SILPPI REALTORS AND CONTRACTORS [P] LTD. v. CHIEF ENGINEER (NW), MILITARY ENGINEER SERVICES & THE ENGINEER-IN-CHIEF, IHQ OF DEFENCE (ARMY), NEW DELHI

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR. JUSTICE SHAJI P.CHALY** **MONDAY, THE 5TH DAY OF DECEMBER 2016/14TH AGRAHAYANA, 1938** ## **AR.No. 90 of 2016 ()** ## **--------------------** **APPLICANT : -----------** **SILPPI REALTORS AND CONTRACTORS [P] LTD., 66/3920, 'V', 2ND FLOOR, PENTA SQUARE, M.G.ROAD, KOCHI-682 035, REPRESENTED BY ITS MANAGING DIRECTOR F.EDISON.** **BY ADVS.SRI.RAJIV ABRAHAM GEORGE SRI.EAPEN ABRAHAM GEORGE** ## **RESPONDENT(S):** **-------------1. THE CHIEF ENGINEER(NW), MILITARY ENGINEER SERVICES, NAVAL BASE P.O., KOCHI-682 004. 2. THE ENGINEER - IN - CHIEF, IHQ OF MINISTRY OF DEFENCE (ARMY), KASHMIR HOUSE, RAJAJI MARG, NEW DELHI-110 011.** **BY ADV. SRI.DINESH R.SHENOY, CGC** **THIS ARBITRATION REQUEST HAVING BEEN FINALLY HEARD ON 28-11-2016 ALONG WITH WPC.33948/2016, THE COURT ON 05-12-2016 PASSED THE FOLLOWING:** **mbr/** ## **AR.No. 90 of 2016 ()** ## **--------------------** ## **APPENDIX** ## **PETITIONERS' ANNEXURES:** |**ANNEXURE 1 :**|**TRUE COPY OF LETTER OF TERMINATION**| |---|---| ||**DATED 26.3.2015 FROM THE 1ST RESPONDENT TO THE**| ||**APPLICANT.**| |**ANNEXURE 2 :**|**TRUE COPY OF REPLY DATED 29.5.2015 FROM THE**| ||**APPLICANT TO THE 1ST RESPONDENT.**| |**ANNEXURE 3 :**|**TRUE COPY OF LETTER DATED 11.4.2016 FROM THE**| ||**APPLICANT TO THE 1ST RESPONDENT.**| |**ANNEXURE 4 :**|**TRUE COPY OF LETTER DATED 4.5.2016 FROM THE**| ||**DIRECTOR (CONTRACTS) OF THE RESPONDENTS TO THE**| ||**APPLICANT.**| |**ANNEXURE 5 :**|**TRUE COPY OF LETTER DATED 24.5.2016 FROM THE**| ||**APPLICANT TO THE 1ST RESPONDENT.**| |**ANNEXURE 6 :**|**TRUE COPY OF LETTER DATED 31.5.2016 FROM THE 1ST**| ||**RESPONDENT TO THE APPLICANT.**| |**ANNEXURE 7 :**|**TRUE COPY OF LETTER DATED 4.7.2016 FROM THE**| ||**APPLICANT TO THE 1ST RESPONDENT.**| |**ANNEXURE 8 :**|**TRUE COPY OF NOTICE DATED 20.8.2016 FROM THE**| ||**APPLICANT TO THE 1ST RESPONDENT WITH COPY TO**| ||**THE ENGINEER-IN-CHIEF, IHQ OF MINISTRY OF**| ||**DEFENCE (ARMY), NEW DELHI.**| |**ANNEXURE 9 :**|**TRUE COPY OF THE ARBITRATION AGREEMENT CONTAINED**| ||**IN CONDITION 70 OF THE GENERAL CONDITIONS OF**| ||**CONTRACT.**| |**RESPONDENTS' ANNEXURES**<br>**:**|| |**ANNEXURE R1A :**|**TRUE PHOTOCOPY OF ACCEPTANCE LETTER.**| |**ANNEXURE R1B :**|**TRUE PHOTOCOPY OF WORK ORDER NO.1.**| |**ANNEXURE R1C :**|**TRUE PHOTOCOPY OF LETTER NO.8791/88/E8 DATED 25**| ||**AUG. 2012.**| |**ANNEXURE R1D :**|**TRUE PHOTOCOPY OF 8791/97/E8 DATED 20 SEPTEMBER,**| ||**2012.**| |**ANNEXURE R1E :**|**TRUE PHOTOCOPY OF HQ CE(NW) KOCHI LETTER**| ||**NO.890368/128/E8 DATED 4 OCTOBER, 2012.**| **--2--** **AR.No. 90 of 2016 ()** ## **--2--** ## **--------------------** |**ANNEXURE R1F :**|**TRUE PHOTOCOPY OF LETTER NO.8791/76/E8 ISSUED BY**| |---|---| ||**GARRISON ENGINEER, FORT KOCHI DATED 23.5.2012.**| |**ANNEXURE R1G :**|**TRUE PHOTOCOPY OF LETTER NO.8791/77/E8 DATED 23.**| ||**MAY 2012.**| |**ANNEXURE R1H :**|**TRUE PHOTOCOPY OF LETTER DATED 18.8.2012.**| |**ANNEXURE R1I :**|**TRUE PHOTOCOPY OF LETTER NO.8791/89/E8 DATED 4**| ||**SEP. 2012.**| |**ANNEXURE R1J :**|**TRUE PHOTOCOPY OF LETTER NO.2012/SRCL/CT/905**| ||**DATED 7 SEP. 2012.**| |**ANNEXURE R1K :**|**TRUE PHOTOCOPY OF LETTER NO.2012/SRCL/CT/1071**| ||**DATED 15 NOV. 2012.**| |**ANNEXURE R1L :**|**TRUE PHOTOCOPY OF LETTER NO.2012/SRCL/CT/1105**| ||**DATED 7 DECEMBER, 2012.**| |**ANNEXURE R1M :**|**TRUE PHOTOCOPY OF LETTER NO.8791/144/E8 DATED**| ||**22 DECEMBER 2012.**| |**ANNEXURE R1N :**|**TRUE PHOTOCOPY OF LETTER NO.2013/SRC/CTM/135**| ||**DATED 19 MARCH 2013.**| |**ANNEXURE R1O :**|**TRUE PHOTOCOPY OF LETTER NO.890368/171/E8 DATED**| ||**11 JULY 2013.**| |**ANNEXURE R1P :**|**TRUE PHOTOCOPY OF LETTER NO.2013/SRCL/CT/438**| ||**DATED 1 AUGUST 2013.**| |**ANNEXURE R1Q :**|**TRUE PHOTOCOPY OF LETTER NO.2013/SRCL/CT/459**| ||**DATED 14 AUGUST 2013.**| |**ANNEXURE R1R :**|**TRUE PHOTOCOPY OF LETTER NO.890368/189/E8 DATED**| ||**21 OCTOBER 2013.