APHC010517132025 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI ARBITRATION APPLICATION NO: 32 of 2025 Bench Sr.No:-12 [3441] M/s. SCS Infrastructures Pvt. Ltd. ...Applicant Vs. The General Manager, East Coast Railway, and others ...Respondents ********** Advocate for Applicant: Mr. Vijaya Kumar Sata Advocate for Respondents: Mr. Jupudi V. K. Yagnadutt (Central Government Counsel) CORAM :THE CHIEF JUSTICE DHIRAJ SINGH THAKUR DATE : 13th February, 2026. P C : This is an application filed under Section 11 (5) of the Arbitration and Conciliation Act, 1996 (for short, “the Act of 1996”), seeking the appointment of an arbitrator for purposes of adjudicating the disputes arising out of and in connection with the Agreement, dated 16.06.2022. 2. Learned counsel for the parties do not deny that disputes have arisen between the parties which are required to be resolved through the mechanism of arbitration, in terms of Clause 11 of the Agreement, which reads as under: “11. ARBITRATION Any dispute, controversy or claim arising out of or relating to this agreement shall be settled in the first instance amicably between the members. If an amicable settlement cannot be reached as above, it will be settled by arbitration in accordance with the Indian Arbitration and Conciliation Act, 1996 or any amendments thereof. The Venue of the arbitration shall be (indicate the name of place). Notwithstanding p. 2 HCJ settlement of any dispute among the members of the JV Firm, the JV members shall ensure satisfactory completion of awarded work as per the contract with the Employer (Railways).” 3. Clause 64.(3)(b)(ii) of the General Conditions of Contract, dated 16.07.2020, is also relevant in the present case, which reads as under: “64.(3)(b): Appointment of Arbitrator where applicability of Section 12 (5) of Arbitration and Conciliation Act has not been waived off: (i)… (ii) In cases where the total value of all claims in question added together exceed ₹ 50,00,000/- (Rupees Fifty Lakh), the Arbitral Tribunal shall consist of a Panel of three (3) retired Railway Officer, retired not below the rank of Senior Administrative Grade Officer, as the arbitrators. For this purpose, the Railway will send a panel of at least four (4) names of retired Railway Officer(s) empanelled to work as Railway Arbitrator duly indicating their retirement date to the Contractor within 60 days from the day when a written and valid demand for arbitration is received by the General Manager. Contractor will be asked to suggest to General Manager at least 2 names out of the panel for appointment as Contractor's nominee within 30 days from the date of dispatch of the request by Railway. The General Manager shall appoint at least one out of them as the Contractor's nominee and will, also simultaneously appoint the balance number of arbitrators either from the panel or from outside the panel, duly indicating the 'Presiding Arbitrator' from amongst the 3 arbitrators so appointed. General Manager shall complete this exercise of appointing the Arbitral Tribunal within 30 days from the receipt of the names of Contractor's nominees. While nominating the arbitrators, it will be necessary to ensure that one of them has served in the Accounts Department.” 4. It is admitted that there has been no waiver by the applicant in terms of Section 12(5) of the Act of 1996. 5 Clause 64(3)(b)(ii) supra, which envisages the arbitral tribunal to consist of a panel of three retired railway officers and that the contractor to select at least two names out of the panel of four arbitrators prepared by the Railways, p. 3 HCJ out of whom one shall be appointed as the nominee of the contractor, is a condition which is unsustainable, in view of the ratio laid down by the Apex Court in Central Organisation for Railway Electrification v. ECI SPIC SMO MCML(JV) A Joint Venture Co.1. 6. The Constitution Bench of the Apex Court in Central Organisation for Railway Electrification (supra) held as under: “129. Equal treatment of parties at the stage of appointment of an arbitrator ensures impartiality during the arbitral proceedings. A clause that allows one party to unilaterally appoint a sole arbitrator is exclusive and hinders equal participation of the other party in the appointment process of arbitrators. Further, arbitration is a quasi-judicial and adjudicative process where both parties ought to be treated equally and given an equal opportunity to persuade the decision-maker of the merits of the case. An arbitral process where one party or its proxy has the power to unilaterally decide who will adjudicate on a dispute is fundamentally contrary to the adjudicatory function of arbitral tribunals. … 169. d. In the appointment of a three-member panel, mandating the other party to select its arbitrator from a curated panel of potential arbitrators is against the principle of equal treatment of parties. In this situation, there is no effective counterbalance because parties do not participate equally in the process of appointing arbitrators.” 7. Keeping in view the ratio of the judgment supra, the condition for appointment of an arbitrator as prescribed under Clause 64(3)(b)(ii) of the General Conditions of Contract shall have no application in the facts and circumstances of the present case. 1 2024 SCC OnLine SC 3219 p. 4 HCJ 8. A similar view has also been taken by this Court in Rashtriya Ispat Nigam Limited v. Union of India and others2. 9. Be that as it may, the present Arbitration Application is allowed. Dr. Justice V. R. K. Krupa Sagar, former Judge of the High Court of Andhra Pradesh, is appointed as an Arbitrator, who shall enter upon the reference and adjudicate upon the disputes arising out of and in connection with the Agreement, dated 16.06.2022 and render the Award within the statutory period. The parties shall be free to file detailed claims and counter-claims, before the learned Arbitrator. The learned Arbitrator shall also be entitled to claim the fee in consultation with the parties. No costs. Consequently, pending miscellaneous applications, if any, shall stand closed. A copy of this order be communicated to the learned Arbitrator on the address mentioned herein below: Dr. Justice V. R. K. Krupa Sagar, D.No.4-5-3/5, Chaitanya School Backside, Navabharath Nagar, IV Line, First Cross Road, Ring Road, Guntur, Andhra Pradesh – 522 006. Phone: 98487 64234 DHIRAJ SINGH THAKUR, CJ. SSN 2 ARBAPPL_25_2021, decided on 27.06.2025