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Madhya Pradesh High Court · body

2011 DIGILAW 1220 (MP)

State of M. P. v. Dewas Udyog, Indore

2011-10-24

PRAKASH SHRIVASTAVA, SHANTANU KEMKAR

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JUDGMENT : Shantanu Kemkar, J.;- This order shall govern disposal of Arbitration Appeal No.25/2010, Arbitration Appeal No.26/2010, Writ Petition No.12075/2010 and Writ Petition No.12172/2010. 2. The appeals under Section 37 of the Arbitration and Conciliation Act, 1996 (for brevity, the Act 1996) are directed against the order dated 30.07.2010 passed by District Judge, Neemuch in Arbitration Case No.1/2010 by which the learned District Judge has dismissed the applications filed by the appellants under Section 34 of the Act, 1996 for setting aside arbitral award dated 19.01.2010 passed by Arbitrator - Shri PC Agrawal, a former Judge of this Court and Senior Advocate of Supreme Court of India. 3. Brief facts necessary for deciding the controversy involved in these appeals and writ petitions may be stated as under. 4. The Union of India promoted the lift irrigation scheme by the name of “Swarna Jayanti Gram Swaraj Yojana” (for short, scheme) in respect of (i) Deori Somia and Barkheda villages and (ii) Khan Khedi village. The Zila Panchayat Neemuch was entrusted with the job of implementation of the projects in question by the State Government as well as by the Central Government. Two separate agreements were executed, first on 17.05.2000 (for Khan Khedi Village Project) and second on 15.11.2002 (for Deori Somia and Barkheda village Project) under the said “Swarna Jayanti Gram Swaraj Yojana” between Zila Panchayat and first respondent M/s Dewas Udyog. 5. The arbitration appeals are arising out of the award passed in respect of the Khan Khedi Project. The writ petitions are in respect of Deori Somia and Barkheda Project. 6. For the sake of convenience, the facts are taken in respect of Khan Khedi Project relating to which the arbitration appeals are filed. 7. The Union of India under the aforesaid scheme sanctioned Rs.15,00,00,000/- for the execution of Khan Khedi Lift Irrigation Project. The agreement dated 17.05.2000, as aforesaid, was in the nature of lump sum contract with stipulation that no additional payment than the cost fixed in the agreement shall be payable to the first respondent. Out of the agreed amount of contract of Rs.14,32,86,036/- for the work executed by the first respondent, the appellant Zila Panchayat paid Rs.14,18,00,000/- to the first respondent Dewas Udyog. However, the first respondent claimed further amount of Rs.9,47,91,668/- from the Zila Panchayat and for that sent a legal notice dated 16.08.2007, demanding the said further amount. Out of the agreed amount of contract of Rs.14,32,86,036/- for the work executed by the first respondent, the appellant Zila Panchayat paid Rs.14,18,00,000/- to the first respondent Dewas Udyog. However, the first respondent claimed further amount of Rs.9,47,91,668/- from the Zila Panchayat and for that sent a legal notice dated 16.08.2007, demanding the said further amount. Thereafter, since the aforesaid amount was not paid by the appellants, the first respondent M/s. Dewas Udyog filed Writ Petition No.5787/2007 against the Zila Panchayat, the State Government and the Union of India, seeking direction against them to make payment of amount of Rs.9,47,91,668/-, including interest or to make payment of amount of Rs.4,26,22,106/- and further direction to the respondents to pay interest at the rate of 18% per annum with price escalation at the rate of 12% per annum. 8. The said Writ Petition No.5787/2007 was disposed of by the learned Single Judge of this Court vide order dated 04.03.2008, directing the said authorities to look into the matter and release the admitted amount of Rs.36,47,591/- in favour of M/s. Dewas Udyog within four weeks. As regards the claim of the first respondent M/s. Dewas Udyog for extra work, the learned Single Judge observed that if the writ petitioner (M/s. Dewas Udyog) has already so applied, the matter shall be referred to an Arbitrator under the provisions of Arbitration & Conciliation Act, 1996 to resolve the dispute between the parties. Following is the operative part of the order passed in Writ Petition No.5787/2007 on 04.03.2008: - “Consequently, the present petition is disposed of and it is directed that the respondent no.2, Principal Secretary, Panchayat and Rural Development Department, shall look into the matter and release the admitted amount of Rs.36,47,591/- to the petitioner - contractor within a period of four weeks from the date of certified copy of this order is received. With regard to the rest of the claim made by the petitioner, if the petitioner has already so applied, the matter shall be referred to an Arbitrator under the provisions of Arbitration and Conciliation Act, 1996 to resolve the dispute between the parties.” 