1 2026:CGHC:2008 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR ARBR No. 40 of 2025 M/s Arunodaya Coal Agency, Through Its Proprietor Mr. Kishor Sankhla, Having Its Registered Office At Jamuna Tower, Plot No. C-152/1, Near Dakshin Mukhi Hanuman Mandir, Pachpedi Naka, Raipur (C.G.), Chhattisgarh ...Applicant versus 1 - South Eastern Coalfields Ltd. Through Its General Manager, SECL Bhawan, Seepat Road, Bilaspur (C.G.) 2 - South Eastern Coalfield Ltd Through Its Area General Manager, Raigarh Area, District Raigarh (C.G.) ...Respondents For Applicant : Ms. Akanksha Jain, Advocate. For Respondents : Ms. Aditi Joshi, Advocate. Hon’ble Mr. Ramesh Sinha, Chief Justice Order on Board 13.01.2026 1. This is an application under Section 11(6) of the Arbitration and Conciliation Act, 1996 (for short, “the Act of 1996”) for appointment of an arbitrator. VAIBHAV SINGH Digitally signed by VAIBHAV SINGH Date: 2026.01.15 10:43:30 +0530 2 2. The applicant has prayed for the following relief(s): a. Allow the instant application by appointing an independent Sole Arbitrator to adjudicate upon the disputes that has arisen between the applicant and the respondents in the present matter and to consider the claims of the applicant. b. Any other relief, which this Hon'ble Court may deems fit and proper may also be awarded to the Applicant including the cost of the present application. 3. The fact, in brief, as projected by the applicant is that the applicant, a proprietorship firm engaged in mining and earthwork contracting for over 35 years and a registered MSME, was awarded a contract by the respondents, South Eastern Coalfields Limited, pursuant to a tender dated 28.03.2018 for deployment of Heavy Earth Moving Machinery at the Gare Palma IV/1 Open Cast Project, Raigarh Area, and accordingly a Letter of Intent was issued followed by a work order dated 27.10.2018 and agreement dated 08.11.2018 for a period of 730 days; however, the respondents admittedly halted the work unilaterally on 29.08.2019 due to non-availability of land, despite which only a partial survey of work up to July 2019 was conducted and payment released, while the legitimate dues for the work executed in August 2019 remained unpaid, and instead of clearing the final bill and releasing the security deposit upon the applicant’s request for foreclosure of the contract, the respondents arbitrarily and illegally invoked the bank guarantee and recovered an amount of Rs.6,89,043 without granting any opportunity of hearing, thereby violating the principles of natural justice; the respondents’ continued failure to revoke the suspension, to clear the pending bills, and 3 their unlawful recovery actions resulted in disputes between the parties, compelling the applicant to first seek resolution through internal mechanisms as per Clause 13 of the contract and thereafter to approach the Micro and Small Enterprises Facilitation Council, Raipur, where the matter was rejected only on 30.04.2025, following which the applicant, in accordance with Clause 13A of the contract, issued notices dated 01.02.2024 and 07.06.2025 calling upon the respondents to concur in the appointment of a sole arbitrator, but despite the lapse of considerable time, the respondents failed to take any steps for appointment of an arbitrator, thereby leaving the applicant with no alternative but to invoke the jurisdiction of this Hon’ble Court under Section 11 of the Arbitration and Conciliation Act, 1996 for appointment of an independent and impartial sole arbitrator to adjudicate the disputes arising between the parties. 4. Ms. Akanksha Jain, learned counsel for the applicant submits that the disputes and differences between the parties clearly fall within the ambit of arbitral matters arising out of the agreement, inasmuch as the issues relating to wrongful suspension of work, non-payment of the final bill for August 2019, unlawful deductions and recovery of Rs.6,89,043, and the failure to conduct a final survey under Clause 8 of the Conditions of Contract are purely contractual in nature and squarely covered by the arbitration clause; it is further submitted that the respondents, without issuing any show-cause notice or adhering to due process, unilaterally issued a sanction order and recovery notice in February 2023 and forcibly recovered the said amount in March 2023, which constitutes a grave violation of the principles of natural justice and the express terms of the contract; the applicant states that the stoppage of work on 4 29.08.2019 was solely due to non-availability of land and not attributable to any fault on the part of the applicant, and therefore, in terms of Clause 9.4 of the