Serna, J. -- 1. Leave granted.

2. This appeal preferred by the Union of India is directed against the judgment and order dated 26.5.2006 of the High Court of Delhi in Arbitration Petition No. 213 of 2006. By the aforesaid order the High Court appointed an arbitrator on a petition filed by the respondent under section 11 (6) of the Arbitration and Conciliation Act, 1996 (in short 'the Act').

3. To answer the question involved in this appeal, it may not be necessary to delve the entire facts leading to the filing of the present appeal. Suffice if to say that in response to an invitation to tender inquiry No. A.M - 5/RC-14100105/072003/WT/BTYS/Defence/2003-04/7 5 for supply of battery secondary lead acid, an offer dated 7.10.2002 was submitted which was revised by letter dated 8.4.2003. On the basis of the revised offer dated 8.4.2003 a rate contract No.AM-5/RC-14100105/072003/WT/ BTYS/DEF/2003-04/75/BHARAT/COAC/185 dated 5.5.2003 for the period 5.5.2003 to 16.3.2004 was executed between the appellant and the respondent.

4. Clause 12 of rate contract entered into between the parties contained a price variation clause. As the variation factor of the batteries, on account of fluctu