Arbitration agreement requires clear intent to refer disputes for binding adjudication; a rate-fixation clause is not enough.

A contractual clause is treated as an arbitration agreement only where it clearly shows an intention to refer present or future disputes to a private tribunal for binding adjudication. A clause that merely gives an authority final power to fix rates for non-tendered additional work, or resolves a narrow administrative or valuation question, does not satisfy that requirement. The proviso to clause 10 was confined to rate determination for a limited excepted matter, did not require adjudication of disputes in an arbitral capacity, and did not authorise appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996. The prior deletion of an express arbitration clause also supported that construction.

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Issues: Whether the last sentence of the proviso to clause 10 of the conditions of contract constituted an arbitration agreement so as to sustain appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996.

Analysis: An arbitration agreement must disclose an intention to refer present or future disputes to a private tribunal for judicial determination, and the decision of that tribunal must be intended to bind the parties. A clause which merely empowers an authority to fix rates, or makes its decision final on a limited administrative or valuation aspect, without referring disputes to arbitration or requiring adjudication in a judicial manner, does not satisfy those essentials. The proviso to clause 10 related only to determination of rates for non-tendered additional work and operated in a narrow sphere to avoid disputes on that limited question. It did not provide for reference of disputes to arbitration, did not require the Superintending Engineer to act as an arbitrator, and did not evidence any intention to create a binding arbitral mechanism. The earlier deletion of the express arbitration clause from the standard contract further confirmed that clause 10 could not be read as an arbitration agreement. Such a clause was, at best, an excepted matter outside arbitration.

Conclusion: The clause was not an arbitration agreement and could not support appointment of an arbitrator under Section 11.

Ratio Decidendi: A contractual clause is an arbitration agreement only if it evinces a clear intention to refer disputes to a private tribunal for binding adjudication; a finality clause limited to administrative fixation of rates or similar excepted matters is not arbitration.

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