Final bill waiver and contract-based arbitrator appointment requirements barred arbitration where no live dispute survived.

Acceptance of the final bill without protest or reservation, coupled with a contractual bar on further claims, was treated as waiver and extinguishment of any later demand; no live dispute survived to justify arbitration. Appointment of an arbitrator also had to conform to the parties' clause requiring a serving engineering officer with the prescribed qualification, and a contrary appointment was not justified. The Section 11 power could be exercised only where an existing dispute was shown and the contractual mechanism for appointment was followed, so the order appointing a sole arbitrator was unsustainable.

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Issues: (i) Whether any live dispute survived after the contractor signed the final bill without protest or reservation so as to justify reference to arbitration. (ii) Whether an arbitrator could be appointed contrary to the arbitration clause requiring a serving engineer officer having the prescribed qualification.

Issue (i): Whether any live dispute survived after the contractor signed the final bill without protest or reservation so as to justify reference to arbitration.

Analysis: The final bill was accepted and signed without protest or reservation, and the contractual condition provided that no further claim could be made after submission of the final bill, with such claims treated as waived and extinguished. On those facts, the subsequent claim raised after about two years did not disclose a subsisting dispute capable of being referred to arbitration.

Conclusion: No live dispute survived, and the claim was treated as waived and extinguished.

Issue (ii): Whether an arbitrator could be appointed contrary to the arbitration clause requiring a serving engineer officer having the prescribed qualification.

Analysis: The arbitration clause specifically required reference to the sole arbitration of a serving officer having degree in Engineering or equivalent. Appointment under Section 11 of the Arbitration and Conciliation Act, 1996 must be made in accordance with the agreement and only where an existing dispute is shown. In the absence of a live dispute, and in the face of the contractual mandate as to the category of arbitrator, appointment of a retired High Court Judge was not justified.

Conclusion: The arbitrator could not validly be appointed in the manner directed by the High Court.

Final Conclusion: The order appointing the sole arbitrator was unsustainable because no arbitrable dispute survived and the contractual mechanism for arbitration was not followed.

Ratio Decidendi: A Section 11 reference can be made only where a live dispute exists, and the arbitrator must be appointed in accordance with the parties' agreement; acceptance of the final bill without protest may amount to waiver and extinguishment of further claims.

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