1 CGHC010264232026 2026:CGHC:28416 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR ARBR No. 40 of 2026 Ms BSBK Private Limited A Company incorporated under The Companies Act 1956 Having Its Registered Office At 4th Floor, Surya Treasure Island Mall, Junwani Bhilai - 490020 District – Durg, Chhattisgarh ... Applicant versus Steel Authority of India Limited / Bhilai Steel Plant, Through Its Director In-Charge, Bhilai Steel Plant, Bhilai- 490001, Distt- Durg, Chhattisgarh ... Respondent(s) For Applicant : Mr. Manoj Paranjpe, Senior Advocate assisted by Mr. Khilendra Sahu, Advocate. For Respondent : Mr. Vikram Sharma, Advocate. Hon’ble Mr. Ramesh Sinha, Chief Justice Order on Board 09.07.2026 1. This is an application under Section 11(6) read with Section 15(2) of the Arbitration and Conciliation Act, 1996 for appointment of an Arbitrator. 2. The facts, in brief, as projected by the applicant are that the applicant, BSBK Private Limited, is a company incorporated under the Companies Act, 1956. The applicant was the lead member of a consortium (along with Singhvi Agro Farms & Finance Private Limited and Jiangsu Mountop Group Company Limited) which was awarded the Project by the respondent. The respondent, Steel Authority of India Limited / Bhilai Steel Plant ("SAIL-BSP"), is a public sector undertaking and an instrumentality of the State within the meaning of Article 12 of the Constitution of India. The respondent floated a Notice PREETI KUMARI Digitally signed by PREETI KUMARI Date: 2026.07.13 11:03:52 +0530 2 Inviting Tender (NIT) dated 28.02.2017 for the Project. The Project was awarded to the applicant vide Award Letter No. CCNW/PO-4270006497/PR No: 1130011539/6296 dated 15.12.2017. A formal Agreement was executed between the parties on 19.07.2018. The total duration of the Project was fixed at four (4) years commencing from 01.12.2017, comprising a commissioning phase (Phase I) of one (1) year and an operational phase (Phase II) of three (3) years, with the Agreement ending on 30.11.2021. The contract between the parties contains a provision for arbitration. 3. Clause 93 of the GCC, as modified by Clause 23 of the SCC (which replaces "Indian Arbitration Act, 1940" with "Arbitration & Conciliation Act, 1996" and "Managing Director" with "Chief Executive Officer"), provides for settlement of disputes by reference to a sole arbitrator. The relevant arbitration clause reads as under. "All questions disputes or difference of any kind whatsoever, arising out of, or in connection with, the contract, at any time, whether during the progress of the work or after its completion or whether before or after the determination of the contract... shall be referred by the parties hereto for decision by a sole arbitrator to be appointed as hereinafter mentioned. Matter in question, dispute or difference... shall be referred for decision to a sole arbitrator to be appointed by the Chief Executive Officer, SAIL, Bhilai Steel Plant... The provision of the Arbitration && Conciliation Act, 1996 and of the rules thereunder and all statutory modifications thereof shall govern all such arbitration proceedings." 4. The arbitration clause in the Contract provides for appointment of a sole arbitrator by the Chief Executive Officer of SAIL-BSP. Such mechanism of unilateral appointment by one party is impermissible in law, as held by the Hon'ble Supreme Court in Perkins Eastman Architects DPC & Anr. v. HSCC (India) Ltd. (2020) 20 SCC 760 and in TRF Limited v. Energo Engineering Projects Limited (2017) 8 SCC 377. The respondent itself has acknowledged this position in its email dated 09.03.2026. Therefore, the appointment of a Sole Arbitrator in the present case falls within the domain of 3 this Hon'ble Court under Section 11(6) of the Act. During the execution of the Project, the applicant faced several delays and impediments solely attributable to the respondent, including delayed allotment of land, restricted operational approvals (two-shift instead of requested three-shift), power and water supply disruptions, supply of inferior quality raw material causing equipment damage, and production restrictions imposed during the COVID-19 pandemic. The applicant brought these issues to the notice of the respondent through contemporaneous correspondence. 5. Learned respective counsel for the applicant submits that the delays being attributable to the respondent, the respondent, inter alia, arbitrarily imposed a Penalty of Rs.1,61,61,420/- for alleged production shortfall, levied Liquidated Damages of Rs.77,72,063/-, and forfeited the Security Deposit of Rs.3,40,86,163/- without following the contractual procedures, without conducting any independent delay analysis, and without providing any justification or opportunity of hearing to the applicant. The applicant's Delay Report establishing 473 days of delay attributable to the respondent was neither considered nor responded to. The applicant made repeated representations to the respondent seeking refund of the arbitrarily withheld amounts, but the same were not acted upon. Left with no alternative, the applicant approached this Court by filing Writ Petition (C) No. 5878 of 2025, challenging the arbitrary actions of the Respondent under Article 226 of the Constitution of India. This Court, vide judgment and order dated 11.11.2025 in WPC No. 5878 of 2025 observed that the contract contains an