**| |**ANNEXURE R1S :**|**TRUE PHOTOCOPY OF LETTER NO.2013/SRCL/CT/600**| ||**DATED 28 OCTOBER 2013.**| |**ANNEXURE R1T :**|**TRUE PHOTOCOPY OF LETTER NO.8791/219/E8 DATED 12**| ||**NOVEMBER 2013.**| |**ANNEXURE R1U :**|**TRUE PHOTOCOPY OF LETTER NO.890368/191/E8 DATED**| ||**24 OCTOBER, 2013.**| |**ANNEXURE R1V :**|**TRUE PHOTOCOPY OF LETTER NO.8791/220/E8 DATED 13**| ||**NOVEMBER 2013.**| **--3--** **--3--** **AR.No. 90 of 2016 ()** ## **--------------------** |**ANNEXURE R1W :**|**TRUE PHOTOCOPY OF LETTER NO.890368/200/E8 DATED**| |---|---| ||**6 NOVEMBER, 2013.**| |**ANNEXURE R1X :**|**TRUE PHOTOCOPY OF LETTER NO.8791/227/E8 DATED 30**| ||**JANUARY, 2014.**| |**ANNEXURE R1Y :**|**TRUE PHOTOCOPY OF LETTER NO.2014/SRCL/CT/206**| ||**DATED 22 FEBRUARY, 2014.**| |**ANNEXURE R1Z :**|**TRUE PHOTOCOPY OF LETTER NO.8791/249/E8 DATED**| ||**JUNE 2014 ISSUED BY GARRISON ENGINEER, FORT**| ||**KOCHI.**| |**ANNEXURE R1AA :**|**TRUE PHOTOCOPY OF FINAL NOTICE VIDE LETTER**| ||**NO.890368/235/E8 DATED 30 JULY 2014 ISSUED BY**| ||**THE RESPONDENT.**| |**ANNEXURE R1AB :**|**TRUE PHOTOCOPY OF LETTER NO.2014/SRCL/CT/609**| ||**DATED 12 AUGUST 2014 ISSUED BY THE APPLICANT.**| |**ANNEXURE R1AC :**|**TRUE PHOTOCOPY OF NOTICE VIDE LETTER**| ||**NO.890368/260/E8 DATED 31 JAN 2015 ISSUED BY THE**| ||**RESPONDENT.**| |**ANNEXURE R1AD :**|**TRUE PHOTOCOPY OF LETTER NO.2015/SRCL/CT/178**| ||**DATED 9 MARCH 2015 ISSUED BY THE APPLICANT.**| |**ANNEXURE R1AE :**|**TRUE PHOTOCOPY OF CONDITION 54 OF GENERAL**| ||**CONDITION OF CONTRACT (IAFW-2249).**| |**ANNEXURE R1AF :**|**TRUE PHOTOCOPY OF LETTER NO.890328/302/E8 DATED**| ||**26 JUNE 2015 ISSUED BY THE RESPONDENT.**| |**ANNEXURE R1AG :**|**TRUE PHOTOCOPY OF LETTER NO.2016/SRCL/CT/201**| ||**DATED 11 APRIL 2016 ISSUED BY THE APPLICANT.**| |**ANNEXURE R1AH :**|**TRUE PHOTOCOPY OF LETTER NO.890368/327/E8 DATED**| ||**4 MAY 2065 ISSUED BY THE RESPONDENT.**| |**ANNEXURE R1AI :**|**TRUE PHOTOCOPY OF CONDITION 54 OF GENERAL**| ||**CONDITION OF CONTRACT IAFW-2249.**| |**ANNEXURE R1AJ :**|**TRUE PHOTOCOPY OF LETTER NO.890368/329/E8 DATED**| ||**31 MAY 2016 ISSUED BY THE RESPONDENT.**| |**ANNEXURE R1AK :**|**TRUE PHOTOCOPY OF LETTER NO.890368/359/E8 DATED**| ||**21 JULY 2016 ISSUED BY THE APPLICANT.**| |**ANNEXURE R1AL :**|**TRUE PHOTOCOPY OF LETTER NO.890368/359/E8 DATED**| ||**26 SEPTEMBER 2016.**| ||**--4--**| **--4--** ## **AR.No. 90 of 2016 ()** **--------------------** **ANNEXURE R1AM : TRUE PHOTOCOPY OF LETTER NO.SRCL/MES/MDACCN/CDE/426 DATED 21 OCTOBER 2016.** **//TRUE COPY//** **P.S. TO JUDGE** **mbr/** ## **SHAJI P. CHALY, J.** -------------------------------------------------- ## **A.R.No.90 of 2016 & W.P.(C) No.33948 of 2016 ----------------------------------------------Dated this the 5[th] day of November, 2016** ## **O R D E R** Captioned arbitration request and writ petition are filed by one and the same party. They are materially connected and therefore I heard them together, and propose to pass a common order. ## A.R.No.90 of 2016 2. In response to a notice inviting tenders dated 14.07.2011 for the work of “Provision of Deficient Type II Married Accommodation for Civilian Defence Employees at Kochi” as amended vide letters dated 02.08.2011, 04.08.2011 and 17.08.2011, applicant submitted its competitive tender, which after negotiations was accepted by the 1[st] respondent vide Letter of Acceptance dated 31.03.2012, for a total cost of Rs.17,25,33,265.87/-. Thereafter, a formal written agreement was entered into bearing No.CE (NW)/KOCHI/61 OF 2011-12. The work was to be completed in two phases, Phase I to be completed within twelve months consisting of Sample Quarter, and Phase-II being all remaining works other than that **A.R.No.90/2016 & W.P.(C) No.33948/16** 2 covered under Phase-I, within 28 months. The site was handed over on 03.05.2012, Phase-I was to be completed by 02.05.2013, and Phase-II by 02.09.2014, as evident from MES Contractor's Order Sheet dated 26.04.2012, issued by the Garrison Engineer of the respondent to the applicant among others. 