Finality clause in a contract is not arbitration unless it shows a quasi-judicial intent to decide disputes fairly.

A contractual clause making the decision of a named engineer or managing director final and binding on specified matters is not, by itself, an arbitration agreement. The Court held that such clauses reflected expert or administrative determination, not a reference of disputes to a tribunal required to hear both sides and adjudicate in a quasi-judicial manner. Because the clauses did not evince an intention to submit disputes to arbitration, no independent arbitrator could be appointed under Section 8 of the Indian Arbitration Act, 1940, and the application was misconceived.

---

---

Issues: Whether clauses conferring finality on the Executive Engineer and the Managing Director amounted to an arbitration agreement, and whether an independent arbitrator could be appointed under Section 8 of the Indian Arbitration Act, 1940.

Analysis: Clauses 23 and 24 made the decisions of the named officers final and binding on specified claims and matters, but they did not show an intention to refer disputes for decision in an impartial and judicial manner. The clauses did not require the Managing Director to hear both sides, record evidence, or adjudicate formulated disputes as an arbitrator would. The arrangement was one of expert or administrative determination, intended to avoid disputes rather than to submit them to arbitration. A clause of similar wording had previously been held not to be an arbitration clause, and the same distinction between an expert/certifier and an arbitrator governed the present case.

Conclusion: The contract did not contain an arbitration agreement, and the application under Section 8 was misconceived.

Ratio Decidendi: A contractual clause making the decision of a named engineer or managing director final and binding on contractual matters does not amount to an arbitration agreement unless it evinces an intention to refer disputes to a tribunal acting in a quasi-judicial manner with an obligation of fairness and adjudication.

---