9. With regard to the rest of the claim made by the petitioner, if the petitioner has already so applied, the matter shall be referred to an Arbitrator under the provisions of Arbitration and Conciliation Act, 1996 to resolve the dispute between the parties.” 9. Thereafter, when it was realized by the appellants herein that in the absence of any arbitration agreement between the parties, the learned Single Judge could not have passed the aforesaid order dated 04.03.2008, giving direction for reference of the matter to an Arbitrator under the provisions of the Act of 1996, a Review Petition No.14/2008 was filed by the appellants before the learned Single Judge, making a prayer to review/recall the part of the said order dated 04.03.2008 passed in Writ Petition No.5787/2007. The learned Single Judge, after hearing the parties, realizing the mistake, which had occurred in giving the direction to refer the matter to an Arbitrator, allowed the Review Petition No.14/2008 vide order dated 23.07.2009. For ready reference, relevant portions of the said order passed in Review Petition No.14/2008 are extracted below: - “Now the present review petition has been filed by the applicants - State Government, Jila Panchayat and Executive Engineer, Water Resources Department, who were arrayed as respondents no.2 to 4 in the writ petition. It has been maintained that this Court, while disposing of the writ petition, had made an observation that “with regard to the rest of the claim made by the petitioner, if the petitioner has already so applied, the matter shall be referred to an Arbitrator under the provisions of the Arbitration and Conciliation Act, 1996 to resolve the dispute between the parties.” It has been specifically pleaded by the review petitioners, and has also been reiterated by Shri A.S. Kutumbale, during the course of arguments, that there is no arbitration agreement / clause in existence between the parties to the dispute. In this regard, Shri Kutumbale has specifically drawn pointed attention of the Court to the agreement in question, which has been appended as Annexure A-4 with the review petition. In this regard, Shri Kutumbale has specifically drawn pointed attention of the Court to the agreement in question, which has been appended as Annexure A-4 with the review petition. Even Shri A.S. Garg, learned senior counsel for the non-applicant, does not dispute the fact that there is no written or specific arbitration clause existing between the parties in the agreement, Annexure A-4 or any other agreement, but maintains that keeping in view the fact that in the joint meeting convened by the parties on March 20, 2008, the review petitioners themselves had agreed, and suggested the name of certain retired High Court Judges, and as such shall be deemed to have given consent for appointment of an Arbitrator, and therefore, the contention that there is no written agreement or clause with regard to reference of dispute between the parties to an Arbitrator is absolutely without any justification, at this stage. Shri Garg also reasserts the fact that the Arbitration proceedings have already convened before the Arbitrator appointed with regard to the dispute arising between the parties. At the outset, it may be noticed that, concededly, it is not a matter of any dispute between the parties that there is no written agreement or any clause with regard to the reference of dispute between the parties to an Arbitrator. In these circumstances, the provisions of Arbitration and Conciliation Act, 1996 would not be attracted in any manner. However, existence of such an arbitration agreement is not the prerequisite for operation of the M.P. Madhyaastham Adhikaran Adhiniyam, 1983, therefore, even if there is no written agreement with regard to the reference of dispute to the Arbitrator between the contesting parties, the matter could be still referred to an Arbitrator for adjudication of the dispute between the parties under the provisions of M.P. Madhyaastham Adhikaran Adhiniyam, 1983. However, such a dispute, obviously, could not be referred to an Arbitrator appointed under the Arbitration and conciliation Act, 1996. At this stage, an objection has been raised by Shir Garg that since the union of India and Jila Panchayat are also parties to the contest, therefore, a dispute in which any of such parties, are there, which are not so notified, cannot be referred to any Arbitral Tribunal under the provisions of M.P. Madhyaastham Adhikaran Adhiniyam, 1983. At this stage, an objection has been raised by Shir Garg that since the union of India and Jila Panchayat are also parties to the contest, therefore, a dispute in which any of such parties, are there, which are not so notified, cannot be referred to any Arbitral Tribunal under the provisions of M.P. Madhyaastham Adhikaran Adhiniyam, 1983. In my considered view, the objection raised by the learned senior counsel for the non-applicant no.1 cannot be sustained. As a matter of fact, as already noticed, the dispute is essentially now between the State government on the one side and the executing agency