3. According to the applicant, the site was handed over just before the commencement of the south-west monsoon of 2012, thus limiting the work that could be carried out at site during such period, especially considering the fact that tenders had been invited as early as in July, 2011. The work under the contract envisaged construction of an RCC framed structure in 15 stories, consisting of stilts plus 14 upper floors for 58 Type II Quarters including lift wells, Machine Room, RCC Water Tanks etc., construction of a block of buildings in double storey for Sub-station, Pump House over semi underground sump and Static Water Tank, construction of an open well of 5 m. dia and 3 m. depth with RCC walls etc. 4. Consequent to the handing over of the site, applicant had under cover of three letters dated 19.05.2012 submitted 20mm graded stone aggregate, crushed metal sand **A.R.No.90/2016 & W.P.(C) No.33948/16** 3 as fine aggregate, concrete admixture Fosroc-Conplast - P211, and PPC cement 43 grade of Coromandel brand of India Cements Ltd., for necessary tests and approval and also sought approval for procurement of reinforcement steel and cement from RINL, SAIL and India Cements respectively. The applicant had also satisfied necessary parameters as stipulated under the agreement. Even though the samples of the said materials were submitted as early as on 19.05.2012, the same were forwarded by the Assistant Garrison Engineer under cover of letter dated 15.06.2012 after which the Zonal Lab submitted the sieve analysis of coarse and fine aggregates vide his report dated 02.07.2012. According to the applicant, applicant has complied with the stipulations contained under the agreement, however the authorities have found fault with the applicant. So also, it is stated, the site for the work under the contract being situated in a low lying area, the same was fully water logged due to the heavy rains which had commenced from June, 2012, rendering it impossible for the applicant to even ply any vehicles in the area to transport equipments, machinery and materials. In spite of all these intervening adverse circumstances, applicant cleared the site of all **A.R.No.90/2016 & W.P.(C) No.33948/16** 4 vegetation and other obstructions and had completed construction of Site Office and Labour Shed in the interregnum. 5. After the rains subsided in September, 2012, applicant applied for electricity connection in order to operate its machinery and equipments, and took necessary steps to record the levels of the entire project area. That apart, it is stated, in spite of being aware of the adverse circumstances, the Director (Contracts) by letter dated 04.10.2012 sent, on 1[st] respondent's behalf stated that it was not proceeding with the work with due diligence, and accordingly called upon the applicant to accelerate the progress of the work so as to complete the same within the contract period. Intermittent communications were issued by and between the parties with respect to the progress of the work and other allied matters. During the period 2012, there were correspondences by and between the applicant and the respondents in respect of the pace of work carried on by the applicant. Even during 2013, applicant by its communication issued on various dates, intimated the reasons for non-completion of the work within the time, and informed that all arrangements have been made to accelerate the progress of the works and complete the same **A.R.No.90/2016 & W.P.(C) No.33948/16** 5 as expeditiously as possible. 6. According to the applicant, by a letter dated 17.07.2014, the Garrison Engineer partially agreed with some of the reasons for the delay attributed by the applicant while unjustly declining to agree with the other causes. However, by notice dated 31.01.2015, received by the applicant on 09.02.2015, 1[st] respondent intimated that even though the date of completion was over, the progress achieved on ground was only about 24%, that ample opportunities had been given to the applicant to speed up the works, but it was noticed that the applicant had failed to progress, the work at the desired speed, that the reasons attributed for slow progress were not convincing, that on account of the same, 1[st] respondent was thereby issuing the final notice to accelerate the progress of work and directed the applicant to amend the CPM Chart in consultation with the Garrison Engineer and threatened cancellation of the contract in terms of Clause 54 of IAFW - 2249, in case the then state of affairs continued for a period of 15 days. **A.R.No.90/2016 & W.P.