National Buildings Construction ... vs Antia Electricals Pvt. Ltd. And ...
2003 Latest Caselaw 527 Del

JUDGMENT

A.K. Sikri, J.

1. The facts of this case are in narrow compass and there is hardly any dispute about the same. Before addressing the legal issue involved, it would be necessary to take stock of these facts.

2. The petitioner which is a Public Sector Company incorporated under the Indian Companies Act succeeded in getting a contract "for construction of Industrial Building and main station of Baghdad AI-Qaim Akashat Railway Project" (hereinafter to be referred as 'main contract' for short) from Iraqi Government Company, called the State Company for Contracts of Industrial Projects (SCCIP) on 28.09.1982. After bagging this contract, the petitioner awarded a sub-contract on 12.03.1983 to the respondent No. 1 for the electrical works relating to the said project. Clauses 17 and 45 of the General Conditions of Contract of the main contract, which according to the petitioner are an integral part of the contract are in the following terms :

Clause 17--Governing Law :

"17.0. The Contract shall be and shall be deemed to be an Iraqi Contract and shall be governed by and construed according to the Laws in force in Iraq and Iraqi Courts shall have exclusive jurisdiction to hear and determine all actions and proceedings arising out of the Contract and the Contractor hereby submits himself to the jurisdiction of the Iraqi Courts for any such actions and proceedings". (stress added).

Clause 45--Settlement of Disputes - Arbitration :

"45.1. If any dispute or difference of any kind whatsoever shall arise between the Employer or the Engineer and the Contractor in connection with or arising out of the contract or the carrying out of the Works (whether during the progress of the works or after their completion, and whether before or after the termination or abandonment of the Contract) it shall in the first place be referred to and settled by the Engineer who within a period of (90) days after being requested by either party to do so shall give written notice of his decision to the Employer and the Contractor........If the Engineer shall fail to give notice of his decision as aforesaid within a period of (90) days after being requested as aforesaid, or if either the Employer or the Contractor be dissatisfied with any such decision then ......... the matter or matter in dispute be referred to arbitration as hereinafter provided.

The Employer and the Contractor shall each appoint an independent member to a committee of arbitration and the two members thus appointed shall agree upon a third member to act as a Chairman of the Committee. If agreement on the appointment of a Chairman cannot be reached within 14 days from the last date of their appointment then the Employer or the Contractor shall each have the right to request a competent Court to appoint the third member in accordance with proceedings provided in the Iraqi Code of Civil Procedures.

45.2 The venue of arbitration shall be in Iraq. The party requiring arbitration shall pay the fees and other costs of arbitration, which shall be finally borne by the party against whom the arbitration award shall be taken". (stress added).

3. Clause 4.7 of the sub-Contract stipulated that all conditions mentioned in the contract with the SCCIP Iraq by the petitioner shall be applicable to the respondent No. 1 - Sub-Contractor also on back to back basis except for those mentioned in this agreement. As would be noticed later, the submission of the petitioner is that there is no arbitration clause contained in the Sub-Contract and by virtue of Clause 4.7 of the Sub-Contract it is Clause 45 of the main contract relating to arbitration which would be applicable in the event of any dispute between the petitioner and respondent No. 1. The petitioner states in the petition that the contract was completed in Iraq and respondent No. 1 took full and final payment in respect thereof for which Certificate dated 24.11.1988 was also given by the respondent No. 1. However, long thereafter, respondent No. 1 wrote communication dated 11.12.2000 to the petitioner raising disputes in respect of certain payments allegedly due to respondent No. 1 and further stating that since as per the arbitration clause contained in the contract, the Arbitral Tribunal was to consist of 3 Members, one each to be appointed by both the parties and third Arbitrator to be appointed by the said two Arbitrators, respondent No. 1 was nominating Mr. Justice (Retd.) P.K. Palli as its Arbitrator and called upon the petitioner to nominate its Arbitrator. The petitioner vide its reply dated 11.01.2001 nominated Shri V.K. Anand its Director as petitioner's nominee Arbitrator. The two Arbitrators thereafter appointed Justice A.B. Rohtagi (Retd.) as the Presiding Arbitrator. Respondent No. 1 filed its claim before the Arbitral Tribunal to which the petitioner filed written statement and took number of preliminary objections, one of them being that there was no arbitration agreement between the parties. The Arbitral Tribunal framed number of issues on the basis of these pleadings and issue Nos. 2, 5, 6, 7 and 14 were drawn as preliminary issues, which are :

