IN THE HIGH COURT OF PUNJAB & HARYANA

AT CHANDIGARH

109+203

ARB-225-2021 (O&M)

Date of Decision:19.12.2025

M/s Jai Bala Ji Construction Company

......Petitioner

Versus

Union of India and another

......Respondents

CORAM: HON'BLE MR. JUSTICE JASGURPREET SINGH PURI

Present:- Mr. Dheeraj Mahajan, Advocate and

Mr. J.S. Saini, Advocate for the petitioner.

Mr. Arvind Seth, Senior Panel Counsel for respondents.

*****

JASGURPREET SINGH PURI J.(Oral)

CM-24598-CII-2025

1. On the last date of hearing, notice in the application was issued and Mr. Arvind Seth, Advocate, had appeared and sought time to

file a reply.

2. Today, learned counsel for the respondents has stated that he

has no objection in case the present application is allowed.

3. In view of the above, the present application is allowed,

subject to all just exceptions.

4. The accompanying documents are taken on record as

Annexures P-6 to P-8.

Main case

5. The present is a petition filed under Section 11 (6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘the Act’),

seeking appointment of an independent Arbitral Tribunal to adjudicate upon the disputes which have arisen between the parties.

6. Learned counsel for the petitioner submitted that the petitioner entered into a contract with the respondent-Railways vide Annexure P-1. He further submitted that Annexure P-2 contains a valid arbitration clause, namely Clause 64. As per Clause 64(1)(i), it is provided that in the event of any dispute arising between the parties, the same shall be referred to arbitration, except in respect of the “excepted matters”, which would not be referred for arbitration. The aforesaid clause is reproduced as under:

“ 64(1) (i) In the event of any dispute or difference between the parties hereto as to the construction or operation of this contract, or the respective rights and liabilities of the parties on any matter in question, dispute or difference on any account or as to the withholding by the Railway of any certificate to which the contractor may claim to be entitled to, or if the Railway fails to make a decision within 120 days, then and in any such case, but except in any of the “excepted matters” referred to in Clause 63 of these conditions, the contractor, after 120 days but within 180 days of his presenting his final claim on disputed matters shall demand in writing the dispute or difference be referred to arbitration.”

7. Learned counsel for the petitioner further submitted that after allotment of the work, the work could not proceed because of non-supply of material by the respondents and the petitioner issued a notice to the respondents on 14.06.2017 vide Annexure P-3 for appointment of an arbitrator. In pursuance of the aforesaid notice, the respondents appointed an arbitrator on 10.09.2018 unilaterally, who was an official and such appointment could not have been made as the same was in violation of the provisions of Section 12(5) of the Act and the law laid down by the Hon’ble Supreme Court in Perkins Eastman Architects DPC and anr. v. HSCC (India) Limited, 2020 (20) SCC 760 which holds that a party having an interest in the outcome of the dispute cannot unilaterally appoint an arbitrator, as it gives rise to justifiable doubts regarding independence and impartiality.

8. He submitted that with efflux of time, the mandate of the arbitrator stood terminated and the arbitral proceedings could not continue and therefore the present petition has been filed for appointment of an independent Sole Arbitrator. He also submitted that an objection has been raised by the respondents with regard to the fact that the claim of the petitioner was non-arbitrable because the same falls within the category of “excepted matters” as provided under Clause 63 of the Indian Railway Standard General Conditions of Contract Act, which has been reproduced in the reply filed by the respondents. While referring to the aforesaid Clause No.63, he submitted that there is no doubt that some of the matters were falling in t