arbitration clause which provides a comprehensive and statutorily recognized dispute resolution mechanism, and the applicant has an effective, adequate and efficacious alternative remedy available thereunder. The Hon'ble Court accordingly dismissed the writ petition as not maintainable, with liberty to the applicant to avail the remedy available the arbitration clause in the 4 Agreement. (wrongly referred to Clause 32 of applicant's Article of Association in the SCC instead of Clause 93 of GCC - the arbitration clause). Aggrieved by the said dismissal, the applicant preferred Special Leave Petition (Civil) No. 2437 of 2026 before the Hon'ble Supreme Court of India. The Hon'ble Supreme Court, vide order dated 23.01.2026, was not inclined to interfere with the impugned judgment and order and dismissed the SLP. In compliance with the aforesaid directions of this Court and the Hon'ble Supreme Court, the applicant issued a formal notice dated 02.02.2026 to the respondent invoking arbitration under Clause 93 of the GCC for resolution of disputes relating to: (a) refund of Security Deposit of Rs.3,40,86,163/-; (b) refund of Liquidated Damages of Rs.77,72,063/-; (c) refund of Penalty Charges of Rs.1,61,61,420/-; (d) financial costs borne by the applicant on account of the above deductions and forfeitures; and (e) other claims and losses arising out of or in connection with the Contract. Through the said notice, the applicant proposed the appointment of Hon'ble Justice Rajendra Chandra Singh Samant (Retd.), former Judge, High Court, as the Sole Arbitrator, and requested the respondent to communicate concurrence within 30 days. The applicant also reserved its right to approach this Hon'ble Court under Section 11 of the Act in the event of failure to reach mutual agreement. The contractual mechanism for appointment of a sole arbitrator by the Chief Executive Officer of SAIL-BSP being impermissible in law, the applicant called upon the respondent for appointment of a Sole Arbitrator by mutual consent. Despite exchange of correspondence between the parties, the parties have been unable to reach mutual consent on the appointment of a Sole Arbitrator. A period of more than 30 days from the date of the Applicant's arbitration notice dated 02.02.2026 has long since elapsed. 6. He further submits that despite the applicant's letter dated 10.03.2026, the respondent has failed to share any panel of empanelled arbitrators or to 5 respond in any manner whatsoever. A period of more than 30 days from the date of the applicant's arbitration notice dated 02.02.2026 has long since elapsed, and the parties have failed to reach a mutual agreement on the appointment of a Sole Arbitrator. It is pertinent to note that both this Court (in its order dated 11.11.2025 in WPC No. 5878 of 2025) and the Hon'ble Supreme Court of India (in its order dated 23.01.2026 in SLP (C) No. 2437 of 2026) have directed the applicant to avail the remedy under the arbitration clause of the Contract. The present application is in compliance with the said directions. The inaction and apathy of the respondent in appointment of an arbitrator despite the applicant's notice and follow-up correspondence demonstrates that the respondent has no interest in resolving the dispute through the agreed mechanism. The applicant was therefore left with no option but to approach thisCourt for appointment of a Sole Arbitrator. All the conditions requisite for exercise of power under Section 11 of the Act have been satisfied, namely: (a) an arbitration agreement exists between the parties (Clause 93 of GCC as amended); (b) disputes have arisen falling within the scope of the arbitration clause; (c) the applicant has duly invoked arbitration by issuing notice dated 02.02.2026; (d) the parties have failed to agree on the appointment of a Sole Arbitrator within 30 days; and (e) the contractual mechanism for appointment by the Chief Executive Officer is impermissible in law. 7. Learned counsel for the respondent opposes this arbitration request application, however he submits that the respondent shall have no objection if this Court appoints any Arbitrator for resolving the dispute between the parties. 8. I have heard learned counsel appearing for the parties, perused the pleadings and documents appended thereto. 9. Though the respondent have vehemently opposed the present arbitration 6 request petition, but this Court, having regard to the existence of an arbitration agreement and the failure of the respondent to act in accordance with the agreed procedure, is of the considered opinion that the disputes deserve to be referred to arbitration. Accordingly, the dispute between the parties are referred to the sole arbitration of a retired Judge of this High Court, to be appointed in accordance with law. 10. Accordingly, this Court appoints Hon’ble Mr. Justice Deepak Kumar Tiwari, a retired Judge of this High Court, to act as the Sole Arbitrator for resolving the dispute between the parties before whom the respondent may raise all his objections, as has been raised herein. 11. The Registry is directed to communicate this order to Hon'ble Mr. Justice Deepak Kumar Tiwari in the proper address. 12. The remuneration of the Arbitrator shall be settled with the mutual consent of the parties. 13. The arbitration request petition, accordingly, stands allowed. Sd/- (Ramesh Sinha) Chief Justice Preeti