STATE OF MYSORE Vs. R J SHAH AND CO LTD

JUDGEMENT

(1.) THIS Revision petition, arising out of proceedings under the Arbitration Act, 1940, hereinafter called the Act, raises the question of the scope of the Umpire's authority when he enters on the reference in lieu of the Arbitrators.

(2.) THE material facts may be shortly stated: By a contract in writhing dated October 12, 1959, and made between the petitioner (hereinafter referred to as 'the State') of the one part, and respondent-1 (herein after referred to as 'the contractor') of the other part, the contractor agreed to construct what is called 'Malali Tunnel' and approaches thereto (part of Sharavati Valley-Hydro Electric Project) in accordance with the specifications, plans and terms and conditions specified in the annexures to the said agreement. THE contract contained the following material provisions:-

(3.) THE arbitrators heard the parties on Point No. 2 as a preliminary issue; the arbitrator appointed by the State held that the dispute was not arbitrable and the arbitrator appointed by the contractor held that it was arbitrable. THE arbitrators, having thus disagreed, referred the question of arbitrability of the dispute to the Umpire requesting him to give a decision, and if the decision is in favour of further proceedings, to refer the matter back to the arbitrators.