PNP 1 ARP54-25.2.sxw IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION ARBITRATION PETITION NO.54 OF 2010 M/s. Hawk Eye Securities and Facilities Ltd. ..Petitioner. versus Employees State Insurance Corporation ..Respondent. ..... Mr. Vishal Kanade i/b Mr. Sanjay S. Gawde for the Petitioner. Mr. T.R. Yadav i/b Mr. P.M. Palshikar for the Respondent. ...... CORAM : DR.D.Y.CHANDRACHUD, J. 25 February 2011. P.C. : 1. In pursuance of a tender notice dated 21 December 2009, a contract was awarded to the Petitioner for providing security to the Employees State Insurance Corporation for its offices at Bibvewadi Pune, Nasik, Solapur and Kolhapur. The Respondent issued a notice to show cause on 14 May 2010 calling upon the Petitioner to explain why the contract should not be terminated. The Petitioner by a letter dated 9 June 2010 stated that the contract would accordingly be discontinued with effect from 15 June 2010. The Petitioner invoked arbitration by a letter dated 8 September 2010 and raised certain disputes and claims inter alia in regard to payments for overtime work. The Respondent by its reply dated 20 September 2010 did not dispute the existence of the arbitration agreement, but merely stated as follows : PNP 2 ARP54-25.2.sxw Therefore your contention for appointment of an arbitrator is “ uncalled for and misleading in as much as the cause of a dispute is unclear for want of statutory documents, as stated above from you. Further an Arbitrator can resolve the issues while not compromising with the sanctity of the provisions of the law, which has been grossly violated by you at all the stages. It is therefore concluded that in the event of non production of the said documents, initiating of legal action against you, can become inevitable.” 2. The arbitration agreement is contained in the tender document. Clause 9 of the general terms and conditions of contract provides that all questions, disputes or differences arising under or out of or in connection with the contract shall be settled by a sole arbitration of the Additional Commissioner, ESI Corporation or a person appointed by him on his behalf. 3. The existence of the arbitration clause is not in dispute. The arbitration agreement has been duly invoked. The defence made out by the Respondent in its letter dated 20 September 2010 goes to the merits of the claim which is a matter for determination by the arbitrator. 4. In view of the judgments of the Supreme Court in Datar Switchgears Ltd. v. Tata Finance Limited1 and Punj Lloyd Ltd. v. Petronet MHB Ltd.2, it is a settled principle of law that once a petition under Section 11(6) of the Arbitration and Conciliation Act 1996 is filed in Court, the appointing authority loses the right to make an appointment. Accordingly, in exercise of the powers 1 (2000) 8 SCC 151. 2 (2006) 2 SCC 638. PNP 3 ARP54-25.2.sxw conferred by Section 11(6) an arbitrator would have to be appointed. The Petition is accordingly disposed of by appointing Shri Justice S.R. Sathe, Former Judge of this Court as sole arbitrator under the Arbitration and Conciliation Act 1996. The Registrar (Judicial) is directed to forthwith communicate a copy of this order to the Learned Arbitrator together with a memorandum containing the address of the parties. (Dr. D.Y. Chandrachud, J.)