i.e. Contractor-nonapplicant no.1 on the other side. Union of India and Jila Panchayat are almost proforma parties to the dispute. Shri Zelawat, learned counsel for the Union of India, has already made a statement before the Court that the entire funds for the project in question had already been released by the Union of India to the State Government, and therefore, after the aforesaid release, the Union of India has also no subsisting interest in the matter. Shri Zelawat has in fact made a specific statement in this regard before the Court. On perusal of the ultimate para of the order dated March 4, 2008, passed in W.P. No.5787/2007, it appears that pointed attention of the Court was not drawn to the fact that no such arbitration agreement / clause was in existence between the parties, and therefore being oblivious of the said fact, the aforesaid observations had been made by this Court to the effect that “if the petitioner has already has already so applied, the matter shall be referred to an Arbitrator under the provisions of Arbitration and Conciliation Act, 1996 to resolve the dispute between the parties”. Obviously, the said observation made by this Court cannot be treated to be any direction to appoint an Arbitrator to resolve the dispute between the parties. The aforesaid direction had been issued only with a view that, if the petitioner - Contractor had already so applied for appointment of Arbitrator, as per some existing agreement, then the Arbitrator was to be appointed. At his stage, Shri Garg has placed reliance upon a judgment of the Apex Court in the case of Union of India Vs. Krishan Lal Arneja (2004) 8 SCC 453 . At his stage, Shri Garg has placed reliance upon a judgment of the Apex Court in the case of Union of India Vs. Krishan Lal Arneja (2004) 8 SCC 453 . Referring to para 34 of the said judgment, the learned senior counsel has argued that in fact even if there was no arbitration agreement/clause existing between the parties, the Court was not powerless in ordering the appointment of such an Arbitrator to resolve the dispute between the parties. However, as noticed above, at no stage, in the final order dated March 4, 2008 this Court had directed the appointment of an Arbitrator to resolve any dispute between the parties. The aforesaid observation had in fact been made under a mistaken impression that a request for appointment of Arbitrator had already been made by the writ petitioner, and the said request was yet pending before the department. In these circumstances, it was directed that the matter be referred to an Arbitrator under the provisions of Arbitration and Conciliation Act, 1996. Obviously, it appears that the aforesaid observations, contained in the last five lines of the order dated March 4, 2008 were passed under a mistaken impression of the Court, and as such need to be recalled to the extent. Consequently, in view of the aforesaid discussion, since I find that there had been some mistake by the Court in passing the order dated March 4, 2008, to the extent as above, therefore, it is a fit case for the Court to exercise its suo moto powers to recall the aforesaid observations. In these circumstances, the application for condonation of delay in filing the review petition has no relevance. I.A. is disposed of accordingly. The present review petition is allowed. It is directed that the last five lines in the order dated March 4, 2008 to the effect that “with regard to the rest of the claim made by the petitioner, if the petitioner has already so applied, the matter shall be referred to an Arbitrator under the provisions of the Arbitration and Conciliation Act, 1996 to resolve the dispute between the parties” shall stand recalled and shall be deemed to have been expunged from the aforesaid order. However, it is clarified that the writ petitioner shall have a liberty to resort to its remedies, in accordance with law, with regard to the rest of the claim as per the cause of action, which may be subsisting.” 10. It is worth mentioning here that during the intervening period between passing of the order dated 04.03.2008 in Writ Petition No.5787/2007 and the order of recall passed in Review Petition No.14/2008 on 23.07.2009, a joint meeting between the officers of the State Government, Zila Panchayat and the first respondent was convened on 20.03.2008. The proceeding of the meeting dated 20.03.2008, reads as under: - XXX XXX XXX 11. On the strength of the aforesaid decision taken in the meeting dated 20.03.2008, the first respondent M/s. Dewas Udyog alone singly approached Shri Justice (Retd.) P.C. Agrawal to start arbitration proceedings. However, the appellants objected to the same on the ground that there exist no arbitration agreement between the parties. After the decision in the review petition, as extracted above, on 19.10.2009, the first respondent M/s. Dewas Udyog again approached to the said Arbitrator Shri P.C. Agrawal to decide the dispute referred to it. The appellants submitted their objections about jurisdiction