S. Jagadeesan, J.@mdashThe plaintiff in C.S. No. 434 of 2001 is the appellant herein. The said suit was laid for recovery of certain amount. The first respondent herein, who is the first defendant in the said suit, took out two applications in Application Nos. 5660 and 5661 of 2001 to refer the dispute to the arbitrator in terms of the two purchase orders both dated 18.7.1996 and for stay of the suit respectively. The learned Judge, by an order dated 12.3.2002, allowed both the applications finding that the purchase orders referred to by the first respondent herein contemplate arbitration clause and, as such, the dispute has to be referred to the arbitrator. Aggrieved by the same, the present appeals have been filed.
2. Learned counsel for the appellant vehemently contended that Clause 25 of the purchase order does not contemplate the arbitration clause. It is only a reference to the Chairman and managing director of FACT regarding the factual dispute, and for a fact finding enquiry. Hence, the order of the learned Judge cannot be sustained.
3. We have carefully considered the above contention of the learned counsel for the appellant.
4. Clause 25 of the purchase order, which was extracted by the learned Judge in paragraph 16 is as follows :
"Clause 25.0.0 Work Order shall be subject to and shall in all respects be governed by Indian law. Any dispute or difference connected with or arising out of work order which cannot be settled by mutual agreement of the parties shall be referred to the Chairman and managing director of FACT and his decision will be binding on the parties. Any legal proceedings relating to this order shall be limited to the courts of law under the jurisdiction of the Kerala High Court at Ernakulam District, Kerala State, India."
5. A mere perusal of the above clause makes it clear that the parties have agreed that if there is any dispute or difference connected with or arising out of work order, which cannot be settled by agreement of the parties, then, the dispute shall be referred to the Chairman and managing director of FACT, whose decision will be binding on the parties. In our opinion, this is a specific agreement between the parties that if there is any dispute or difference of opinion arising out of the work order, and if the parties are unable to settle the dispute between themselves by mutual agreement, the dispute has to be referred to the Chairman and managing director of FACT. This reference does not mean that it is only a fact finding enquiry. In unequivocal terms, it is only to resolve the dispute between the parties. Otherwise, the decision of the Chairman and managing director cannot be binding on the parties. When the agreement stipulates the condition that the decision of the Chairman and managing director of FACT will be binding on the parties, it will definitely constitute the agreement between the parties to refer the dispute to the named arbitrator to take decision.
6. In support of his contention, learned counsel for the appellant placed reliance on the decision in the case of
7. We also perused the above judgment. Clauses 23 and 24 therein do not make any reference of mutual understanding between the parties to make a reference to the arbitrator. It merely states that the decision of the Executive Engineer shall be final without any reference to the parties intention for arbitration: Hence, we are of the view that the principles laid down in the said judgment do not help the appellant On the interpretation of the relevant clause in the case on hand, as already held we are of the view that the parties have agreed for the arbitration and; the clause specifically constitutes the reference for arbitration; Hence, we do not find any reason to differ from the order of the learned Judge:
8. Accordingly, the original side appeals are dismissed, Consequently, the above CMPs are also dismissed.
9. The learned Judge granted time for die parties to make the reference within six weeks from the date of the order. Since the time granted by the learned Judge had already expired, the time granted: by the learned Judge in paragraph 22 of the order is extended by four weeks from today.