"Issue No. 2 : Whether there is an Arbitration Agreement between the parties ? If so, what are the content thereof and to what effect ?

Issue No. 5 : Whether the Arbitral Tribunal is properly constituted ?

Issue No. 6 : Whether the respondents are estopped from challenging the jurisdiction of the Arbitral Tribunal ?

Issue No. 7 : Whether the decision of Engineer is a pre-requisite before invoking arbitration clause ? Is the arbitration maintainable without reference to the Engineer ?

Issue No. 14 : Whether the cost of arbitration are to be borne initially by the claimant alone ? If so, to what effect ?"

4. After hearing the arguments on these issues the Arbitral Tribunal has given its interim Award dated 13.05.2002. The two Arbitrators have decided all the aforesaid issues in favor of respondent No. 1 and against the petitioner and the third Arbitrator on the other hand, has returned his findings to the effect that there was no arbitration agreement between the parties and the Arbitral Tribunal was not properly constituted. Since the majority decided the issues in favor of respondent No. 1 the effect of that is that matter on merits is to now proceed before the Arbitral Tribunal. The majority opinion about the existence of arbitration is as follows :

"Mr. Seth argued that arbitration agreement is not a condition of the contract. He referred us to . Generally speaking, this is correct that arbitration clause is quite distinct from other clauses of the contract. But where the question is one of incorporation it means that you take a part of certain document or the whole of it and set it out in another by making a reference to it. [See the owners and Parties v. STC, 2001(3) Arb. LR 96 (SC). If the contract is on back to back basis then all the conditions including the arbitration agreement shall be deemed to have been incorporated in the contract of the contractor and the sub-contractor. Clause 45 will not apply to this arbitration because it is impractical and unworkable. It was never intended by the parties that for any dispute between the contractor and the sub-contractor they will have to go to Iraq and submit themselves to Iraqi laws and the Arbitrators also will be required to go to Iraq to decide the dispute according to Iraqi laws.

We are quite ignorant of the Iraqi laws. It was never contemplated by the parties that Indian Arbitrators sitting in Iraq will decide the dispute under the Iraqi Laws. This argument is patently absurd. It amounts to negation of arbitration. This is nothing but an attempt to create hurdles and obstacles in the smooth progress of arbitration.

"An Arbitrator is a creature of an arbitration agreement", the Supreme Court has said [See Secretary, Irrigation Department v. Govt. of Orissa, ]. The key question is : Which is the arbitration agreement here? In our opinion it is contained in Clause Tenth. We should save the arbitration agreement by leaning in favor of Clause Tenth.

There are four good reasons why we should prefer clause Tenth to Clause 45. Firstly, it is later in point of fane. Clause Tenth was inserted in the Contract in 1982 while Clause 45 was printed in 1980. Secondly, Clause Tenth is typed while Clause 45 is printed. It is settled law that where in the printed matter some alteration is desired by typing the typed matter supersedes the printed matter to that extent. [See Mool Chand v. Associated Agencies AIR 1942 Mad. 139 ; Ratilal v. Dalmia Cement AIR 1943 Bom. 229]. Thirdly, Clause 45 lands us in absurdities. Counsel suggests that the parties go to Iraq and find out two Arbitrators-men well versted in Iraqi laws and procedure. They in turn will appoint a "Chairman" -again a man of Iraqi law. The Iraqi laws will be applied. The sittings will be in Iraqi Courts which will have jurisdiction. Iraqi lawyers will have to be engaged. The award will be passed according to Iraqi Laws. God knows how the award of a totalitarian country will be enforced in India.