of the Arbitrator to decide the dispute on the ground that in the contract there exists no arbitration clause and that the directions issued by the High Court in writ petition have been withdrawn in review petition, and therefore, there is no question of Arbitrator to proceed in the matter. The Arbitrator considered the objection raised by the appellants and rejected the same, by holding that since in the review petition there is no specific direction for quashing the arbitral proceedings, he has jurisdiction to proceed in the matter. The Arbitrator held that recall of its earlier order passed in writ petition by the High Court in review petition would not affect, invalidate or debar him to decide the matter, in view of the minutes of the meeting dated 20.03.2008. He, therefore, proceeded further and decided the dispute and passed an award for Rs.16,77,56,010/- (Rs.13,67,421/- claim for unpaid amount; Rs.4,26,22,106, amount towards extra item, amount of Rs.11,33,56,027/- towards interest; towards overheads/administrative expenses Rs.1,04,10,456/- with pendente lite interest of 12% on the said amount of Rs.16,77,56,010/-). The said award dated 09.01.2010 passed by the sole Arbitrator was challenged by the appellants before the District Judge, Neemuch. The said award dated 09.01.2010 passed by the sole Arbitrator was challenged by the appellants before the District Judge, Neemuch. The learned District Judge dismissed the appeals vide order dated 30.07.2010 passed in Arbitration Appeal No.1/2010. Feeling aggrieved, the appellants have filed these appeals. 12. The writ petitions bearing WP No.12172/2010 and WP No.12075/2010 have been filed challenging the decision of the Arbitrator, by which their objection to the effect that in respect of Deori Somia and Barkheda villages Project there was no arbitration clause in the agreement and that there was no whisper in the order passed by the writ Court on 04.03.2008 about referring the dispute about this project to an Arbitrator, has been rejected. 13. The appellants' case is that in the absence of any arbitration clause in the agreement entered into between the parties, the Arbitrator had no jurisdiction to act as an Arbitrator. According to the appellants, the minutes of the meeting dated 20.03.2008 cannot be construed to be an arbitration clause contemplated under Section 7 of the Act of 1996. The appellants' further case is that even assuming that there was some sort of agreement for appointment of an Arbitrator, that was only on the basis of direction dated 04.03.2008 issued by the writ Court, which on passing of the order in review got completely wiped out. It is further case of the appellants that the Arbitrator had acted beyond the scope and jurisdiction as he could not have awarded any amount for the alleged extra work, in view of specific prohibitory clause contained in the agreement. According to the appellants', the Arbitrator could not have recorded the findings contrary to the findings recorded by the learned Single Judge in review petition. It is urged that while deciding the matter, the Arbitrator has violated the principles of natural justice. It has been contended by the appellants that reliance of the Arbitrator and the learned District Judge on the minutes of the meeting dated 20.03.2008 is wholly misconceived, in view of the fact that once the order passed by the writ Court on 04.03.2008 in WP No.5787/2007 was recalled on 23.07.2009 in Review Petition No.14/2008, the so-called decision about appointment of Arbitrator, assuming to be taken, stood wiped out as the legal existence of any such decision or act was inextricably linked with the continued existence of such order. The appellants contended that the Arbitrator and the learned District Judge were duty bound to have given effect to consequences, which would naturally flow from the order of the review. According to the appellants, the Arbitrator and the learned District Judge have committed gross error in holding that the Arbitrator was having jurisdiction to proceed in the matter because in the order of review, the proceeding of the meeting of minutes dated 20.03.2008 were not quashed. It is also contended that Shri Justice (Retd.) P.C. Agrawal was not appointed as the sole Arbitrator in the meeting dated 20.03.2008, and therefore, only on the basis of the minutes of the meeting dated 20.03.2008, he could not have usurped the jurisdiction and proceeded in the matter. According to the appellants, assuming of the jurisdiction unilaterally as Arbitrator by Shri Justice (Retd.) P.C. Agrawal, is illegal, without jurisdiction and totally outside the purview of the Act of 1996. 