M/s. Shapers Construction Ltd. vs Executive Engineer Gas Rahat No. 1

Rajendra Menon, Judge

This application has been filed u/s 11 of the Arbitration and Conciliation Act, 1996 seeking constitution of an Arbitration Tribunal for resolving dispute between the parties.

It is common ground that an agreement in question Annexure A-1 was executed between the parties and work order was also issued. The agreement in question contemplates an arbitration clause and it is indicated in this clause that if the procedure contemplated fails then the matter shall be resolved in accordance to Arbitration Act, 1940.

Even though in the application it is stated by the applicant that the matter has to be resolved after settlement of the final bill by reference to the M.P. State Administrative Tribunal and the non-applicant in the reply contend that the matter may be referred to the Madhyastam Adhikaran Adhiniyam, 1983, but during the course of hearing of this application it is pointed out by Shri Shekar Sharma, learned counsel for the applicant that in view of principle laid down by the Supreme Court in the case of V.A. Tech Escher Wyass Flovel Ltd. vs. M.P.S.E. Board and another 2010 Arb. W.L.J. 116 the M.P. State Arbitration Tribunal will not have jurisdiction in the matter and as parties have agreed to resolve the dispute under Arbitration Act, 1940, the application u/s 11 has to be decided by this Court and an independent Arbitrator has to be constituted. The question as to whether independent Arbitrator has to be constituted or matter should be referred to M.P. Arbitration Tribunal has been considered by the Supreme Court in the following three cases V.A. Tech Escher Wyass Flovel Ltd. vs. M.P.S.E. Board and another 2010 Arb. W.L.J. 116, Ravikant Bansal vs. M.P. Road Development Corporation SLP Civil No.18867/2011 decided on 29.7.2011 and M/s. A.P.S. Kushwaha Vs. Municipal Corporation, Gwalior, and finally principle laid down by the Supreme Court is that if the parties by agreement accept that the matter should be resolved by reference to M.P. Arbitration Tribunal constituted under the Madhyastam Adhikaran Adhiniyam Act, 1983 the matter should be referred to the said tribunal else the principle laid down in the case of V.A. Escjer Wyass (supra) has to be applied and the independent Arbitrator appointed. In the present case, if the arbitration agreement between the parties is taken note of it is clear that parties have not agreed to refer the dispute to the M.P. Arbitration Tribunal constituted under the M.P. Madhyastam Adhikaran Adhiniyam, 1983. On the contrary the arbitration clause contemplates that the dispute shall be resolved by resorting to the procedure contemplated under the Arbitration Act, 1940.

In that view of the matter and keeping in view the principle laid down in the case of V.A. Tech Escher Wyass (supra) the matter has to be referred to an independent Arbitrator.

Accordingly, this application is allowed. Smt. Renu Sharma, a Retired District and Sessions Judge, stationed at Bhopal is appointed as Arbitrator to resolve the dispute between the parties.

Registry is directed to forward a copy of this order to the Hon''ble Arbitrator and the Hon''ble Arbitrator is requested to proceed in the matter.

With the aforesaid, the application is allowed and disposed of.

Certified copy as per rules.