- (1.) Re: FAT No.002 of 2015, CAN No.091 of 2015(Limitation) CAN No.092 of 2015(Stay) Before taking up the appeal for hearing, we condoned the delay being satisfied with the grounds made in the applications under section 5 of the Limitation Act. Both the appeals raise a common question of law as regards the maintainability of an appeal against an order passed, under section 11 of the Arbitration and Conciliation Act, 1996 appointing an arbitrator, by the learned Judge designated by the Hon'ble Chief Justice.
(2.) The parties in FAT No.002 of 2015 entered into a contract containing an arbitration clause contained in paragraph 25 of the contract which reads as follows:- "Clause 25: Except where otherwise provided in the contract, all questions and disputes relating to the meaning of the specifications, design drawings and instructions here-in before mentioned and as to the quality of workmanship or materials used on the work or as to any other question, claim, right, matter or thing whatsoever in any way arising out of or relating to the contract, designs, drawings, specifications, estimates, instructions, orders or these conditions or otherwise concerning the works or the execution or failure to execute the same whether arising during the progress of the work or after the cancellation, termination, completion or abandonment thereof shall be dealt with as mentioned hereinafter: (i). If the contractor considers any work demanded of him to be outside requirements of the contract, or disputes any drawings, record or decisions given in writing by the Engineer-in-Charge on any matter in connection with or arising out of the contract or carrying out of the work, to be unacceptable, he shall promptly within 15 days request the superintending Engineer in writing for written instruction or decision. Thereupon, the superintending engineer shall give his written instructions or decision within a period of one month from the receipt of the contractor's letter. If the Superintending Engineer fails to give his instructions or decision in writing within the aforesaid period or if the contractor is dissatisfied with the instructions or decision of the Superintending Engineer, the contractor may, within 15 days of the receipt of Superintending Engineer's decision, appeal to the Chief Engineer who shall afford an opportunity to the contactor to be heard. If the latter so desires, and to offer evidence in support of his appeal. The Chief Engineer shall give his decision within 30 days of receipt of contractor's appeal. If the contractor is dissatisfied with this decision, the contractor within a period of 30 days from receipt of the decision, give notice to the Chief Engineer for appointment of arbitrator failing which the said decision shall be final binding and conclusive and not referable to adjudication by the arbitrator. (ii). Except where the decision has become final, binding and conclusive in terms of sub para (i) above, disputes or differences shall be referred for adjudication through arbitration by a sole arbitrator appointed by the Chief Engineer, CPWD in charge of the work or if there be no Chief Engineer, the Additional Director General of the concerned region of CPWD or if there be no Additional Director General, the Director General of Works, CPWD. If the arbitrator so appointed is unable or unwilling to act or resigns his appointment or vacates his office due to any reason whatsoever, another sole arbitrator shall be appointed in the matter aforesaid. Such person shall be entitled to proceed with the reference from the stage at which it was left by his predecessor. It is a term of this contract that the party invoking arbitration shall give a list of disputes with amounts claimed in respect of each such dispute alongwith the notice for appointment of arbitrator and giving reference to the rejection by the Chief Engineer of the appeal. It is also term of this contract that no person other than a person appointed by such Chief Engineer, CPWD or the administrative head of the CPWD, as aforesaid, should act as arbitrator and if for any reason that is not possible, the matter shall not be referred to arbitration at all."
(3.) Mr.Sivabalan, learned Advocate appearing for the appellants drew our attention to the impugned order wherein the learned designated Judge opined, inter alia, as follows:- "There is no dispute that the petitioner has invoked the arbitration clause. It appears that arbitration clause was invoked after receiving the payment under the final bill. The question remains whether this would amount to accord and satisfaction. In my view it is not since the said amount was not received in full and final settlement of the claim of the petitioner as would appear from the endorsement in the final bill "subject to claim". There is no material on record to show that the petitioner has accepted the said amount in full and final settlement of its claim. In fact such case is also not made out in the affidavit in opposition. The only ground for refusing to appoint an arbitrator is that request was made beyond 120 days of receiving intimation from the Government that bill is ready for payments . Such clause apart from being violative of section 28 of the Contract Act is also not to be followed in view of clause 25.18 of the Manual which is binding on the authorities. Accordingly, in view of section 11(6) of the Arbitration and Conciliation Act, 1996 and having regard to the fact that the period of 30 days has expired, the Chief Engineer forfeit his right to appoint an Arbitrator, Shri P.Radhakrishnan, Retired Chief Engineer and Administrator, ALHW, is appointed as an Arbitrator. The Arbitrator is requested to conclude the proceeding at the earliest preferably within a period of one year from the date of entering into the reference.";