(C) No.33948/16** 6 7. The said notice was replied by the applicant vide letter dated 14.02.2015 to the 1[st] respondent, in which the applicant had listed the causes for delay which have also caused huge financial loss due to time overrun and assured that on the basis of the CPM Chart prepared in consultation with the Garrison Engineer, the applicant had programmed to execute works worth a further Rs.3 crores before end March, 2015 and keeping up the said tempo to complete the work by 31.12.2015, and further requested not to take any action to cancel the contract. According to the applicant, by letter dated 21.02.2015 addressed to the 1[st] respondent, applicant intimated that the Quarry and Crusher Units in the State of Kerala had come to a standstill from Monday, 16.02.2015, due to the indefinite strike called by the All Kerala Quarry and Crusher Units Association. Thereafter, various correspondences were exchanged by an between the parties. 8. However, by a letter dated 26.03.2015, sent by Speed Post on 18.04.2015, and received by the applicant on 20.04.2015, in exercise of the powers allegedly vested with the 1[st] respondent in terms of condition 54 of the General Conditions of Contract and without prejudice to any other **A.R.No.90/2016 & W.P.(C) No.33948/16** 7 right or remedy which had or would accrue to the Government, cancelled the contract allegedly with effect from 11.04.2015, and intimated that the works would be got completed by the 1[st] respondent through other agencies at applicant's risk and cost, evident from Annexure-1. 9. As per the letter dated 29.05.2015, applicant intimated the 1[st] respondent the said notice of termination had been issued without taking into consideration the facts and circumstances leading to the delay in completion which were attributable to reasons beyond the applicant's control, which is produced as Annexure-2. 10. After the termination of the contract also, there were intermittent correspondences by and between the parties, evident from Annexures-A3 to A5. However, as per letter dated 31.05.2016, applicant was informed that the contract for completing balance works had been concluded through another agency for an amount of Rs.17,87,34,980.60/-, and accordingly an amount of Rs.7,24,54,601/- was due from the applicant allegedly under Condition No.54 of IAFW-2249, as per the details of recovery enclosed as Appendix 'A' and requested the applicant to remit the said amount in the **A.R.No.90/2016 & W.P.(C) No.33948/16** 8 Government Treasury/State Bank of India, within 30 days. 11. The applicant being aggrieved by the action on the part of the respondents issued Annexure-6 letter dated 31.05.2016, and intimated that it has no intention to remit the amount since it has suffered huge damages on account of the contract entered into by and between the parties. The termination of the contract at the risk and cost of the applicant was also disputed. Claims were raised by the applicant before the 1[st] respondent for an amount of Rs.6,81,37,663/-. These are the background facts under which the arbitration request is filed by the applicant. 12. W.P.(C) No.33948 of 2016, is filed by the applicant in the arbitration request, to quash the Demand Notice dated 31.05.2016 issued by the respondents, directing the applicant to pay liquidated damages quantified by the respondents under clause 54 of the General Conditions of contract, and for other related reliefs. 