Fourthly, Clause 45 contemplates international arbitration when one party is a foreign national, Therefore, it makes provisions in favor of Iraqi Laws. Clause Tenth deals with domestic arbitration where both parties are Indians. To apply Clause 45 to a case where both parties are Indians is to fit somehow a square peg in a round hole,

Clause Tenth contemplates nothing of the kind, It is a straight forward arbitration agreement to which Indian substantive and procedural laws applies. Both parties are Indians and they intended arbitration to be governed by their own laws. That is what CMD thought. By virtue of the authority vested in him he appointed an Indian Arbitrator. His letter dated 11.01.2001 is well worded. It seems to have been drafted by a lawyer. It uses the word "whereas" twice. "Whereas" means a recital of past events. It is a familiar term known to draftsman when he drafts deeds indenture. It is a formal deed of reference. The recital speaks of past outstanding disputes and the need to resolve them by arbitration,

On the whole we are satisfied that we are on a firm ground when we vote in favor of clause Tenth. Clause 45 is impractical, impossible and its application will lead to absurd results and injustice. Absurdity in construction of contracts must always be avoided. We have to consider the consequences which will follow the adoption of Clause 45. With regret we decline the invitation of Mr. Seth, learned counsel for NBCC, to hold our sittings in Iraq. The acceptance of Clause 45 will expose the Tribunal to ridicule. It leads to results which are contrary to the legitimate objects of arbitration."

5. However, as the petitioner feels aggrieved by the majority decision, present writ petition has been filed challenging the same.

6. The prayer made in the writ petition is for issuance of writ of certiorari or any other writ, direction or order to the learned Arbitrators not to proceed with the arbitration as they have no jurisdiction because the contract is subject to Iraqi Laws and there is no arbitration agreement between the parties.

7. It may be mentioned that detailed arguments were addressed by the learned counsel for the petitioner in support of the petition and referring to the various documents including various clauses of the main contract as well as sub-contract. It was sought to argue that there was no arbitration agreement between the parties and the existence of the Arbitral Tribunal was non est. In the process, learned counsel also attacked the reasoning adopted by the two Arbitrators by contending that same was fallacious.

8. On the other hand while rebutting the arguments of the petitioner on merits, learned counsel for the respondent also entered caveat by challenging the very maintainability of the present writ petition and submitting that such writ petition against the interim Award rendered by the Arbitrators and deciding certain issues including the issue about the existence of arbitration agreement and valid constitution of the Arbitral Tribunal could not have been challenged by way of present writ petition. It would, therefore, be in the fitness of things if the question about the maintainability of the petition is decided in the first instance. Before embarking on this issue, however, it may first be noted as to how the Arbitrators were appointed In the present case as that would have some bearing on the question of maintainability as well.

9. As noted above, vide communication dated 11.12.2000, respondent No. 1 approached the petitioner by stating that disputes had arisen and the Arbitral Tribunal was to be constituted. The relevant portion of this letter is to the following effect :

"Dispute having arisen between us are required to be settled through arbitration as provided in the contract. As per the agreement the Arbitral Tribunal is to consist of 3 members one each to be appointed by us and NBCC and third Arbitrator to be appointed by the said two Arbitrators. We hereby nominate Mr. Justice (Retired) P.K. Pali .......as our nominee Arbitrator and call upon you to nominate your nominee Arbitrator within the period of 30 days from today, failing which we shall be considered to proceed as per laws".

10. The petitioner on receipt of the aforesaid letter did not challenge the existence of the dispute. It also did not state at that time that there was no arbitration agreement between the parties and, therefore, there was no point of appointing any Arbitrators. On the contrary vide letter dated 11.01.2001 the petitioner nominated its Arbitrator. The contents of letter dated 11.01.2001 are significant and are therefore reproduced in entirety :

"No. Engg. (CC)/Arbtn./267/139 Date : 11th January, 2001 In the matter of arbitration between :

M/s. Antia Elcctricals Pvt. Ltd.

