Upon failure of contractual dispute resolution, the Court appointed a sole arbitrator under Section 11(6).

S. Kumar’s Associates, a sole proprietorship concern, was awarded a contract by South Eastern Coalfields Limited (SECL) for excavation, transportation and allied overburden-removal work at Gare Palma IV/2&3 OCP, Raigarh Area.

The parties executed an agreement dated 23 December 2018 containing a two-stage in-house dispute-resolution mechanism under Clause 13 and an arbitration clause under Clause 13A.

After extensions of time, the applicant completed the work on 20 March 2020, and SECL issued a Completion Certificate on 24 April 2020.

The applicant alleged that SECL failed to settle the final bill and refund the security amounts, and subsequently imposed penalties and recoveries totalling Rs. 58,71,418.81, including deductions towards diesel de-escalation and other alleged dues.

The applicant invoked the first and second stages of the contractual dispute-resolution mechanism by notices dated 16 July 2025 and 29 October 2025, but the disputes remained unresolved.

Thereafter, the applicant invoked arbitration under Section 21 of the Arbitration and Conciliation Act, 1996, by notice dated 2 March 2026 and nominated a former High Court Judge as sole arbitrator.

SECL neither accepted the nomination nor proposed an alternative arbitrator.

Section 7 of the Arbitration and Conciliation Act, 1996 requires an arbitration agreement in writing; Clause 13A of the agreement constituted such an arbitration agreement.

Section 21 governs commencement of arbitral proceedings upon receipt of a request for reference to arbitration.

Section 11(6) empowers the Court to appoint an arbitrator where the agreed appointment procedure has failed, including where a party fails to act as required under that procedure.

The contractual mechanism under Clauses 13 and 13A required exhaustion of the in-house dispute-resolution process before arbitration could be invoked.

At the appointment stage, the Court was concerned with constituting the arbitral tribunal and did not adjudicate the merits of the parties’ claims, recoveries or counterclaims.

The Court found that the agreement contained a valid arbitration clause and that the applicant had invoked and exhausted both stages of the contractual in-house mechanism.

The applicant thereafter issued a valid notice under Section 21 and called upon SECL to concur in the appointment of an arbitrator.

SECL failed to respond or nominate an alternative, thereby giving rise to the occasion for action under Section 11(6).

The subsequent “Speaking Order” issued by SECL did not extinguish the disputes because it was issued by an officer of a party to the dispute and merely confirmed SECL’s own position; the underlying claims and recoveries remained matters for arbitral adjudication.

Since both parties ultimately agreed that a retired District Judge could act as arbitrator and specifically proposed Mr. Ashok Kumar Panda, the Court accepted that consensus and appointed him as sole arbitrator.

Mr. Ashok Kumar Panda, retired District Judge, was appointed as the sole arbitrator to adjudicate the disputes between the parties.

The Registry was directed to communicate the order to the arbitrator, and his remuneration was to be settled by mutual consent of the parties.

The Court did not decide the merits of the applicant’s monetary claims or SECL’s alleged recoveries, leaving those issues for determination by the arbitral tribunal.