13. Respondents have filed a counter affidavit disputing the claims and demands made by the applicant, and also the allegations made against the respondents. The sum and substance of the objection is that, the delay had occurred to **A.R.No.90/2016 & W.P.(C) No.33948/16** 9 the work, solely due to the irresponsibility of the applicant, and consequent to the lethargic attitude of the applicant, respondents have suffered huge loss and therefore it is entitled to recover the damages in accordance with the General Conditions of Contract. Even though they had issued a demand notice asking the applicant to remit the amount, applicant has not cared to do so. All further claims and demands raised by the applicant in the notices sent to the respondents, and in the arbitration request are denied. It is the contention of the respondents, the applicant has no right to make any claims or demands in respect of the contract, on the other hand, the respondents are entitled to realize the amount quantified as liquidated damages in accordance with General Conditions of Contract binding on the parties. 14. Heard learned counsel for the applicant and the learned Central Government Counsel appearing for the respondents. Perused the documents on record and the pleadings put forth by the respective parties. 15. The prime question to be considered is whether there is an arbitrable dispute pending by and between the parties in order to refer the matter for arbitration, as **A.R.No.90/2016 & W.P.(C) No.33948/16** 10 requested in the arbitration request above. The detailed discussion of facts and circumstances and the counter affidavit filed by the respondents show that there is a serious dispute existing by and between the parties. The applicant has raised a claim against the respondents. The respondents have already quantified liquidated damages against the applicant after termination of the contract, and the parties disputed the claims raised against each other. Therefore, the tenor of the contentions shows, serious disputes exist by and between the parties. 16. As provided under Condition No.70 of the General Conditions of Contract, evident from Annexure-9, any dispute that arises by and between the parties is to be referred to the sole arbitration of an Engineer Officer to be appointed by the authority mentioned in the tender documents. Clause 70 further states, unless both parties agree in writing, such reference shall not take place until after the completion of or alleged completion of the works or termination or determination of the contract under Condition Nos.55, 56 and 57 thereof. It is further provided, in the event of abandonment of the works or cancellation of the contract **A.R.No.90/2016 & W.P.(C) No.33948/16** 11 under Condition Nos.52, 53 of 54 thereof, such reference shall not take place until alternative arrangements have been finalised by the Government to get the works completed by or through any other contractor or contractors or Agency or Agencies. There are other enabling factors facilitating the parties to proceed with the arbitration. 17. Applicant has issued Annexure-8 notice dated 20.08.2016, notifying the 1[st] respondent to refer the subject matter of the dispute for arbitration. According to the applicant, in spite of lapse of more than 30 days after receipt of the notice dated 20.08.2016, respondents have failed to exercise its authority and appoint an impartial person as arbitrator to adjudicate upon the disputes, who committed breach of contract, resulting in non-completion of the works within the stipulated period and other subject matter of disputes by and between the parties. 18. Even though the disputes existing by and between the parties are not seriously disputed by the learned CGC appearing for the respondents, it is contended, arbitration as agreed upon by and between the parties as per Clause 70 of the General Conditions of Contract, is binding on the parties **A.R.No.90/2016 & W.P.(C) No.33948/16** 12 and therefore an Engineer may be appointed as the arbitrator to resolve the dispute. 19. Learned counsel has invited my attention to the judgment of the Apex Court in _**'Indian Oil Corporation Ltd. v. Raja Transport Pvt. Ltd.