New Delhi                                                                 --Claimant
 

AND
 M/s. NBCC Limited
Finance Division,
Foreign Works, H.O.                                                       --Respondent
 

Regarding the disputes arisen out of the contract pertaining to electrification work related to construction of passenger Building, Engine Shed and Sick Line Buildings at Kubaisa, Iraq-Agreement dated 03.08.1985.
 

WHEREAS disputes have arisen between the above noted parties in respect of the above cited works and whereas the disputes arising between the parties under the aforesaid contract are required to be referred to the Arbitration Committee, comprising of two Arbitrators, to be appointed by both the parties one each, who in turn have to agree on one third Arbitrator to be the President of the Committee.

AND WHEREAS the claimant, vide their letter No. AEPL/182-A/00/6066 dated 11.12.2000 (copy enclosed), has intimated Shri Justice (Retd.) P.K. Palli C/o. Shri A.V. Palli, 48, Lawyer's Chambers, Supreme Court of India, Tilak Marg, New Delhi-110 001 (Residence : H-33, Sarita Vihar, New Delhi) as their nominee Arbitrator.

Therefore, I, A.K. Sarkar, Chairman-cum-Managing Director, National Buildings Construction Corporation Limited, New Delhi in pursuance of the same, do hereby nominate Shri V.K. Anand, Director of NBCC, as the respondents nominee Arbitrator for deciding and making the reasoned award regarding the claims/disputes of the claimant and also the counter claims of the respondent, if any.

(A.K. Sarkar)

Chairman-cum-Managing Director Shri V.K. Anand, Director (Projects) and Arbitrator, NBCC Limited,

NBCC Bhawan, Lodi Road, New Delhi.

Copy to :

1. M/s. Antia Electricals Pvt. Ltd.

802, Chiranjiv Tower, 43, Nehru Place, New Delhi 110 019. --By Regd. Post.

2. The Dy. General Manager (Finance), NBCC Limited, NBCC Bhawan, Lodi Road, New Delhi 110 003.

3. Shri Justice (Retd.) P.K. Palli, C/o. Shri A.V. Palli,

48, Lawyer's Chamber, Supreme Court of India, Tilak Marg, New Delhi 110 001.

Chairman-cum-Managing Director".

11. In the aforesaid letter the petitioner admitted that disputes had arisen between the parties and also that the said disputes are required to be referred to the Arbitration Committee. For this purpose it was also mentioned that both the parties have to appoint one Arbitrator each, who in turn have to agree on one third Arbitrator to be the President of the Committee. It was also noted that respondent No. 1 had nominated their Arbitrator and, therefore, the Chairman-cum-Managing Director was nominated petitioner's nominee Arbitrator. A copy of this letter was marked to the nominee Arbitrator Shri V.K. Anand and was also sent to the petitioner as well as respondent's nominee Arbitrator. This letter is signed by Chairman-cum-Managing Director of the petitioner.

12. The petitioner, conscious of the implication of this act on its part, attempted to cross this hurdle by projecting that the nomination of its Arbitrator was under mistake. In this behalf attempt was made on the part of the petitioner to point out that the work which is mentioned in the contract is the one pertaining to electrification work related to construction of 'Passenger Building, Engine Shed and Sick Line Buildings at Kubaisa, Iraq -Agreement dated 03.08.1985'. On this basis, the submission was that under mistaken belief the disputes related to this building contract at Kubaisa which were subject matter of agreement dated 03.08.1985 the petitioner appointed the Arbitrator whereas the dispute in the present case related to different contract altogether which was a Railway Project and the agreement was dated 28.09.1982. It was, according to the learned counsel for the petitioner, in act under mistake was not binding on the petitioner and the appointment of the Arbitrator by the petitioner under this mistaken belief was, therefore, clearly invalid, null and void and in support of this judgment of Supreme Court in the case of M. Dayanand Reddy v. A.P. Industrial Infrastructure Corporation Ltd..,

