Arbitration agreement by contractual clause found where disputes were sent for final decision by a named authority.

A contractual clause may amount to an arbitration agreement if, on a fair reading, it shows an intention to refer present or future disputes to a named authority for a final and binding decision. The absence of the words "arbitration" or "arbitrator" is not decisive; the controlling test is the parties' intention gathered from the language of the clause. Because clause 13 referred disputes to the Superintending Engineer and made that decision final, it was treated as an arbitration agreement and the challenge to appointment of an arbitrator failed.

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Issues: Whether clause 13 of the contract constituted an arbitration agreement under Section 2(a) of the Arbitration Act, 1940.

Analysis: Clause 13 referred to disputes between the parties and provided that the decision of the Superintending Engineer of the Circle would be final. The decisive test was whether the parties intended to submit present or future disputes to arbitration, and such intention could be gathered from the language of the clause even without the words "arbitration" or "arbitrator". As the clause contemplated decision of disputes by the named authority and treated that decision as final, it necessarily implied a reference for adjudication of disputes in a judicial manner.

Conclusion: Clause 13 was held to be an arbitration agreement, and the application challenging appointment of an arbitrator failed.

Ratio Decidendi: A contractual clause constitutes an arbitration agreement if, on a fair reading, it shows an intention that disputes between the parties be referred for final and binding decision by a named authority, even if the words "arbitration" and "arbitrator" are not used.

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