2004 (2) TMI 725 - SC - Indian Laws

Summary

Issues Involved: Interpretation of clause 64 of the agreement for appointment of arbitrators.

Summary:
The appellants and the respondent entered into a written agreement for work execution related to supplying and staking hand-broken ballast. Disputes arose, leading to the respondent filing for arbitration under Section 20 of the Arbitration Act, 1940. A Single Judge appointed Justice P.K Bahri as the sole arbitrator, which was challenged by the appellants. The appellants argued that as per clause 64 of the agreement, only two gazetted railway officers of equal status could be appointed as arbitrators. The Supreme Court found merit in this argument, citing the clause which explicitly stated that no person other than a gazetted railway officer should act as an arbitrator. Therefore, the appointment of Justice P.K Bahri as the sole arbitrator was set aside. The appellants were directed to appoint two gazetted railway officers as arbitrators within 30 days. The newly appointed arbitrators were required to enter into reference within one month and make their award within three months. The appeal was allowed in part with no order as to costs.