**_ ' [(2009) 8 SCC 520]. Going through the facts of the said case, I am of the considered opinion, the facts and circumstances involved therein were entirely different. There, both parties had the liberty to refer the dispute to the arbitrator agreed upon by and between the parties as per the terms of the agreement for arbitration. However, the applicant did not take any steps to refer the dispute to the named arbitrator by making a request to the other party, and therefore it was held that there was no demand at all as per clause 69 of the agreement for arbitration entered into by and between the parties. As noted above, here is a case where, Clause 70 of the General Conditions of Contract, evident from Annexure-8 request made by the applicant, is to be referred to a sole arbitration of an Engineer Officer “to be appointed by the authority” as per the tender document. As per Annexure-8, a demand was made, however, no action was initiated to refer the dispute to arbitration, which **A.R.No.90/2016 & W.P.(C) No.33948/16** 13 is the prerogative of the authority alone. Annexure-8 notice is dated 20.08.2016 and this request was filed before this Court on 27.09.2016, 30 days after the receipt of notice by the respondents. The postal acknowledgement card produced along with Annexure-8 shows that the notice was received on 23.08.2016 by the 1[st] respondent, and on 01.09.2016 by the 2[nd] respondent. However, no reply was sent nor any efforts were made to appoint an arbitrator either within 30 days or thereafter before filing of the arbitration request before this Court by the applicant. 20. In that view of the matter, learned counsel for the applicant has invited my attention to the judgment of the Apex Court in _**'M/s. Deep Trading Company v. M/s. Indian Oil Corporation & others**_ ' [CDJ 2013 SC 233], a three Judge Bench, wherein, the principles of law laid down in various judgments rendered by the Apex Court, in respect of the power of the Chief Justice to appoint an arbitrator under Sec.11(6) of the Arbitration and Conciliation Act, 1996 was considered, and finally concluded in paragraphs 22 and 23 as follows: _“22. Learned senior counsel for the Corporation, however, referred to an unreported order of this Court in Newton Engineering [M/s. Newton Engineering and_ **A.R.No.90/2016 & W.P.(C) No.33948/16** 14 _Chem. Ltd. v. Indian Oil Corporation Ltd. & Ors'. [Civil Appeal No.7587 of 2012; Decided on 18.10.2012]]. The arbitration clause in that case was similar to the arbitration clause in the present case. The contractor had written to the Corporation to appoint E.D. (NR) as sole arbitrator as per the agreement. But the Corporation wrote back to the contractor that office of E.D.(NR) has ceased to exist due to internal reorganisation. The Corporation offered to the contractor to substitute E.D.(NR) with Director (Marketing) to which contractor did not agree. The Corporation then appointed Director (Marketing) as arbitrator. The contractor made an application under Section 11(6)(c) read with Sections 13 and 15 of the 1996 Act for appointment of a retired Judge as a sole arbitrator. The Single Judge dismissed the petition filed by the contractor. Against that order, the special leave petition was filed by the contractor. This Court in paragraph 9 of the order stated as follows:_ _“9. Having regard to the express, clear and unequivocal arbitration clause between the parties that the disputes between them shall be referred to the sole arbitration of the ED(NR) of the Corporation and, if ED (NR) was unable or unwilling to act as the sole arbitrator, the matter shall be referred to the person designated by such ED(NR) in his place who was willing to act as sole arbitrator and, if none of them is able to act as an arbitrator, no other person should act as arbitrator, the appointment of Director (Marketing) or his nominee as a sole arbitrator by the Corporation cannot be sustained. If the office of ED(NR) ceased to_ **A.R.No.90/2016 & W.P.