sahkarichini Mills Ltd. on 3-3-1990 sent a letter to respondent No. 1 intimating them that their tender submitted in the office of the U. P. Co-operative Sugar Factories Federation ltd. , Lucknow has been accepted and called upon them to attend the Chini mills office at Gorakhpur to execute the agreement with the Mill Society. Prior to this, on 13-2-1990, the Chief Project Engineer, u. P. Co-operative Sugar Factories Federation ltd. Lucknow wrote a letter to the General manager, Dhuriapur Kisan Sahkari chini Mills Ltd. at Dhuriapur, Gorakhpur requiring him to issue a letter of intent to the concerned party and enter into an agreement in order to start the work Immediately. Pursuant to all this, an agreement was executed between appellant No. 2 through its project Manager and M/s. P. S. Misra, Sumer sugar respondent No. 1 on 5-4-1990. This agreement consisted of : (A) agreement (b) tender document and (c) letter of intent

( 4 ) THIS very fact finds mention in para 3 of the agreement. Respondent No. 1 "carried the work under the contract at Gorakhpur. However, a dispute relating to and arising out of the contract had arisen between the parties. On dispute having arisen, respondent No. 1 moved an application under S. 11 of the 1996 Act before Honble the Chief justice or his nominee for appointment of arbitrator. This application was moved