13. On the other hand it was submitted by learned counsel for the respondent No. 1 that the wrong mentioning of the agreement in the letter dated 11.01.2001 was of no consequence as the petitioner knew fully well that the wrong mentioning of the contract was rather a typographical mistake and otherwise the petitioner new fully well that the Arbitrator was to be appointed in the contract relating to Railway Project only. In order to substantiate this submission, learned counsel pointed out that further events which led to the appointment of the fresh Arbitrator would clearly show that the petitioner knew very well that the appointments were made in respect of contract relating to Railway Project only. He submitted that before letter dated 11.12.2000 was written by the respondent No, 1 to constitute Arbitral Tribunal, a meeting was held between the parties on 08.06.1999 and the modalities for settlement of the dues were worked out and duly recorded in the minutes of the meeting. Thus, the parties knew fully well, even before negotiation stage, that before disputes arose modalities of settlement of the dues had to be worked out. According to the respondent No. 1 as the petitioner did not adhere to the commitments made in the Memorandum of Meeting dated 08.06.1999, respondent No. 1 sent letter dated 11.12.2000 and in his letter the respondent No. 1 had categorically mentioned the contract in question as the subject of this letter reads :

"Sub. : Contract pertaining to Electrification work related to AI Qaim-Akashat Railway Project Iraq."

Learned counsel argued that after the appointment of two Arbitrators they appointed third Arbitrator with full knowledge of the present contract in mind. He further submitted that the Arbitral Tribunal considered this aspect of the matter and negated the same by holding as under :

"By exchange of letters the parties can agree to settle their disputes by arbitration. In our opinion, an agreement to arbitrate can be spelt out in this exchange of correspondence - the letter of 11.12.2000 of Antia and letter dated 11.01.2001 of NBCC exchanged between the parties. The letters are an authentic admission of the existence and validity of the arbitration agreement. The letter of CMD clearly shows that he had in his mind the Tenth Clause of the agreement because he had uses the expression 'Arbitration Committee' and the 'President of the Committee' used in that Clause. This letter is a complete answer to the argument of lack of jurisdiction now raised by NBCC. NBCC acts through its principal officer CMD, and CMD has conceded the claimant's demand for arbitration. Once conceded, NBCC cannot retract its words or disavow the letter."

14. Thus, it was argued that the very fact that the expressions "arbitration committee" and "President of the Committee" were used in the letter dated 11.01.2001 of the petitioner would show that the petitioner had this very contract in mind as these expressions are used in 10th Clause of the agreement and not in the agreement relating to Building at Kubaisa.

15. There appears to be force in the contention of learned counsel for respondent No. 1. I am not inclined to believe that the Arbitrator was appointed by mistake. It is clear that the petitioner, at the time of nominating its Arbitrator was conscious of the fact that it was the contract relating to Railway Project which was the subject matter of the dispute and wherein Arbitrator was to be appointed. Mistake, if at all is in mentioning the nomenclature of the contract and not in nominating the Arbitrator.

16. With this argument in mind, I now consider the question of maintainability of the writ petition. It may be mentioned at the outset that this aspect has been extensively considered by the Division Bench of this Court in the case of Bharat Heavy Electricals Ltd. v. C.N. Garg and Ors., 2001 II AD (Delhi) 879:2000(3) Arb. LR 674 (Del.)., with reference to the Scheme of Arbitration and Conciliation Act, 1996. In that case vires of Sections 13(3) and (4) of the Act were challenged. Provisions of Section 5 along with Sections 13 and 34 of the Act were noted while considering this question which are to the following effect:

"Section 5. Extent of judicial intervention. Notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part.

Section 13. Challenge procedure :

(1) Subject to Sub-section (4), the parties are free to agree on a procedure for challenging an Arbitrator.

