Whether Chief Engineer can work as Arbitrator?

P. Dasaratharama Reddy Complex v. Govt. of Karnataka, (2014) 2 SCC 201
Arbitration
Arbitration and Conciliation Act, 1996
Ss. 7, 11(6), 11(8) and 2(b) - Arbitration agreement - Essence of - Adjudication of disputes by independent/neutral
person/body - Officer or authority of one of the parties overseeing/having jurisdiction over subject-matter of the contract
cannot be an arbitrator nor can a clause empowering such person to resolve disputes be an arbitration clause - Clause
empowering Chief Engineer/Engineer/Board of Directors of one of the parties (respondent government company) who
had jurisdiction/was responsible for subject-matter of contract, to settle disputes between parties at the first instance and
making it final and binding on them, held, cannot be an arbitration clause - Cl. 29 of agreement providing for referring of
disputes as to contract designs, drawings, specifications, estimates, instructions or orders, termination or abandonment,
in the first place, to Chief Engineer who had jurisdiction over the work - Held, said clause is not arbitration clause since
Chief Engineer not being an independent authority, cannot be invested with power to adjudicate upon rights of parties to
dispute or difference - Further, he is not required to hear parties or to take evidence, oral or documentary before taking
any decision - Expression in the first place in said clause suggests non-adjudicatory decision of Chief Engineer which is
subject to right of aggrieved party to seek remedy in a court of law - Thus, held, Cl. 29 and similar clauses cannot be
treated as arbitration clauses, (2014) 2 SCC 201-

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