Allahabad High Court on determination of whether the clause is an arbitration clause or expert determination clause

The main issue which fell for consideration before the Hon’ble Allahabad High Court was whether the following clause amounted to an arbitration clause “22. Except where otherwise specified in the contract the decision of the Engineer for the time being shall be final, conclusive and binding on all parties to the contract upon all questions relating to the meeting of the specifications, designs, drawings and instructions herein before mentioned. The decision of such Engineer as to the quality of workmanship or materials used on the work, or as to any other question claim, right matter or thing whatsoever in any way arising out or of relating to the contract, designs, drawing, specifications estimates, instructions, order of these conditions or otherwise concerning the works or the execution of failure to execute the same whether arising during the progress of the work or after the completion as abandonment of the contract by the contractor, shall also be final, conclusive and binding on the contractor.” Facts in brief The clause in question as set out herein above does not contain the word arbitration and the chief contention that was to be decided was whether the clause extracted herein above was an arbitration clause or an expert determination clause. Judgment and analysis The clause was held to be not in the nature of an arbitration clause and the following was observed “The various clauses of the agreement do not indicate that the parties have agreed to refer dispute between them to a decision of the private tribunal. We also find that one of the ingredients that the private tribunal should be empowered to adjudicate upon a dispute in an impartial manner after furnishing opportunity to the parties to put forth their case is also missing in this case. It is true that in the agreement there is no specific clause of arbitration or anything that detract from the arbitration agreement, but other ingredients are completely lacking in the present case. Hence, we are of the view that there was no arbitration clause and the parties had no intention to refer the matter for the arbitration.” Download Pdf