(2) Failing any agreement referred to in Sub-section (1), a party who intends to challenge an Arbitrator shall, within fifteen days after becoming aware of the constitution of the arbitral tribunal or after becoming aware of any circumstances referred to in Sub-section (3) of Section 12, send a written statement of the reasons for the challenge to the arbitral tribunal.

(3) Unless the Arbitrator challenged under Sub-section (2) withdraws from his office or the other party agrees to the challenge, the arbitral tribunal shall decide on the challenge.

(4) If a challenge under any procedure agreed upon by the parties or under the procedure under Sub-section (2) is not successful, the arbitral tribunal shall continue the arbitral proceedings and make an arbitral award.

(5) Where an arbitral award is made under Sub-section (4), the party challenging the Arbitrator may make an application for setting aside such an arbitral award in accordance with Section 34.

(6) Where an arbitral award is set aside on an application made under Sub-section (5), the Court may decide as to whether the Arbitrator who is challenged is entitled to any fees,

(34) Application for setting aside arbitral award:

(1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with Sub-section (2) mid Sub-section (3).

(2) An arbitral award may be set aside by the Court only if:

  (a) xxxx          xxxx                  xxxx
 

 (b) the Court finds that--
  

(i) the subject matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or
 

(ii) the arbitral award is in conflict with the public policy of India.
 

Explanation--Without prejudice to the generality of Sub-clause (ii), it is hereby declared, for the avoidance of any doubt, that an award is in conflict with the public policy of India if the making of the award was induced or affected by fraud or corruption or was in violation of Section 75 or Section 81."

17. After discussing the purpose in enacting such law on the model law adopted by the United Nations Commission on International Trade Law (UNCITRAL) the Court observed that Section 5 was specifically introduced with the purpose of minimising the judicial interference in the progress and completion of arbitration proceedings. The Court thereafter remarked as under :

"Coming to Section 13 of the Act which deals with challenge to procedure including challenge to an Arbitrator, it is to be seen that Sub-section (1) envisages that parties may agree to a procedure for challenging an Arbitrator. According to Sub-section (2), failing an agreement between the parties, a party who intends to challenge an Arbitrator shall within 15 days after becoming aware of the constitution of the arbitral tribunal; send a written statement of the reasons for the challenge to the arbitral tribunal. Sub-section (2) makes a reference to Sub-section (3) of Section 12 of the Act which contains the grounds on which an arbitration can be challenged. The grounds include justifiable doubts about the independence or impartiality of the Arbitrator. Sub-section (3) of Section 13 contains the next step and provides that in such a situation either the Arbitrator withdraws himself or the other parry agrees to the challenge. Failing both, the arbitral tribunal is required to decide on the challenge. As per Subsection (4) if the challenge to the Arbitrator as above is not successful, the arbitral tribunal shall continue the arbitral proceedings and make an arbitral award. Sub-section (5) gives a right to the party challenging the Arbitrator to make an application for setting aside the arbitral award in accordance with Section 34.

