United Telecoms Limited … Respondent WITH CIVIL APPEAL NO. 3973 OF 2019 (Arising out of Special Leave Petition (Civil) No.1644 of 2018) JUDGMENT R.F. NARIMAN, J. 1. Leave granted. 2. The present appeals raise an interesting question as to the interpretation of Section 12(5) of the Arbitration and Conciliation Act, 1996 [“Act”]. 3. The appellant, Bharat Broadband Network Ltd. [“BBNL”], had floated a tender dated 05.08.2013 inviting bids for a turnkey project for Signature Not Verified supply, installation, commissioning, and maintenance of GPON Digitally signed by R NATARAJAN Date: 2019.04.16 16:29:32 IST Reason: equipment and solar power equipment. The respondent was the 1 successful L1 bidder. The appellant issued an Advance Purchase Order [“APO”] dated 30.09.2014. Clause III.20.1 of the General (Commercial) Conditions of Contract [“GCC”] provides for arbitration. The said clause reads as under: “III.20 ARBITRATION III.20.1 In the event of any question, dispute or difference arising under the agreement or in connection therewith (except as to the matters, the decision to which is specifically provided under this agreement), the same shall be referred to the sole arbitration of the CMD, BBNL or in case his designation is changed or his office is abolished, then in such cases to the sole arbitration of the officer for the time being entrusted (whether in addition to his own duties or otherwise) with the functions of the CMD, BBNL or by whatever designation such an officer may be called (hereinafter referred to as the said officer), and if the CMD or the said officer is unable or willing to act as such, then to the sole arbitration of some other person appointed by the CMD or the said officer. The agreement to appoint an arbitrator will be in accordance with the Arbitration and Conciliation Act 1996. There will be no object to any such appointment on the ground that the arbitrator is a Government Servant or that he has to deal with the matter to which the agreement relates or that in the course of his duties as a Government Servant/PSU Employee he has expressed his views on all or any of the matters in dispute. The award of the arbitrator shall be final and binding on both the parties to the agreement. In the event of such an arbitrator to whom the matter is originally referred, being transferred or vacating his office or being unable to act for any reason whatsoever, the CMD, BBNL or the said officer shall appoint another person to act as an arbitrator in accordance with terms of the agreement and the person so appointed shall be entitled to proceed from the stage at which it was left out by his predecessors.” 2 4. Since disputes and differences arose between the parties, the respondent, by its letter dated 03.01.2017, invoked the aforesaid arbitration clause and called upon the appellant’s Chairman and Managing Director to appoint an independent and impartial arbitrator for adjudication of disputes which arose out of the aforesaid APO dated 30.09.2014. By a letter dated 17.01.2017, the Chairman and Managing Director of the appellant, in terms of the arbitration clause contained in the GCC, nominated one Shri K.H. Khan as sole arbitrator to adjudicate and determine disputes tha