THE HON’BLE THE CHIEF JUSTICE SRI APARESH KUMAR SINGH ARBITRATION APPLICATION No.76 of 2025

ORDER:

Mr. R.S.Phani, learned counsel representing Mr. N.Jeevan Kuamr, learned counsel for the applicant.

2. By order dated 01.08.2025, this Court proposed to appoint Smt. Justice T.Meena Kumari, a former Chief Justice of Meghalaya High Court as an independent Arbitrator to adjudicate the dispute between the parties. The order dated

01.08.2025 is extracted hereunder for easy reference:

“Mr. R.S.Phani, learned counsel representing Mr. N.Jeevan Kumar, learned counsel for the applicant.

Heard learned counsel for the applicant.

Respondent Nos.2 and 3, who are the partners of respondent No.1 partnership firm have not appeared despite valid service of notice.

Learned counsel for the applicant submits that the legal notice dated 28.01.2025, Annexure P9, for invocation of arbitration Clause 21 under the Purchase Order dated 23.02.2023 for appointment of sole Arbitrator for adjudication of the dispute between the parties has remained unreplied. Applicant had made an advance payment of Rs.4,61,04,075/- on 27.02.2023 to the respondents through online mode against Purchase Order dated 23.02.2023 for supply of 635 MT TMT Bars for the “Surat Metro Project” undertaken by the applicant. Despite full advance payment, the respondents have failed to supply the entire agreed quantity of 653 MT TMT Bars, instead they have delivered only about half the quantity and have neither supplied the remaining materials nor refunded the amount equivalent to the shortfall. The respondents made several attempts to amicably resolve the dispute and a meeting was also held on 13.04.2023 wherein the respondents undertook to supply the material in a periodical manner. The applicant has also lodged a complaint before Althan Police, Surat on 11.04.2023, but no action has been taken. Later, the respondents further gave an undertaking on 14.06.2023 for resumption of the supply of materials from 10.07.2023. However, only 37 Metric Tonnes of supplies were made on 17.07.2023. The respondents were further requested through e-mail dated 27.11.2023 to resume supplies within 10 days, but no supplies were made. Thereafter, the applicant has invoked the arbitration clause 21 provided under the Purchase Order dated 23.02.2023, which reads as under:

“21. Arbitration:

In the event of any dispute/differences arising out of this purchase order or difference of opinion between the parties on any point in the purchase order arising out of or in connection with the purchase order or with regard to performance of any obligation hereunder by either party, the parties hereto shall use their best efforts to settle such disputes or difference of opinion amicably by mutual negotiations. In case, no agreement is reached within 30 days from the date of such dispute/difference, either party may forthwith give to the other, a notice in writing of the existence of such question, dispute or difference of opinion and their intention of invoking the arbitration under the provisions of Arbitration & Conciliation Act, 1996 along with any amendments or re-enactments thereof. The rules there under or any statutory modification thereof for the time being in force shall prevail. The arbitrator shall be appointed by the CEO of IECCL and the other party shall have no objection regarding the nomination of such arbitrator being an employee of IECCL or IL&FS Group. The place of arbitration shall be at Hyderabad and the language used shall be English. The award pronounced by the Arbitral Tribunal shall be final and binding on the parties.”

It is submitted that on failure of the respondents to respond to the notice for arbitration, the applicant has approached this Court for appointment of an independent Arbitrator under Section 11(5) of the Arbitration and Conciliation Act, 1996 read with Section 3(i)(d)

of Scheme for appointment of Arbitrator as framed by this Court. Learned counsel for the applicant submits that since the respo