The legislature was more than cautious while providing in explicit term that no judicial authority shall intervene except where so provided (Section 5). Thus clear mandate is to bar judicial interference except in the manner provided in the Act, Conversely if there is no provision to deal with a particular situation, Courts cannot assume jurisdiction and interfere. Comparing this legislation with the earlier legislation on the subject namely the Arbitration Act, 1940, the message is loud and clear. The legislature found mischief in various provisions contained in the Arbitration Act, 1940 which would enable a party to approach the Court time and again during the pendency of arbitration proceedings resulting into delays in the proceedings. Law makers wanted to do away with such provisions. So that arbitration proceedings are not unduly hampered. The very purpose of arbitration, which is an alternate dispute redressal forum, is defeated once the Courts interfere with these proceedings. The experience in the working of the old Arbitration Act showed that it was resulting in more delays than in civil suits. Therefore, not only such provisions were omitted in the new Act, provision in the form of Section 5 was inserted to convey the message. The scheme of the new Act is clear enough i.e. during the arbitration proceedings Court's interference is done away with. The new Act deals with the situation even when there is challenge to the constitution of the arbitral tribunal. It is left to the Arbitrator to decide the same in the first instance. If a challenge before the Arbitrator is not successful, the arbitral tribunal is permitted to continue the arbitral proceedings and make an arbitral award. Such a challenge to the constitution of the arbitral tribunal before the Court is then deferred and it could be only after the arbitral award is made that the party challenging the Arbitrator may make an application for setting aside an arbitral award and it can take the ground regarding the constitution of arbitral tribunal while challenging such an award. Thus, course of action to be chartered in such contingency is spelt out in the Act itself. Court interference on basis of petitions challenging arbitral tribunal during the pendency of the arbitration proceedings would be clearly against the very spirit with which the Arbitration and Conciliation Act, 1996 has been enacted. The mischief which existed in the earlier enactment and is sought to be removed by the present enactment cannot be allowed to be introduced by entertaining writ petitions in the absence of any provision in the new Act in this respect. A statue is an edict of the legislature and the conventional way of interpreting or construing a statute is to seek the 'intention' of its maker. A statute is to be construed according "to the intent of them that make it" and "the duty of judicature is to act upon the true intention of the legislature - the means or sentential legis".

18. Moreover vires of Section 13 of the Act have been upheld by Supreme Court as well as in the case of Babar Ali v. Union of India, , which judgment was relied upon by the Division Bench in the aforesaid case of Bharat Heavy Electricals Ltd. v. C.N. Garg and Ors. (supra).

19. We may at this stage take note of the judgments of various High Courts. In BASF Styrenics Pvt. Ltd. v. Offshore Industrial Construction Pvt. Ltd. 2002(2) RAJ 554:2002(3) Arb. LR 14 (Bom.), a Division Bench of Bombay High Court held that the Court could not interfere at an interim stage, more where the arbitral tribunal has ruled under Section 16 of the Act that it had jurisdiction to proceed with the reference. A Division Bench of Punjab & Haryana High Court in the case of Herike Rice Mills v. State of Punjab 1998(1) PLR 395=1999 (Suppl.) Arb. LR 342 (P&H), and Division Bench of the Andhra Pradesh High Court in the case of M. Mohan Reddy v. Union of India, 2000(4) RAJ 153:2000(1) Arb. LR 39 (AP). , has taken the same view. Without burdening this judgment with the extracts from such judgment, only reference to some other judgments of other High Courts as well as this Court would suffice the purpose :

(1) Union of India v. East Coast Boat Builders and Engineers Ltd. 1998(2) Arb. LR 702 (Del.) (Delhi High Court).

(2) Indian Oil Corporation Ltd. v. Kiran Construction Co. , 2002(3) Arb. LR 447 (Del.) (Delhi High Court).

(3) Assam Urban Water Supply and Sewerage Board v. Subhash Project and Marketing Ltd. and Ors. 2003(1) Arb. LR 216 (Gau.) (Gauhati High Court).

(4) Mangayarkarasi Apparels Pvt. Ltd. v. Sundaram Finance Ltd., 2002(3) Arb. LR 210 (Mad.) (Madras High Court).

20. Learned counsel for the petitioner, however, relied upon Single Bench judgment of Bombay High Court in the case of Anuptech Equipments Pvt. Ltd. v. Ganpati Co-op. Housing Society Ltd., Mumbai and Ors., , wherein Bombay High Court held that writ could be issued to a private Arbitral Tribunal in view of provisions of Arbitration and Conciliation Act, 1996. This view, however, has not been followed by Division Bench of Madras High Court and taking contrary view in the case of Mangayarkarasi Apparels Pvt. Ltd. v. Sundaram Finance Ltd. (supra), the Division Bench of Madras High Court differed with aforesaid view of Bombay High Court. The relevant discussion of the Madras High Court in the aforesaid judgment is in the following terms :

"As against the above pronouncement of the Apex Court, the learned counsel for the petitioner relied upon the judgment of the Bombay High Court in Anuptech Equipments Pvt. Ltd. v. Ganpati Co-op. Housing Society Ltd. (supra). Rebello, J. while taking note of the dichotomy maintained between the statutory arbitration and arbitration under bilateral agreement, held that the arbitral tribunal is not a tribunal within the meaning of Article 226 of the Constitution, nevertheless held a writ could be issued under Article 226 of the Constitution where no other remedy is available on an aggrieved person.

