ARIJIT PASAYAT, J. - (1.) LEAVE granted.
(2.) CHALLENGE in these appeals is to the order passed by the learned Single Judge of the Kerala High Court disposing of arbitration request filed before him. Background facts in a nutshell are as follows:- Appellant and the respondent entered into a contract vide purchase order no.3020/02-2701/016/1018 dated 7.1.1995. Alleging that in breach of the terms and conditions of the purchase order certain amounts were withheld, the appellant invoked the arbitration agreement purportedly in terms of new Article 26 of the Special Conditions and suggested three names for appointment of an independent sole arbitrator and called upon the respondent to name one out of the three names. The respondent took the stand that it is only the Managing Director of the respondent who can be appointed as a named arbitrator as per Article 26 of the Standard Conditions and refused to appoint a sole independent arbitrator. The High Court of Kerala was moved seeking appointment of an arbitrator by Arbitration Request 29/99. Learned Single Judge declined the arbitration request on the ground that terms and conditions of the purchase order provides for arbitration by the Chairman and Managing Director of the respondent. A writ petition was filed under Article 226 of the Constitution of India, 1950 (in short the 'Constitution'). During pendency of the said writ petition this Court in CA Nos. 3777, 4168 and 4169 of 2003 held that the order passed under Section 11 of the Arbitration and Conciliation Act, 1996 (in short the 'Act') is a judicial order and writ petition challenging the said order under Article 226 of the Constitution is not maintainable. Therefore, this appeal has been filed. In support of the appeals, learned counsel for the appellant submitted that the provision contained in Article 26 of the Standard Conditions is not the actual provision for arbitration. The same is contained in the special terms and conditions attached to the purchase order and the work order respectively. The purchase order and the work order contained special conditions, standard terms and conditions. By Article 16 of the Special terms and Conditions of the purchase, there is amendment to the article 25 of the standard conditions. There is similar amendment to article 26 of the standard terms so far as it related to commissioning. The provisions contained in the standard conditions in both the cases, it was submitted by learned counsel for the appellant, is not actual provision for arbitration. The general condition stated that all disputes and differences are required to be referred to the Chairman and Managing Director of the respondent-company for his decision and it will be binding on the parties. It was further contended that the provisions contained in the special conditions by themselves do not have any provision for arbitration. It does not have any clause that disputes and difference shall be settled by arbitration. In both the cases, the special conditions specifically state that it is by way of amendment of general condition only and not in supersession of that provision. The Chairman and the Managing Director of the respondent- company cannot be treated as independent person to be appointed as arbitrator. This was essentially the stand which did not find acceptance. It is submitted by learned counsel for the appellant that certain changes were suggested by the respondent.
(3.) LEARNED counsel for the respondent on the other hand submitted that the High Court view is unexceptionable. At this juncture it would be necessary to take note of the few conditions : Clause 16 of the Work Order reads as follows:- "16. Work Order Conditions: The order shall be governed by the above conditions as well as by the conditions stipulated in Attachment I, II and III of this Work Order, except the following: The order shall be governed by the present special conditions of work (W.O. Attachment III) as well as by the conditions stipulated in Attachment I, and II of this Work Order, except the following: Spec. No.3020/CS/04: Standard Terms and Conditions of Erection and Commissioning. Art. 4.0.0 Taxes, Duties and Levies (comment) Taxes shall be as per Article 4.0.0. However, at present conditions; tax on this Work Order is not applicable. Art. 13.0.0 Termination (comment) FACT can terminate the Work Order without giving any reason provided that reasonable cost for termination and actual out-of-pocket expenses will be reimbursed. Art. 15.0.0 Changes (Amendment) FACT shall issue amendment orders which provide for changes in the scope of work required by FACT under the Work Order, and for equitable adjustment in the price and delivery/completion time, if any, hereunder. Art. 21.0.0 Tests on Completion and Taking Over (New Article Added). Art. 21.5.0 (New Article) The Primary Reformer Package under the scope of this Work Order shall be deemed to be taken over by FACT immediately after satisfactory pre- commissioning is over within 10 days of Contractor's notice to Owner for commencement of commissioning after pre-commissioning, whichever is earlier. In case taking over is delayed due to no fault of Contractor, after the notice given by Contractor in this regard about the Completion, the entire Primary Reformer Package is deemed to be taken over by FACT. Art. 24.0.0 Indemnification Secondary liability such as indemnification for loss caused by stoppage of plant of like will be excluded from Contractor's liabilities under the Work Order. Art. 26.0.0 Applicable Law and Settlement of Disputes (amendment) The provisions of the Indian Arbitration Act, 1940 and the rules there under, any statutory, modifications there for the time being in force will be applied. The venue for the arbitration shall be Cochin, and the language of the proceedings shall be the English language. During the arbitration proceedings, both parties shall continue to discharge their obligations under the Work Order." ;