Law: Arbitration Act, 1940

Section: 8,9,20

  Arbitration Act, 1940 (X of 1940)------Ss. 8, 9 & 20--Two separate agreement for construction of floors--Arbitration clause--Withholding of payments--Application for appointment of arbitrator--Dismissed--Appeal--Allowed--Matter was remanded--Element of overlapping--Maintainability of application--Premature application--Challenge to--There were two separate contracts with independent arbitration clauses--Does the fact that both contracts relate to the same project (albeit with different scope of work and pricing), provide sufficient grounds for those to be treated as ‘one indivisible whole’--Where disputes, though arising partially under ancillary agreement were integrally connected with main agreement--A single application, can be filed for disputes under two separate agreements, provided same were interdependent and constitute ‘indivisible whole contract’ and single arbitrator could be appointed--There was no apparent hierarchy to two agreements in question--In-fact, in subsequent agreement, there was no reference to prior agreement--The claims stated in paragraph 9 of application under Sections 8 & 20 of Act, clearly relate to prior agreement since same pre-date subsequent agreement--There was an element of overlapping in disputes between parties, it cannot be sole ground for Court to direct parties to go for a composite arbitration where there are two agreements with two separate arbitration clauses--The issue of certain payments withheld had triggered filing of application under Sections 8 & 20 of Act for reference to arbitration--The separate references run risk as to one set of payments as adjustment and withholding of payment in other--The respondent complied with only first step of appointment procedure provided in arbitration clause i.e., attempt for appointment of a sole arbitrator, however respondent, thereafter did not proceed with second step of appointment procedure wherein it was to appoint its own arbitrator--The respondent’s application under Sections 8 & 20 was not maintainable as it covered two separate agreements and arbitration mechanism, in both agreements, was not exhausted, by respondent, rendering application…