(C) No.33948/16** 15 _exist in the Corporation and the parties were unable to reach to any agreed solution, the arbitration clause did not survive and has to be treated as having worked its course. According to the arbitration clause, sole arbitrator would be ED(NR) or his nominee and no one else. In the circumstances, it was not open to either of the parties to unilaterally appoint any arbitrator for resolution of the disputes. Sections 11(6)(c), 13 and 15 of the 1996 Act have no application in light of the reasons indicated above.”_ _23. We are afraid that what has been stated above has no application to the present fact situation. In Newton Engineering, this Court was not concerned with the question of forfeiture of right of the Corporation for appointment of an arbitrator. No such argument was raised in that case. The question raised in Newton Engineering was entirely different. In the present case, the Corporation has failed to act as required under the procedure agreed upon by the parties in Clause 29 and despite the demand by the dealer to appoint the arbitrator, the Corporation did not make appointment until the application was made under Section 11(6). Thus, the Corporation has forfeited its right of appointment of an arbitrator. In this view of the matter, the Chief Justice ought to have exercised his jurisdiction under Section 11(6) in the matter for appointment of an arbitrator appropriately. The appointment of the arbitrator by the Corporation during the pendency of proceedings under Section 11 (6) was of no consequence.”_ **A.R.No.90/2016 & W.P.(C) No.33948/16** 16 In my considered opinion, the legal position with respect to the power of this Court under Sec.11(6) of Act 1996 is absolute in accordance with the facts and circumstances of the case. 21. Even though the learned CGC has strenuously contended that this Court has no other option than to appoint an arbitrator as agreed upon by and between the parties, I am of the considered opinion, going by the tenor of provisions of Sec.11, it is categoric and specific, if an arbitrator is not appointed, as per the demand/request made by one party, by the appointing authority, either within 30 days period or thereafter, but before the filing of the arbitration request, this Court is vested with ample powers to appoint any arbitrator of its choice. 22. The contentions raised by and between the parties show that various legal questions are to be decided with respect to the issues leading to the termination of the contract and claiming liquidated damages, and more than any technical aspects, legal issues are to be sorted out by and between the parties, which alone, in my considered opinion, can attain a finality to the disputes pending by and between the parties. **A.R.No.90/2016 & W.P.(C) No.33948/16** 17 23. Having regard to the entire facts and circumstances, request is granted, and I appoint Sri Justice S. Siri Jagan, a former Judge of this Court, Flat No.4C, Star Paradise, Cheruparambath 1[st] Cross Road, Cochin - 682 020, as the arbitrator to resolve the disputes by and between the parties. Learned counsel for the applicant has produced a statement from the arbitrator, as per a memo dated 23.11.2016, the disclosure as provided under Sec.12(1)(b) of the Act, 1996. The Registry will append along with this order the said certificate. 24. So far as the contentions in W.P.(C) No.33948 of 2016 with respect to the challenge made on the termination of the contract, same is also a subject matter to be considered by the arbitrator. Therefore, I do not propose to make any finding on merits in respect of the contentions raised in the writ petition, and leave open the liberty of the parties to make their claims and counter claims in respect of the same also before the arbitrator. Resultantly, the writ petition is dismissed, leaving open the liberty of the parties to raise claims and counter claims with respect to the contentions raised in the writ petition, **A.R.No.90/2016 & W.P.(C) No.33948/16** 18 before the learned arbitrator. Sd/- **SHAJI P. CHALY JUDGE** //true copy// P.S. to Judge St/30.11.2016