Arbitration agreement requires an impartial private tribunal; a clause sending disputes to parties' own signatories is not arbitration.

Clause 16 was not a valid arbitration agreement because it did not show a clear intention to refer disputes to a private, impartial and independent tribunal whose decision would be binding. Although the clause required mutual settlement and then referral to the parties' own Managing Director and Designated Partner, those signatories were directly involved in the contract and dispute, so they could not function as an impartial arbitral forum. The court treated the clause as an in-house contractual dispute-resolution mechanism rather than arbitration, and the request for appointment of a sole arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996 was rejected.

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Issues: Whether Clause 16 of the contract constituted a valid arbitration agreement and whether a sole arbitrator could be appointed under Section 11 of the Arbitration and Conciliation Act, 1996.

Analysis: Clause 16 did not use the word arbitration, but the decisive inquiry was whether the clause disclosed a clear intention to submit disputes to a private tribunal empowered to adjudicate impartially and whose decision would be binding. The clause required the parties to resolve disputes mutually and, failing that, referred the matter to the Managing Director of one party and the Designated Partner of the other party. Since those persons had signed the contract on behalf of the contracting entities and were directly involved in the transaction and the dispute, they could not serve as an impartial or independent tribunal. The arrangement was treated as an internal dispute-resolution mechanism rather than a true arbitration agreement. In view of the lack of the essential attributes of arbitration, the request for appointment of an arbitrator could not be sustained.

Conclusion: Clause 16 was not a valid arbitration agreement, and the prayer for appointment of an arbitrator was rejected.

Final Conclusion: The dispute resolution clause was held to be an in-house contractual mechanism without the legal character of arbitration, so the court declined to constitute an arbitral tribunal.

Ratio Decidendi: A contractual clause constitutes an arbitration agreement only if it evinces a clear and binding intention to refer disputes to a private, impartial and independent tribunal whose decision is enforceable; a clause directing resolution by the parties' own signatory representatives does not satisfy that standard.

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