14. On the other hand, the case of the first respondent M/s. Dewas Udyog is that the learned Arbitrator has committed no illegality in holding that he has jurisdiction to pass an award, in view of the decision taken by the parties in the meeting held on 20.03.2008. The first respondent supported the decision of the Arbitrator as also of the learned District Judge. According to the first respondent, in view of the letter of Chairperson of the appellants Zila Panchayat, there was an admission to the effect that the first respondent has executed extra work. In the circumstances, an opinion of the Government Advocate was sought, who suggested names of two Arbitrators, including Hon'ble Shri Justice P.C. Agrawal. Since the amount, which was claimed by the first respondent was not paid by the appellants in respect of Khan Khedi Project, Writ Petition No.5787/2007 was filed before this Court. Learned Single Judge of this Court issued directions on 04.03.2008. Thereafter, a meeting was held between the parties on 20.03.2008, in which it was resolved that the dispute arising between the parties in respect of all three irrigation schemes shall be referred to either of the two Arbitrators, namely, Hon'ble Shri Justice P.C. Agrawal (Retired) and Hon'ble Shri Justice K.L. Israni (Retired). Hon'ble Shri Justice K.L. Israni having left for his heavenly abode, a request was made by the first respondent to the remaining Arbitrator Shri Justice (Retd.) P.C. Agrawal to initiate arbitration proceedings. Hon'ble Shri Justice K.L. Israni having left for his heavenly abode, a request was made by the first respondent to the remaining Arbitrator Shri Justice (Retd.) P.C. Agrawal to initiate arbitration proceedings. It is on that basis Shri P.C. Agrawal issued notice to the parties for appearance and thereafter the proceedings of arbitration took place. The said Arbitrator considered the objections raised by the appellants and had rightly rejected the same. He, thereafter, passed an award, which cannot be said to be contrary to the agreement entered into between the parties. According to the first respondent, the appellants could not make out a case for interference into the award and the order passed by the learned District Judge. It is the contention of the first respondent that in dealing with the challenge to the arbitral award, the approach of the Court should be to support the award rather than to destroy it. The challenge should be within the limited scope as provided under the Act of 1996 and the Court cannot examine the matter as an appellate Court. 15. According to the first respondent, the minutes of the meeting dated 20.03.2008 constitutes an arbitration agreement as defined under Section 7 of the Act of 1996. He argued that the Court has to translate the legislative intention, especially when viewed in the light of the object of the Act of 1996 to minimize the supervisory role of the Courts in arbitral proceedings, and therefore, the Court should not add any single requirement and should make an endeavour to uphold the arbitration agreement. While construing the arbitration agreement, the intention and conduct of the parties should be gathered from their conduct and exchange of letters, information etc. It is further contended that the meeting dated 20.03.2008 was not merely called to ensure the compliance of the order dated 04.03.2008 passed by the writ Court, but was called for the purpose of implementation of three irrigation projects. In the said meeting, apart from other issues, one of the issue, which was discussed, was in regard to the directions dated 04.03.2008. In the circumstances, according to the first respondent, the intention and conduct of the parties in the said meeting would make it clear that the parties were under an impression that there is an arbitration agreement and the meeting was to resolve the dispute, in accordance with law under the said arbitration agreement. In the circumstances, according to the first respondent, the intention and conduct of the parties in the said meeting would make it clear that the parties were under an impression that there is an arbitration agreement and the meeting was to resolve the dispute, in accordance with law under the said arbitration agreement. As regards payment of extra amount awarded by the Arbitrator, it is argued that in view of various correspondences between the parties, there was no merit in the contention of the appellants that there was prohibition from making payment for extra work. 16. We have considered the submissions made by the learned counsel for the parties and we have also gone through the annexures and record of the case. 17. It has not been disputed by the learned counsel for the parties that there is no arbitration clause in both the agreements entered into between the parties. The first respondent relied heavily on the minutes of the meeting dated 20.03.2008 to contend that in view of the definition of arbitration agreement, as provided under Section 7 of the Act of 1996, an arbitration agreement was entered into between the parties on 20.03.2008. 