M/S. NATIONAL BUILDING CONSTRUCTION CORPORATION LTD. & ORS. Vs. M/S. MALKANI CONSTRUCTION (P) LTD. CONTRACTOR

JUDGEMENT

(1.) The main question for consideration in this appeal is whether on interpretation of Sec. 20(4) of the Arbitration Act, 1940, hereinafter 'the Act", it is obligatory on the part of the Court to appoint an Arbitrator in terms of the contract from amongst the category of persons named in the agreement or it can appoint an arbitrator of its choice.

(2.) The appellant National Building Construction Corporation Ltd., hereinafter 'the Corporation is a Government of India undertaking. The respondent is a private limited company and it carries on business of Civil Engineering Contract Works. It entered into an agreement with the Corporation for construction of Gauhati Medical College Hospital (shuttering works) at Dispur. Due to various circumstances, tire actual work could not commence and dispute arose between the parties in regard to the conditions of contract. There was an arbitration clause in the agreement between the parties which read as follows :

(3.) In terms of the said Clause, the Chairman-cum-Managing Director of the appellant-Corporation appointed its Resident Engineer, Sri A.K. Maiti as a sole arbitrator. The respondent-contractor filed an application in the Court under Sec. 8 read with sub-section 20 of the Arbitration Act objecting to the appointment on the ground that the Arbitrator appointed in terms of Clause 20 of the contract by the Chairman-cum-Managing Director being Resident Engineer subordinate 10 the Regional Manager as well as to other high officials in the Corporation, there was apprehension of not getting fan and impartial justice and accordingly, prayed for appointment of an Arbitrator from outside the influence of-the Corporation. However, in the meantime, Mr. Maiti resigned as he left for Libiya. The Corporation, therefore, wanted to appoint another Arbitrator in terms of Clause 20 of the contract Agreement.