TMI Blog1989 (9) TMI 400X X X X Extracts X X X X X X X X Extracts X X X X ..... pplied the materials in question as directed and as an amount of ₹ 2,50,000/- was not paid, they invoked clause 13 of the said agreement and asked the Superintending Engineer to enter into an arbitration. As it was refused they filed Judicial Misc. Case No. 37 of 86 in the court of the Assistant Dist. Judge, Alipore for referring the dispute to arbitration by Mr. H. B. Lahiri, a retired Superintending Engineer, Construction Board, Directorate of Public Works Department as Arbitrator to settle the dispute. The State appeared and contended that there was no arbitration clause and therefore the question of appointment of an arbitrator does not arise. The Id. Trial Judge construed clause 13 as an arbitration agreement and allowed the appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Circle shall be final. On perusal of the form which contained the contract between the parties will appear that clause 13 regulates the supply to be made prices of the materials to be charged and any other matters connected therewith. Other clauses do not deal with the amount, quantity, quality of materials suplied or specifications thereof. Mr. Mukherjee submits that the last sentence in clause 13 regarding decision of dispute between the parties must relate to the action taken by the Engineer in charge. It has no reference to the ultimate claim to be made by the contractor if he has any claim in respect of materials supplied by him he can file a suit for recovery of the amount. According to him since there was no arbitration agreeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ular form or wording, and the use of the technical or formal words such as 'arbitration' and 'arbitrator' is not required. The essential requirement is that the parties should intend to make a reference or submission to arbitration and should be ad idem in this respect. The clause that carne into consideration for interpretation of the Punjab High Court provided that in the matter of dispute the case shall be referred to the Superintending Engineer of the Circle whose order shall be final. This was interpreted to constitute a proper arbitration agreement. Mr. Deb has drawn our attention to a passage appearing in Russel on Arbitration 19th Edn. page 92. It states that if the parties are agreed that a binding contract was made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has to be arrived at on a dispute between the parties it is implied that the parties have to make out their cases and substantiate them. Only on the basis of such materials a decision can be arrived at in resolving the dispute between the parties. The clause also clearly lays down that the decision shall be final. As the validity of the agreement is not under challenge the decision so arrived at by the arbitrator must also be binding on the parties. As a result the clause must be interpreted to be a binding arbitration agreement. In a decision State of U.P. v. Tipper Chand the Supreme Court held that the clause under consideration before them which provided that except where otherwise specified in the contract the decision of the Superinte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to arbitration, then such an arrangement would spell out in an arbitration agreement. In another decision , the court held that where a clause in the contract makes provision for dipute between the parties for reference to Superintending Engineer of the Circle and though the words arbitration and awards were not mentioned in the said clause even then the clause was clear enough to show that the dispute that arises between the parties has to be referred to the Superintending Engineer. This was construed to be an arbitration agreement. 6. Let us now examine in the aforesaid background of law as interpreted by the Supreme Court and other High Courts referred to above whether clause 13 constitute an arbitration agreement. We have already q ..... X X X X Extracts X X X X X X X X Extracts X X X X
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