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2013 (11) TMI 632 - SC - Companies LawAppointment of arbitrator - Appellant was awarded contract for construction of bridge - Appellant did not complete the work by alleging lack of cooperation on the part of Chief Engineer, Communication and Building - Appellant lodged claim for payment of the amount allegedly due to him - Appellant filed an application under Section 11(6) and (8) of the Arbitration and Conciliation Act, 1996 for appointment of an Arbitrator for adjudication of all the disputes pertaining to Contract - Chief Justice of the High Court assigned the application to the Designated Judge, who dismissed the same - Whether there was a valid arbitration clause in the agreement entered - High Court held that Clause 29 of the Contract cannot be construed as an Arbitration Agreement or an Arbitration Clause for settlement of disputes - Held that:- in terms of Clause 29(a) and similar other clauses, any dispute or difference irrespective of its nomenclature in matters relating to specifications, designs, drawings, quality of workmanship or material used or any question relating to claim, right in any way arising out of or relating to the contract designs, drawings etc. or failure on the contractor’s part to execute the work, whether arising during the progress of the work or after its completion, termination or abandonment has to be first referred to the Chief Engineer or the Designated Officer of the Department. The Chief Engineer or the Designated Officer is not an independent authority or person, who has no connection or control over the work. As a matter of fact, he is having over all supervision and charge of the execution of the work. He is not required to hear the parties or to take evidence, oral or documentary. He is not invested with the power to adjudicate upon the rights of the parties to the dispute or difference and his decision is subject to the right of the aggrieved party to seek relief in a Court of Law. The decision of the Chief Engineer or the Designated Officer is treated as binding on the contractor subject to his right to avail remedy before an appropriate Court. The use of the expression ‘in the first place’ unmistakably shows that non-adjudicatory decision of the Chief Engineer is subject to the right of the aggrieved party to seek remedy. Therefore, Clause 29 which is subject matter of consideration in most of the appeals and similar clauses cannot be treated as an Arbitration Clause - The orders passed by the Designated Judge are set aside - Decided in favour of appellants.
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