1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 12TH DAY OF FEBRUARY, 2025 BEFORE THE HON’BLE MR. JUSTICE SACHIN SHANKAR MAGADUM CIVIL MISC. PETITION NO.78 OF 2023 BETWEEN: 1. UNION OF INDIA REP. BY THE GENERAL MANAGER RAIL WHEEL FACTORY MIN. OF RAILWAYS YELAHANKA BENGALURU - 560 064. 2. PRINCIPAL CHIEF MECHANICAL ENGINEER RAIL WHEEL FACTORY MIN. OF RAILWAYS YELAHANKA BENGALURU - 560 064. ...PETITIONERS (BY SRI. SHIVA KUMAR, ADVOCATE) AND: M/S. GLOBAL ENVIRO SYSTEMS (P) LTD., NO.163, /A (PART), GAGILLSPUR (VILLAGE) QUTHBULLAPUR, RR DISTRICT HYDERABAD - 500 043 TELANGANA STATE. …RESPONDENT (BY SRI. MUTTALLI SANTOSH TIMAPPA, ADVOCATE) 2 THIS CIVIL MISC. PETITION IS FILED UNDER SECTION 11(6) OF ARBITRATION AND CONCILIATION ACT, 1996 PRAYING TO APPOINT ONE ARBITRATOR ON BEHALF OF THE RESPONDENT, AS PER SEC. 11(6) OF THE ARBITRATION AND CONCILIATION ACT, 1996, FROM THE FOUR NAMES COMPRISING OF SHRI S.SUBRAHMANYAM [RETD. EXECUTIVE DIRECTOR (RP), RAILWAY BOARD], SHRI RADHA UDAY [RETD. FINANCIAL ADVISOR AND CHIEF ACCOUNTS OFFICER], SHRI PREMANANDA MOHANTY, [RETD. FINANCIAL ADVISOR AND CHIEF ACCOUNTS OFFICER, EAST COAST RAILWAY] AND SHRI BHUVANESH PRAKASH KHARE [RETD. GENERAL MANAGER, DIESEL LOCOMOTIVE WORKS], SO AS TO FACILITATE THEREAFTER THE CONSTITUTION OF A THREE-MEMBER ARBITRAL TRIBUNAL (WHICH INCLUDES THE ONE ARBITRATOR TO BE NOMINATED BY THIS HON'BLE COURT ON BEHALF OF THE RESPONDENT) BY THE GENERAL MANAGER (ARBITRATOR APPOINTING AUTHORITY), TO ADJUDICATE THE DISPUTES BETWEEN THE PETITIONERS AND THE RESPONDENT, AND AS PER THE CONTRACT AGREEMENT DATED 23.03.2018 (ANNEXURE 'A') ENTERED INTO BETWEEN THE PETITIONERS AND THE RESPONDENT, READ WITH CLAUSE 64 OF THE GCC, VIDE ANNEXURE-C. THIS CIVIL MISC. PETITION HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 31.01.2025, THIS DAY ORDER WAS PRONOUNCED THEREIN, AS UNDER: 3 CORAM: HON’BLE MR. JUSTICE SACHIN SHANKAR MAGADUM C.A.V. ORDER This Civil Miscellaneous Petition is filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (for short 'the Act') seeking appointment of sole arbitrator to resolve the dispute and difference between the parties in terms of the Letter of acceptance dated 9.6.2016 and subsequent contractual agreement dated 23.3.2018. 2. Petitioners contend that pursuant to tender floated by Union of India, the respondent turned out to be a successful bidder and accordingly, a letter of acceptance was entered into between the petitioners and respondent. The project was agreed to be accomplished within a period of four months from the date of letter of acceptance. Petitioners' allege that respondent has committed a breach and the delay in execution of project has incurred production loss of 72 crores. Petitioners have invoked 4 arbitration clause by issuing a notice. Petitioners contend that clause 64(1)(i) of the General Conditions of Contract (GCC) of the Indian Railway contemplates an arbitration clause. Respondent has responded to this notice rejecting the proposal. Hence, this petition. 3. Upon receipt of the notice, the respondent has secured legal representation and has raised a preliminary objection regarding the maintainability of the present petition. The primary contention advanced by the respondent is that the dispute in question is already under adjudication in a civil suit filed by the respondent in O.S. No. 238/2018. In light of this pending litigation, the respondent asserts that this Court is devoid of jurisdiction to entertain the present petition under Section 11(6) of the Act. The respondent submits that the matters in controversy, including those forming the subject of the arbitration clause, are integrally connected with the issues in the pending suit. Accordingly, it is urged that the 5 petitioners are precluded from invoking the arbitration mechanism at this stage, and the present proceedings ought to be dismissed as being unsustainable in law. 4. This Court has undertaken a meticulous examination of the petition, the annexures, and the supporting documents placed on record. Upon careful scrutiny, it is evident that the petitioners have successfully established the existence of an arbitration agreement enumerated in Clause 64(1)(i) of the General Conditions of Contract (GCC) of the Indian Railway. The said clause explicitly provides for the resolution of disputes through arbitration, thereby satisfying the threshold requirement for invoking the jurisdiction of this Court under Section 11(6) of the Act. Additionally, this Court has considered the procedural compliance mandated under Section 11(4) of the Act and finds that the petitioners have duly adhered to the requisite formalities prescribed therein. In view of the foregoing, this Court is of the considered opinion that the 6 petitioners have demonstrated a valid and enforceable basis for seeking the appointment of an arbitrator, notwithstanding the respondent’s objection regarding the pending suit. The existence of a civil suit per se does not ipso facto preclude arbitration, particularly when a valid arbitration clause governs the contractual relationship between the parties. 5. In the light of the aforesaid clause of arbitration and contentions advanced by petitioners and respondent, this Court proceeds to pass the following: ORDER (i) This civil miscellaneous petition is allowed appointing Shri Justice Ram Mohan Reddy, Former Judge, High Court of Karnataka, as the sole Arbitrator to enter reference of the disputes between the petitioners and the respondents and conduct proceeding at the Arbitration and Conciliation Centre (Domestic and International), Bengaluru according to the Rules governing the said Arbitration Centre; 7 (ii) All contentions inter se parties are left open for adjudication in the arbitration proceedings; (iii) Office is directed to communicate this order to the Arbitration and Conciliation Centre and to Sri. Justice Shri Justice Ram Mohan Reddy, Former Judge, High Court of Karnataka, as required under the Arbitration and Conciliation Centre Rules, 2012; SD/- (SACHIN SHANKAR MAGADUM) JUDGE *alb/-.