- (1.) CORE ISSUE Short point involved in this appeal would be, whether appointment of a former Judge, by Court under Section 11(6) of the Arbitration and Conciliation Act 1996, to act as arbitrator, would be held to be invalid when the agreement would refer to appointment of Railway Gazetted Officers to act as arbitrator.
(2.) BACKDROP Railway invited a tender for construction that the respondent procured being successful in the tender process. The parties signed and executed the formal agreement on May 28, 2004 and thereby made themselves bound by the General Conditions of Contract 2001. It was not clear as to what was the relevant clause prevalent as on the date of signing of the agreement. We observe so as we find, in 2001 two different clauses were governing the field. The relevant clauses are quoted below: "Clause 63(a)(iii) it is a term of this Contract that no person other than a Gazetted Rly Officer should act as an Arbitrator/Umpire and if for any reason, that is not possible, the matter is not to be referred to Arbitration at all."
(3.) The Railway would bank upon the aforesaid clause to set aside the award published by the former Judge of this Court whereas the claimant would strenuously contend, the clause quoted above was not prevalent as on the date of execution of the contract. They would refer to other clauses of the General Conditions of Contract, particularly clause 64 that would operate in the field of arbitration. Clause 64(1)(I) and 64(3)(a)(ii) and (iii) being relevant herein are quoted below: "64.(1)(I) Demand for Arbitration In the event of any dispute or difference between the parties here to 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 'except matters' referred to in clause 63 of these conditions, the contractor, after 120 days but within 180 days of his persenting his final claim on disputed matters, shall demand in writing that the dispute or difference be referred to arbitration." "64.(3)(a)(ii) In cases not covered by clauses 64(3)(a)(i), the Arbitral tribunal shall consist of a panel of three Gazetted Rly officers not below JA grade, as the arbitrators. For this purpose, the Railway will send a panel of more than 3 names of Gazetted Rly. Officers of one or more departments, of the rly to the contractor who will be asked to suggest to General Manager upto 2 names out of the panel for appointment as contractor's nominee. The General Manager shall appoint at least one out of them as the contractor's nominee and will, also simultaneously appoint the balance number of arbitrators either from the panel or from outside the panel, duly indicating the presiding arbitrator from amongst the 3 arbitrators so appointed. While nominating the arbitrators it will be necessary to ensure that one of them is from the Accounts department. An officer of selection Grade of the Accounts department shall be considered of equal status to the officers in SA grade of other departments of the Railways for the purpose of appointment of arbitrators." "64 (3) (a) (iii) If one or more of the arbitrators appointed as above refuses to act as arbitrator, withdraws from his office as arbitrator, or vacates his/their officer/offices or is/are unable or unwilling to perform his functions as arbitrator for any reason whatsoever or dies or in the opinion of the General Manager fails to act without undue delay, the General Manager shall appoint new arbitrator/arbitrators to act in his/their place in the same manner in which the earlier arbitrator/arbitrators had been appointed. Such re-constituted Tribunal may, at its discretion, proceed with the reference from the stage at which it was left by the previous arbitrator(s).";