Conditions of Contract, the respondents are liable to make full payment and compensate the applicant for the losses suffered due to such arbitrary abandonment and reduction of the scope of work; despite repeated attempts made by the applicant to resolve the disputes through the internal mechanism under Clause 13 of the agreement, no resolution was achieved due to the inaction of the respondents, and even after issuance of notices calling upon the respondents to appoint a sole arbitrator, they failed to do so, leaving the applicant with no efficacious remedy but to approach this Hon’ble Court under Section 11(6) of the Arbitration and Conciliation Act, 1996; since the agreement contains a valid arbitration clause, the appointment of an independent and impartial sole arbitrator is necessary for the effective and expeditious adjudication of the disputes, the requisite court fee has been duly affixed, the cause of action has arisen within the territorial jurisdiction of this Hon’ble Court, and the present application is duly supported by an affidavit. 5. Ms. 5. Ms. Aditi Joshi, learned counsel for the respondents submits that the present application filed under Section 11 of the Arbitration and Conciliation Act, 1996, seeking appointment of a sole arbitrator in relation to the contract for hiring of Heavy Earth Moving Machinery at Gare Palma IV/1 Open Cast Mine, is premature, misconceived, and not maintainable in law, as it has been filed in clear violation of the mandatory two-tier dispute resolution mechanism expressly agreed between the parties under Clauses 13 and 13A of the Conditions of Contract; it is submitted that the said clauses constitute binding pre- conditions to arbitration, requiring the contractor to first raise its disputes 5 in writing before the Engineer-in-Charge and thereafter submit to institutional resolution through the Area General Manager and the committee constituted by the employer, and only upon failure of this in house mechanism can arbitration be invoked, as Clause 13A categorically provides that the arbitration clause can be triggered only after exhaustion of remedies under Clause 13 in the present case, contrary to the applicant’s misleading averments, the contractual dispute resolution process is not only alive but actively pending, as the respondents issued a notice dated 01.09.2025 through the Area General Manager for settlement of disputes under Clause 13, pursuant to which a meeting was convened on 10.09.2025 in which the applicant admittedly participated and submitted its representation, and therefore the first-tier mechanism has not yet attained finality; in these circumstances, the applicant’s attempt to invoke arbitration amounts to a deliberate effort to bypass the agreed contractual procedure, and until the internal mechanism reaches its logical conclusion, the jurisdiction of an arbitral tribunal does not arise; it is well settled in law that where a contract prescribes mandatory pre-arbitral steps, such steps are enforceable and cannot be ignored, and any petition under Section 11 filed without exhausting the agreed mechanism is premature and legally untenable; hence, the present application deserves to be dismissed at the threshold as not maintainable, with liberty reserved to the respondents to place further facts and documents on record, if so required. 6. I have heard learned counsel appearing for the parties, perused the pleadings and documents appended thereto. 7. A query was put to learned counsel appearing for the parties as to 6 whether they are agreeable for a common name who can be appointed as Arbitrator, learned counsel for the parties submitted that they would have no objection if any retired Judge of this High Court is appointed as the Sole Arbitrator. They further submit that Hon’ble Mr. Justice Deepak Kumar Tiwari who is a retired Judge of this High Court may be appointed as the Sole Arbitrator. 8. In view of the above, Hon’ble Mr. Justice Deepak Kumar Tiwari a retired Judge of this High Court is appointed to act as the Sole Arbitrator to resolve the dispute involved in this arbitration request between the parties a retired Judge of this High Court, to act as the Sole Arbitrator for resolving the dispute between the parties before whom the respondents shall be at liberty to raise all his objections, as has been raised herein. 9. The Registry is directed to communicate this order to Hon’ble Mr. Justice Deepak Kumar Tiwari in the proper address. 10. The remuneration of the Arbitrator shall be settled with the mutual consent of the parties. 11. The arbitration request petition, accordingly, stands allowed. Sd/- (Ramesh Sinha) CHIEF JUSTICE vaibhav