- (1.) This is an application for appointment of an arbitrator under Section 11(6) of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as the 'Act') primarily on the ground that although there is a Clause for arbitration in the agreement for appointment of an arbitration in the case of existence of a dispute under Clause 11.23 of the agreement, yet this Court should exercise its jurisdiction under Section 11(6) of the Act by appointing an arbitrator as Clause 11.23 of the agreement has not been followed by the Respondents in terms of the agreement.
(2.) A dispute admittedly has arisen between the Petitioner-applicant (M/s. Standard Mercantile Company) and the Respondent- Steel Authority of India Ltd. (in short 'SAIL'), as according to the Respondent-SAIL, it had placed purchase order for 24000 Metric Tonne of High Silica Sand at the rate of Rs. 301.16 per Metric Tonne and the applicant although made the supply for some time, it failed to complete the supply in terms of the purchase order Consequently, the Respondent-SAIL suffered a loss 'and Respondents : had to make purchase from another supplier. Since the Respondents suffered loss and de-lay in production on account of non supply, a dispute arose which was not addressed by the applicant the Managing Director of the Respondent-Company appointed an arbitrator in terms of Clause 11.23 which clearly declared that in case any claims, disputes or differences of any kind arose between the parties on any ground whatsoever, the same shall be referred by the parties thereto for the decision by a Sole arbitrator to be appointed as per the provisions enumerated therein Clause 11.23 envisages that the notice regarding the invoking of the Arbitration 0ause was to be served by the parties there to by registered post at their address given in the contract and the matter in question, dispute, claim of differences other than the expected matter in respect of contract was to be submitted to the arbitrator for adjudication and decision to a sole arbitrator to be appointed by the Managing Director, Bokaro Steel Plant, Steel Authority of India Ltd. The agreement further envisaged that the sole arbitrator appointed shall from the time of his appointment and throughout the arbitration proceedings, would decide the dispute without any delay. This was the provision in sum and substance incorporated in the agreement in Clause-11.23.
(3.) The Respondent-SAIL in view of Clause 11.23 of the agreement, appointed an arbitrator and the AGM (Law) of SAIL sent a letter by registered post to the sole arbitrator, namely, Shri Shitanshu Prasad, DGM (Education) at Bokaro Steel Plant, Bokaro Steel City, indicating that the same was an invocation of arbitration clause, in view of the purchase orders dated 15-9-2003 and 16-9-2004. The applicant submitted to the jurisdiction of the arbitrator and the arbitrator initiated proceeding. During pendency of the same, the applicant-Supplier filed this application for appointment of an arbitrator under Clause 11(6) of the Arbitration & Conciliation Act, 1996, which is the instant application for appointment of an arbitrator.;