This Court is not persuaded to accept the said view taken by Rebello, J., and this Court respectfully disagree with the said view of the Bombay High Court in the light of the above cited pronouncements of the Apex Court. The Arbitrator appointed as a result of the arbitration clause agreed to between the independent parties, though referred to as arbitral tribunal they are not "other authorities", nor they are amenable to writ jurisdiction, nor this Court under Article 226/227 could exercise supervisory jurisdiction in respect of those Arbitrators, A private arbitration is governed by the terms of the agreement and in case of any grievance, the provisions of the Arbitration and Conciliation Act, 1996 could be invoked to redress the grievance in respect of the proceedings before the private Arbitrator or any proceedings which are not in exercise of statutory arbitration or statutory confirmation, but by virtue of private Arbitration, a contractual stipulation agreed to between the parties.

In the light of the above pronouncements of the Apex Court referred to already, this Court is of the considered view that the petitioner cannot maintain an action by invoking the powers of judicial review under Article 226 of Article 227 with respect to the order passed by the Arbitrator in a private arbitration or a non statutory arbitration arising out a commercial transaction. As the Arbitration and Conciliation Act, 1996 provides for remedies besides it also restricts invocation of the jurisdiction of the Courts at interlocutory stage, this Court taking note of the Legislative Policy adumbrated in the Arbitration and Conciliation Act, 1996 also will not be justified in exercising the powers of judicial review or superintendence under Article 226/227.

In the circumstances, following the Supreme Court Judgments in Engineering Mazdoor Sabha v. Hind Cycles (supra), Rohtas Industries v. Its Union (supra) and Associated Cement Companies Limited v. P.N. Sharma (supra), this Court holds that revision under Article 227 is not maintainable as against the orders of rejection of memo passed by Mr. Y.K. Rajagopal, Arbitrator appointed under the commercial transaction between the two private parties in terms of the bilateral hire purchase agreement entered between them."

21. I am in respectful agreement with the opinion expressed by the Madras High Court.

22. Learned counsel for the petitioner has also relied upon following judgments in support of his submission that present writ petition was maintainable :

(1) Whirlpool Corporation v. Registrar of Trade Marks, ".

(2) M.S. Grewal and Anr. v. Deep Chand Sood and Anr., .

23. However, these judgments do not deal with the issue involved here and are not applicable.

24. I am therefore of the considered opinion that writ petition is not maintainable and the remedy of the petitioner is to challenge the findings on the aforesaid issues and to file an application under Section 34 of the Act only after final Award is rendered by the Arbitral Tribunal. Since I am holding this view and inclined to dismiss the present writ petition as not maintainable, I have refrained myself from expressing any opinion on the merits of the decision taken by the Arbitral Tribunal on the aforesaid preliminary issues lest it may affect one or the other side ultimately. The only thing which is required to be stated at this stage is that the Arbitral Tribunal by majority, while deciding the aforesaid issues against the petitioner and in favor of respondent No. 1, has discussed these issues in detail giving their reasons in support of the findings. Their order run into 29 pages. On the other hand dissenting order has also given detailed order running into 31 pages. As already pointed out above before me as well both the parties had made their respective submissions extensively. Since it is not the stage when it is to be decided as to whether there is a valid arbitration agreement between the parties or not as that issue is to be decided only after the final Award is rendered by the Arbitral Tribunal, no opinion thereon on these issues is expressed either way.

25. This writ petition is accordingly devoid of any merit and is, therefore, dismissed.

26. The parties shall, however, bear their own costs.