THE HON'BLE SRI JUSTICE B.SESHASAYANA REDDY Arbitration Application No.20 of 2011 18th August, 2011 Between :- M/S. IL & FG Engineering and Construction Company Ltd., Begumpet, Hyderabad, Rep. By its Authorized Signatory .. Applicant And M/s.Indian Oil Corporation Ltd., Hyderabad, Rep.by its Chief Consumer Sales Manager .. Respondent THE HON'BLE SRI JUSTICE B.SESHASAYANA REDDY Arbitration Application No.20 of 2011 ORDER:- This application has been taken out by M/s. IL & FS Engineering and Construction Company Limited under sub-section (6) of Section 11 of the Arbitration and Conciliation Act, 1996, seeking appointment of an Arbitrator for resolution of the disputes between the parties relatable to agreement dated 10-4-2006. The application averments in brief are:- The applicant is a Company registered under the Companies Act, 1956. The main objects of the applicant Company are to carry on all types of civil contracts, civil constructions, projects construction and other engineering works etc. Originally, Maytas Infra Pvt.Ltd., was a Company incorporated under the provisions of the Companies Act, 1956. Thereafter, the said Company was renamed as the applicant herein on receipt of Certificate of Incorporation dated 7-1-2011 issued by the Registrar of Companies, Andhra Pradesh, Ministry of Corporate Affairs, Government of India. The respondent is a Company incorporated under the Companies Act, 1956 having its registered office at G-9, Ali Yavar Jung Marg, Bandra (East), Mumbai. The applicant has entered into an agreement with the respondent on 10-4- 2006 to procure 100% High Speed Diesel (for short HSD) for its equipment and machinery for executing various projects. The validity of the agreement is for a period of three years. The respondent agreed to supply approximately 38080 KL of HSD over a period of 36 months. As per Article 14 of the said agreement, in the event of any dispute between the parties relating to the contract, they undertake to resolve the difference by mutual negotiations. If such disputes or differences could not be resolved within one month from the date of the dispute, the same shall be referred to the Sole Arbitrator to be appointed by the Managing Director of the applicant and by the Director (Marketing) of the respondent by mutual consent. In case of there being no consensus with regard to the appointment of sole arbitrator as per Article 14, each of the parties will nominate the Arbitrators of their choice and the two arbitrators shall chose a third arbitrator. According to the applicant, the respondent raised Debit Notes to a sum of Rs.13,08,649/- without delivering the HSD. Thereby the disputes arose between the parties. The applicant issued a notice dated 17-6- 2010 invoking Article 14 of the Agreement dt.10-4-2006 and called upon the respondent to follow the procedure as contemplated therein. The respondent stated in the reply notice that in the absence of any agreement between the respondent and M/s.MAYTAS-NCC JV., arbitration clause cannot be invoked. The applicant issued another notice dated 22-11-2010 to the respondent reiterating its stand and relied upon on Article 14 of the agreement and nominating Sri Ram Pratap Singh, a retired District Judge, as its nominee arbitrator and called upon the respondent to nominate its arbitrator within a period of 30 days from the date of receipt of that notice. The respondent issued a reply dated 16-12-2010 reiterating the stand taken in the letter dated 20-9-2010. Hence, this application under sub-section (6) of Section 11 of the Arbitration and Conciliation Act, 1996, seeking appointment of Arbitrator. Notice to the respondent came to be ordered on 18-3-2011. The respondent entered appearance and filed counter. Though the respondent filed counter disputing the claim of the applicant, no denial has been made with regard to the existence of arbitration clause. Heard learned Counsel appearing for the parties. The dispute is with regard to the Debit Note raised by the respondent to a sum of Rs.13,08,649/-. It is the case of the applicant that the HSD load relatable to the Debit Note has not been received; whereas it is the case of the respondent that HSD load is supplied to the applicant Company. The said dispute is required to be resolved by taking recourse to the provisions of Arbitration and Conciliation Act. The applicant adopted the procedure contemplated in the contract and nominated Sri Ram Pratap Singh, a retired District Judge, as its Arbitrator. However, the respondent disputed the very claim of the applicant. In that view of the matter, I find that the applicant has made out a valid ground for appointment of anArbitrator. Accordingly, the arbitration application is allowed. No order as to costs. Sri VLNGK Murthy, a practicing Advocate of this Court, is appointed as sole Arbitrator to resolve the dispute between the parties relatable to the agreement dated 10-4-2006. He is at liberty to fix his own fee. _________________________ B.Seshasayana Reddy, J 16th August, 2011 smr