IMPORTANT POINT
In order to constitute an arbitration agreement the intention of parties should be clear and specific to get the dispute resolved by way of arbitration.

D.Y. Chandrachud, J.—The Petition has been filed under Section 11(6) of the Arbitration and Conciliation Act, 1996, for the appointment of an Arbitrator.

2. By a letter dated 10 December 2007, the Respondent accepted the offer of the Petitioner for the allotment of a plot at Kharghar, Navi Mumbai, for the construction of a Five Star Hotel. The balance amount payable, apart from the earnest money of Rs. 2.5 crores, was Rs.78.28 crores.

3. The Respondent by its letter dated 3 February 2009 sought the payment of the balance lease premium failing which it was stated that the agreement would be liable to be terminated by forfeiting the earnest money deposit and twenty five percent of the agreed lease premium. The Petitioner by a letter dated 12 March 2009 recorded that it had paid a sum of Rs.39.14 crores towards the first instalment of the bid consideration. However, according to the Petitioner, it had agreed to take up the project on a representation by the Respondent that certain “milestones” would be achieved by the Respondent including the construction of an International Airport at Navi Mumbai; a Fly Over adjacent to the plot; the setting up of a Special Economic Zone at Navi Mumbai; the completion of certain road projects and the setting up of a Central Park and golf course. The Petitioner stated that it was ready and willing to make payment of the second instalment amounting to Rs.39.14 crores only if the Respondent completed some or all the milestones, referred to earlier and subject to the grant of additional F.S.I. The Petitioner also sought permission to carry out a mixed development project. In terms of Clause 44 of the Letter of Allotment, which according to the Petitioner, contemplates appointment of the Managing Director of the Respondent as Arbitrator, the Petitioner nominated Mr.G.S. Gill, Managing Director of the Respondent as Arbitrator. This was followed by a letter dated 12 March 2009.

4. In the Petition under Section 11(6) and in the affidavit in rejoinder, the Petitioner has relied upon clause 44 of the Letter of Allotment and clause 41 of the bid document as containing an agreement to refer disputes to arbitration. Clause 41 of the bid document provides as follows :

“41. Interpretation of general terms & conditions for disposal of plots of land.

In case of dispute as regards interpretation of the General terms and conditions of disposal of plots of land and of the invitation of offer or any thing therefrom, the final decision rests with Managing Director of CIDCO and will be binding on all parties as the award of Arbitrator.”

Clause 44 of the Letter of Allotment is in the following terms:

“44. Interpretation of general terms and conditions for disposal of plots of land In case of dispute as regards interpretation of the General terms and conditions of disposal of plots of land and of the invitation of offer or any thing therefrom, the final decision rests with Managing Director of CIDCO and will be binding on all parties as the award of Arbitrator.”

5. The case of the Petitioner is that an arbitration agreement can be spelt out from these two clauses. Reliance is sought to be placed on the judgment of a Learned Single Judge of the Delhi High Court in Bhagwan Devi v. Chairman, Delhi Agricultural Marketing Board, (2006) 131 Delhi Law Times 411. On the other hand, it has been urged on behalf of the Respondent that in a judgment of a Learned Single Judge of this Court in Mrs.Mini Radhakrishnan v. CIDCO, Arbitration Application No.1 of 2001 decided on 3.8.2001 a similar clause was construed. It was urged that the Learned Single Judge while relying upon the judgment of the Supreme Court in Bharat Bhushan Bansal v. U.P. Small Industries Corporation Ltd., AIR 1999 S.C. 899 held that such a clause would not constitute an agreement to refer disputes to arbitration.

6. Clause 44 of the Letter of Allotment provides that disputes as regards the interpretation of the general terms and conditions of th