- 1 - NC: 2025:KHC:8820 CMP No. 19 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28TH DAY OF FEBRUARY, 2025 BEFORE THE HON'BLE MR JUSTICE SACHIN SHANKAR MAGADUM CIVIL MISC. PETITION NO. 19 OF 2024 BETWEEN: M/S. GITA REFACTORIES PRIVATE LIMITED, A COMPANY INCORPORATED AS PER THE PROVISIONS OF THE COMPANIES ACT, 1956 AND EXISTING UNDER THE PROVISIONS OF THE COMPANIES ACT 2013, HAVING ITS CORPORATE OFFICE AT NO.105, RR TAKT, BHOOPASANDRA MAIN ROAD, SANJAY NAGAR, BENGALURU - 560 094. REPRESENTED BY ITS VICE PRESIDENT, MR. NARYANDAS JAJU. …PETITIONER (BY SRI. ABHILASH RAJU.,ADVOCATE) AND: RAIL WHEEL FACTORY, A COMPANY INCORPORATED AS PER THE PROVISIONS OF THE COMPANIES ACT, 1956, AND EXISTING UNDER THE PROVISIONS OF THE COMPANIES ACT, 2013, YELAHANKA, BENGALURU - 560 064. REPRESENTED BY ITS THE DEPUTY CHIEF MATERIALS MANAGER GENERAL STORES (DEPOT). …RESPONDENT (BY SRI. ADITYA SINGH, CGC) Digitally signed by NAGARAJA B M Location: HIGH COURT OF KARNATKA - 2 - NC: 2025:KHC:8820 CMP No. 19 of 2024 THIS CIVIL MISC. PETITION IS FILED UNDER SECTION 11(6) OF THE ARBITRATION AND CONCILIATION ACT, 1996 CODE READ WITH THE ARBITRATION AND CONCILIATION (AMENDMENT) ACT, 2015, PRAYING TO APPOINT A SOLE ARBITRATOR IN TERMS OF THE PURCHASE ORDER (ANNEXURE B), CLAUSE 2900 OF THE CONDITIONS OF THE CONTRACT (ANNEXURE - J) TO RESOLVE THE DISPUTES THAT HAVE ARISEN AND ALSO TO PASS SUCH OTHER DIRECTIONS OR ORDERS AS THIS HONBLE COURT MAY DEEM FIT AND NECESSARY IN THE CIRCUMSTANCES OF THE CASE AND IN THE INTEREST OF JUSTICE. THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE SACHIN SHANKAR MAGADUM ORAL ORDER This Civil Miscellaneous Petition is filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (for short ‘the Act’) seeking to appoint sole Arbitrator to resolve the dispute between the petitioner and the respondent in terms of purchase order dated 24.03.2022 evidenced at Annexure-B and the Conditions of the Contract as per Annexure-J, which provides Arbitration Clause at Clause 2900. - 3 - NC: 2025:KHC:8820 CMP No. 19 of 2024 2. On issuance of notice to the respondent, the respondent has entered appearance through his counsel and filed statement of objection. 3. The petitioner asserts that they were declared the successful bidder in the tender process conducted by the respondent. Consequently, the respondent issued a Purchase Order dated 24.03.2022 for a total value of 8,29,333.50/-. The petitioner contends that despite the respondent conducting an inspection at the petitioner's factory and being satisfied with the quality of the bricks supplied, payment has been withheld. The respondent justifies the non-payment by alleging that during the trial, material from Ladle No. 22 was found to be unsatisfactory. In response, the petitioner issued a legal notice dated 31.07.2023, demanding payment for the supplied material and invoked the Arbitration Clause as per the terms of the Purchase Order. 4. The respondent, through its reply notice dated 22.09.2023, contended that the petition was not - 4 - NC: 2025:KHC:8820 CMP No. 19 of 2024 maintainable unless the petitioner expressly waived the applicability of Section 12(5) of the Arbitration and Conciliation Act, 1996. 5. Upon reviewing the materials placed on record and the conditions stipulated in the Purchase Order, this Court finds the respondent’s contention regarding the waiver of Section 12(5) of the Act to be misconceived. Following the 2015 Amendment, an arbitration agreement cannot compel a party to refer disputes to an in-house or panel arbitrator of the respondent unless there is an express agreement to that effect. Therefore, the petitioner’s invocation of the Arbitration Clause through a notice under Section 21 of the Act is legally tenable. 6. In light of the 2015 Amendment, any proposed arbitrator falling within the categories listed in the Seventh Schedule of the Act is deemed ineligible to serve as an arbitrator. The petitioner, by issuing a notice under Section 21 and subsequently filing this petition before the Court, has not waived the applicability of Section 12(5) of - 5 - NC: 2025:KHC:8820 CMP No. 19 of 2024 the Act through any express agreement. Accordingly, the petitioner has fulfilled the mandate under Section 11(4) of the Act. Since the existence of the Arbitration Clause is not in serious dispute, this Court proceeds to pass the following order. ORDER (i) The Civil Miscellaneous Petition is allowed, appointing Shri.C.S.Malagi, Retired District and Sessions Judge, as the sole Arbitrator to resolve the dispute between the petitioner and respondent in terms of the Clause- 2900 of the Purchase Order dated 24.03.2022 (Annexure-B) to the petition. (ii) All contentions are kept open for adjudication in the arbitration proceedings. (iii) The Office is directed to communicate this order to the Arbitration and Conciliation Centre and - 6 - NC: 2025:KHC:8820 CMP No. 19 of 2024 Shri.C.S.Malagi, Retired District and Sessions Judge, as required under the Arbitration and Conciliation Centre Rules, 2012. Sd/- (SACHIN SHANKAR MAGADUM) JUDGE SJK List No.: 3 Sl No.: 5