The main legal point established in the judgment is that the appointment of an arbitrator must be in accordance with the law, and if found to be invalid, the court has the jurisdiction to set it aside and direct the parties to approach the appropriate arbitration center.

ORDER

1. Present application is preferred by applicant under Section Section 11 (6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act') for appointment of arbitrator.

2. Reliefs prayed for are as under:-

'(i) Annulling appointment of arbitrator vide letter dated 24.12.2020 (Annexure A-4).

(ii) Appointing an impartial arbitrator to resolve claims of the applicant.

(iii). Any other relief which this Hon'ble Court finds appropriate in the matter.

(iv) Costs.'

3. Precisely stated facts of the case are that applicant is a company registered under Companies Act and filed this application through its Director. Applicant is a construction company having expertise in construction of high rise buildings and hereinafter would be referred to as Subcontractor. Respondent is also a company registered under Companies Act and represented through its Director Ms. Upasana Agrawal. Respondent is also engaged in construction work of high rise buildings and hereinafter would be referred to as Contractor.

4. applicant/Subcontractor through its Director Rajesh Kumar Kaushal entered into an agreement dated 2.3.2015 to construct residential township 'Emerald Greens' [Four Tower/Blocks (Basement + Stilt + 8 Floors) as per design and planning, at village Khureri near Badagaon Flyover, Gwalior.

5. As per agreement, respondent/contractor was liable for supply of all the material, whereas applicant/subcontractor had to provide labour, false work and petty material i.e. nail, binding wires etc. Copy of agreement is enclosed as Annexure A-1. Contractor had been awarded the contract of development and construction of residential township 'Emerald Greens' by the owner of the plot at aforesaid location and subsequent to it, contractor executed agreement with subcontractor assigning mainly labour part of the construction work to the subcontractor.

6. As pleaded, subcontractor executed the work to the best satisfaction of the contractor, its Engineers and also of the owner of the land and satisfaction can be recorded from the fact that contractor made payment to subcontractor of more than Rs. 5 Crores after due measurements and verification of quantity and quality by its Engineers. It appears that in respect of some further payment, when asked for by the subcontractor, dispute emerged. It appears that in response to demand of money by the subcontractor (applicant herein), the contractor sent a letter dated 6.11.2020 vide annexure A-3 to subcontractor, informing it about appointment of Shri Chetan Kanungo (Advocate) as Arbitrator.

7. Surprised by the gesture of contractor, a legal notice dated 12.11.2020 at the instance of subcontractor vide Annexure A-4 was sent in which demand of payment of due amount was reiterated.

8. Reacting to the said legal notice, contractor again issued a letter dated 24.12.2020 vide Annexure A-5 sent by one Neeraj Kumar Sharma as authorized representative of respondent/contractor in which it has been informed that Shri Chetan Kanungo has declined to act as Arbitrator and Shri Neeraj Kumar Sharma as authorized representative appointed Shri M.L.Swarnakar (Advocate) as Sole Arbitrator by exercising the powers under Clause 19 of the agreement dated 2.3.2015. Immediately thereafter, Arbitrator Shri M.L.Swarnakar sent letter dated 26.12.2020 (Annexure A-6) to applicant/subcontractor informing him about his own acceptance as Arbitrator and declaration as per the provision of Section 12 and the Sixth Schedule of the Act was made. Interestingly, after acceptance of appointment by nominated Arbitrator (Shri M.L.Swarnakar) by contractor, reply to legal notice has been sent by the contractor vide reply dated 28.12.2020 (Annexure A-7) in which demand of payment of money as claimed by the applicant/subcontractor was denied and advised to participate in arbitration proceedings before Arbitrator already appointed.

9. In the first meeting held on 21.02.2021 with nominated Sole Arbitrator, (Annexure A-8) subcontractor raised