HIGH COURT OF JAMMU & KASHMIR AND LADAKH AT JAMMU Case: Arb P No. 21/2025 Date of Pronouncement : 17.10.2025 Uploaded on: 28.10.2025 Indian Oil Corporation Ltd. …Petitioner(s)/Appellant(s) Through: Mr. D C Raina, Sr. Advocate with Mr. Anuj Dewan Raina, Advocate. V/s M/S Iqbal Motors Transport Services & anr. …. Respondent(s) Through: Mr. Pranav Kohli, Sr. Advocate with Mr. Farhan Mirza, Advocate. CORAM: HON’BLE THE CHIEF JUSTICE ORDER 17.10.2025 (ORAL) 01. The petitioner–Indian Oil Corporation Limited (IOCL), has invoked the jurisdiction of this Court under Section 11(6) of the Arbitration and Conciliation Act, 1996, (for short 8the Act’) seeking appointment of an independent Arbitrator. 02. The petitioner-Indian Oil Corporation Limited (for short 8IOCL’), a Government of India undertaking, engaged in manufacturing, refining, sale and distribution of petrol products, namely, petrol, diesel, lubricants etc., appointed the respondent as Handling Contractor for IOCL9s Packed Bitumen CFA at Bari Brahmana, Jammu, through tender reference No. RCC/NR/PSO/IB/PT-85/18-19. As a part of NIT the respondent deposited Bank guarantee No. 00051PBF1812003 dated 07.12.2018 for an amount of ₹ 292.5 lacs. Subsequently, the contract was renewed by a fresh Carrying and Forwarding Agent (CFA) Agreement dated 01.07.2022. Accordingly, the Bank Guarantee No. 0051PBG2207005 dated 22.07.2022 for an amount of ₹ 100.00 lac was also extended upto 07.12.2022. Sr. No. 07 -2- Pursuant to a joint inspection conducted on 25.11.2022 inside IOCL Jammu Bottling Plant (Bari Brahmana District Samba), a shortage of 7,446 barrels of bitumen and damage to 721 barrels were detected. The petitioner, in terms of Clause 5(a) and (b) of the Agreement, assessed a financial liability of approximately ₹8.44 crores upon the respondents and issued communications dated 28.11.2022 and 19.12.2022, directing the deposit of said payment within one week. The respondents failed to deposit the amount. And did not submit any response to the said communications, compelling the petitioner to address a communication dated 22.12.2022 to the J&K Bank requesting for encashment of the bank guarantee. Accordingly, on 28.02.2023, the J&K Bank credited the bank guarantee of ₹ 292.5 lacs in the bank account of the petitioner, leaving a substantial outstanding balance. In the meantime, the petitioner moved an application under Section 9 of the Act before the Additional District Judge (Commercial Court), Jammu, which stayed the operation of the petitioner9s communication dated 22.12.2022, vide its order dated 27.12.2022. The petitioner-IOCL assailed the order dated 27.12.2022before this Court in CM(M) No. 3/2023, which was disposed of on 20.01.2023, directing the petitioner to appear before the Additional District Judge (Commercial Court), Jammu, and expeditious disposal of the petition filed under Section 9 of the Act within a specified time. Meanwhile, the respondents withdrew their petition filed under Section 9 of the Act. And, as indicated earlier, the Bank Guarantee to the tune of ₹ 292.5 lacs was encashed by the petitioner leaving an outstanding amount of ₹ 5.51 crore to be paid by the respondents. Since the respondents did not move any petition under the Act for settling the disputes, the petitioner invoked arbitration Clause 12 of the CFA agreement vide notice dated 31.01.2023 which provides for redressal of all questions disputes and difference arising under or in relation to the Agreement by way of arbitration. Upon failure of the respondents to concur in the appointment, IOCL approached the High Court of Punjab and Haryana under Section 11(6), which, vide order dated 03.02.2025, held that this Court has no jurisdiction to entertain application under Section 11 of the Act and granted liberty to the petitioner to approach the Court of Competent Jurisdiction. Hence, the petition at hand. -3- 03. Pursuant to the notice issued by this Court, the respondents though caused appearance but no reply/ response has been filed on their behalf. 04. The existence of the arbitration clause, as aforesaid, and its invocation by the petitioner vide letter dated 31.01.2023 is not disputed. 05. Thus, in the given circumstances, learned counsel for the respondent, as always, fairly submits that let an arbitrator be appointed. But since the claim that is sought to be made by the petitioner is vehemently disputed/ denied, it is submitted that respondent be granted liberty to raise all possible pleas/ objections before the arbitral tribunal/ arbitrator in this regard. 06. Accordingly, in the wake of the position sketched out above and in terms of the statements made by the learned counsel for the parties, the petition is allowed. And, with consent of learned counsel for the parties, Ms. Nirmaljit Kaur, Former Judge of the High Court of Punjab and Haryana, residing at 188, Sector 11-A, Chandigarh, Mobile No.9610478000, is appointed as the sole arbitrator. Who shall proceed with the matter in accordance with the provisions of the Act. And to make an award within the time provided in the Act itself after charging the prescribed fee along with incidental expenses to be shared by the parties. The respondents are at liberty to raise all the objections as regards the subject matter before the learned Arbitrator. 07. Registry to send a copy of this order to the learned arbitrator. (ARUN PALLI) CHIEF JUSTICE Jammu 17.10.2025 Sunita/Secy. SUNITA KOUL 2025.10.28 15:02 I attest to the accuracy and integrity of this document