Arbitration clause applied where a live dispute on material quality and bank guarantee invocation survived despite earlier Section 9 refusal.

An arbitration clause is attracted where the contract provides for reference of unresolved disputes and the correspondence shows a live dispute on the quality of supplied material and invocation of the bank guarantee. Earlier refusal of interim relief under Section 9 does not by itself mean that no arbitrable dispute survives. On the facts, the unresolved contractual differences were sufficient to require appointment of an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996.

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Issues: Whether an arbitrator should be appointed under Section 11(6) of the Arbitration and Conciliation Act, 1996, when the contract contains an arbitration clause and the parties are in dispute over the quality of supplied material and invocation of the bank guarantee.

Analysis: The contract contained an arbitration clause providing for reference of unresolved disputes to arbitration. The correspondence between the parties and their meetings showed that differences had arisen on the quality of the material supplied, and those differences were not resolved. The mere fact that interim relief under Section 9 had earlier been refused did not establish that no dispute survived for arbitration. The existence of a live contractual dispute was sufficient to attract the arbitration clause.

Conclusion: An arbitrator was required to be appointed under Section 11(6) of the Arbitration and Conciliation Act, 1996, and the petition was allowed.

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