GANNON DUNKERLEY AND CO Vs. UNION CARBIDE INDIA LTD

JUDGEMENT

(1.) THIS is an application under Section 20 of the Indian Arbitration Act for an order that the arbitration agreement be filed in Court and reference made. The arbitration agreement is a clause in a building contract subsisting between the parties. The defendant employed the plaintiff to do the construction work of a factory building to be used and occupied by Eveready Flashlight Company. The building contract provided for the certification of workmanship by a firm of architects to wit Messrs. Ballardie Thompson and Matthews. The contact further provided that the works shall be carried out to the reasonable satisfaction of the Architect whose decision as to sufficiency and quality of the work and material shall Be final and binding upon all parties. The plaintiff is the contractor and the building work is alleged to have been completed sometime in 1957. During the progress of the work eight running bills were submitted and paid in terms of the contract. The payment of the ninth bill, however, was withheld on the ground that the roof of the factory building constructed was leaking at several places. It appeare that the contractor at first attempted to effect repair. The repairs effected however, was not found to be satisfactory. The Architect was of opinion that the workmanship was bad which was disputed by the contractor. The dispute between the parties as appearing in the correspondence will appear from the letter addressed by the plaintiff to the Chief Engineer, Central Public Works Department of May 23, 1980 which is set out hereunder :

(2.) CLAUSE 30 of the contract contains the arbitration agreement which reads as follows :

(3.) THE arbitration clause covers disputes as to construction of the contract or as to matters and things arising thereunder. But the exception clause takes out of the arbitration clause dispute as to matters left to the sole discretion of the architect under different clauses of the contract. "When a dispute has arisen which is covered by the arbitration clause, "then either party shall forthwith give notice to the other party in writing of such dispute," and "such dispute and no other dispute shall be referred to arbitration." "THE Chief Engineer, Central Public Works Department if able and willing to act, otherwise any person nominated by the Chief Engineer is to act as arbitrator and "the award of such arbitrator shall be final and binding on the parities."