TaxTMI 
TaxTMI 
TaxTMI 
1993 (3) TMI 349
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....and to appoint the sole arbitrator in his place. The learned Judge, City Civil Court, inter alia came to the finding that it was a fit case where the sole arbitrator should be appointed for adjudicating the disputes and differences between the parties arising out of the agreement in question and the learned judge appointed a retired District Judge as the sole arbitrator for adjudicating the disputes and differences arising out of the arbitration agreement for entering upon the reference and sign and pass the award according to law. The case of the appellant in short is that the appellant is a Class I Contractor. He entered into an agreement with the respondent No.1, A.P. Industrial Infrastructure Corporation Ltd., for the construction of main sewer line from Point (H) near C.C. Building IDA Nacharam to the disposal units of Nallacheru (near Uppal) on December 11, 1986. Pursuant to such agreement, the appellant completed the work in question. Since certain disputes and differences had arisen between the appellant and the said Corporation during the execution and completion of the contract, the appellant by notice dated June 27, 1988 requested the. Chairman of the Corporation to re....
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....l Judge, City Civil Court, Hyderabad, the proceeding being O.P. No.132 of 1989 arose. The respondent No.1 opposed the said application and filed counter to the said application inter alia contending therein that the appellant entered into the agreement dated December 11, 1986 with the A.P. Industrial Infrastructure Corporation for the said work and the time stipulated for the construction of the work was six months from the date of handing over of the site. The appellant, however, completed only a part of the work although the, site was handed over to him. But before the completion to the entire work, the accounts were settled between the parties and the final bill was also paid to the appellant and the balance of work was got completed through other agencies. It was further contended that the original agreement signed between the parties did not provide for any arbitration clause and such fact was made known to the appellant. In view of the aforesaid position,, the question of referring the matter to the arbitration or to the named arbitrator or to any other arbitrator did not arise. The learned Judge inter alia came to the finding that the original agreement dated December 11, ....
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....on as contained in Ex.A-3 was absent in the original agreement. The learned Judge was of the view that only the terms contained in original agreement since signed by the parties and not the terms contained in the copy forwarded to the applicant were binding between the parties. The learned Judge was also of the view. that as in the original agreement, (Ex.B-1) signed by both the parties, there was no arbitration clause at all, it was not necessary to look into the other material or to consider other circumstances for the purpose of finding that the parties had also agreed for arbitration. The contention on behalf of the applicant that in the absence of any specific clause for reference of disputes to arbitration in the original agreement (Ex.B-1) the existence of such a clause should be assumed because the government contractors arc governed by the standard specifications, was not accepted by the High Court. In that view of the matter, the revision application was allowed by the High Court inter alia holding that the impugned order appointing an arbitrator was erroneous and not sustainable in law. As aforesaid, such order of the Andhra Pradesh High Court is impugned in the instant ....
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....l, be specifically enforced and breach of such terms of contract results only in damages. The arbitration clause however can be specifically enforced by the machinery of the Arbitration Act. The appropriate remedy for breach of an agreement to arbitrate is enforcement of the agreement to arbitrate and not to damage arising out of such breach. Moreover, there is a further significant difference between an ordinary agreement and an arbitration agreement. In An arbitration agreement, the Courts have discretionary power of dispen- sation of a valid arbitration agreement but the Courts have no such power of dispensation of other terms of contract entered between the parties. This very distinctive feature of an agreement for arbitration has been highlighted in the decision in Heyman v. Damins Ltd., 1942 AC 356. It has been held in North Westen Rubber Company, 1908 2 KB 907 (over-ruled in (1961 (1) AC 1314) on other points), that an arbitration agreement in no way classifies the right of the parties under the Contract but it relates wholly to the mode of determining the rights. In the backdrop of such position in law relating to an agreement for arbitration, it is to be decided whether th....
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....greement was not scored out in the copy of the agreement since forwarded to the applicant. The attention of the appellant was drawn to such mistake by the respondents before initiation of the proceedings before the City Civil Court. It also appears that on April 9, 1984, which is long before the agreement dated December 11, 1986, the respondent No.1, Corporation, came to the decision that arbitration was not really necessary as the aggrieved party to the agreement could always seek redress in a court of law. It was, therefore, decided that the arbitration clause in the standard specifications should be deleted altogether and the agreement was to be finalised in respect of engineering work without any provision for arbitration. It was also indicated that the instruction for deleting the arbitration clause should be followed with immediate effect. If inspite of such policy decision, the original agreement entered between the parties had contained the arbitration clause there is no manner of doubt that the parties to the agreement would have been bound by such arbitration agreement. Admittedly, in the instant case, in the original agreement signed between the parties, there is no clau....