18. In order to appreciate, whether the aforesaid proceeding dated 20.03.2008 constitutes an arbitration agreement, it would be necessary to refer to Section 7 of the Act of 1996, which reads thus: - “7. Arbitration agreement. (1) In this Part,' arbitration agreement' means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. (2) An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement. (3) An arbitration agreement shall be in writing. (4) An arbitration agreement is in writing if it is contained in- (a) a document signed by the parties; (b) an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement; or (c) an exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other. (5) The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement if the contract is in writing and the reference is such as to make that arbitration clause part of the contract.” 19. What constitutes an arbitration clause has been dealt with by the Supreme Court in various cases. In the case of K.K. Modi v. K.N. Modi (1998) 3 SCC 573 the Supreme Court enumerated the following essentials for a valid arbitration agreement: - “(1) The arbitration agreement must contemplate that the decision of the Tribunal will be binding on the parties to the agreement, (2) that the jurisdiction of the Tribunal to decide the rights of parties must derive either from the consent of the parties or from an order of the Court or from a statute, the terms of which make it clear that the process is to be an arbitration, (3) the agreement must contemplate that substantive rights of parties will be determined by the agreed tribunal, (4) that the tribunal will determine the rights of the parties in an impartial and judicial manner, with the tribunal owing an equal obligation of fairness towards both sides, (5) that the agreement of the parties to refer their disputes to the decision of the Tribunal must be intended to be enforceable in law, and lastly, (6) the agreement must contemplate that the tribunal will make a decision upon a dispute which is already formulated at the time when a reference is made to the Tribunal.” 20. Thereafter, in the case of Bihar State Mineral Development Corporation v. Encon Builders (I) (P) Limited (2003) 7 SCC 418 , the Supreme Court listed the following as essential elements of an arbitration agreement: - “(i) There must be a present or a future difference in connection with some contemplated affair; (ii) There must be the intention of the parties to settle such difference by a private tribunal; (iii) The parties must agree in writing to be bound by the decision of such tribunal; and (iv) The parties must be ad idem” 21. In Jagdish Chander vs. Ram Chandra (2007) (5) SCC 719, the following principles in regard to what constitutes an arbitration agreement were set out by the Supreme Court: (i) The intention of the parties to enter into an arbitration agreement shall have to be gathered from the terms of the agreement. In Jagdish Chander vs. Ram Chandra (2007) (5) SCC 719, the following principles in regard to what constitutes an arbitration agreement were set out by the Supreme Court: (i) The intention of the parties to enter into an arbitration agreement shall have to be gathered from the terms of the agreement. If the terms of the agreement clearly indicate an intention on the part of the parties to the agreement to refer their disputes to a private tribunal for adjudication and an willingness to be bound by the decision of such tribunal on such disputes, it is arbitration agreement. While there is no specific form of an arbitration agreement, the words used should disclose a determination and obligation to go to arbitration and not merely contemplate the possibility of going for arbitration. Where there is merely a possibility of the parties agreeing to arbitration in future, as contrasted from an obligation to refer disputes to arbitration, there is no valid and binding arbitration agreement. (ii) Even if the words 'arbitration' and 'arbitral tribunal (or arbitrator)' are not used with reference to the process of settlement or with reference to the private tribunal which has to adjudicate upon the disputes, in a clause relating to settlement of disputes, it does not detract from the clause being an arbitration agreement if it has the attributes or elements of an arbitration agreement. They are : (a) The agreement should be in writing. (b) The parties should have agreed to refer any disputes (present or future) between them to the decision of a private tribunal. (c) The private tribunal should be empowered to adjudicate upon the disputes in an impartial manner, giving due opportunity to the parties to put forth their case before it. (d) The parties should have agreed that the decision of the Private Tribunal in respect of the disputes will be binding on them. (iii) Where the clause provides that in the event of disputes arising between the parties, the disputes shall be referred to Arbitration, it is an arbitration agreement. Where there is a specific and direct expression of intent to have the disputes settled by arbitration, it is not necessary to set out the attributes of an arbitration agreement to make it an arbitration agreement. Where there is a specific and direct expression of intent to have the disputes settled by arbitration, it is not necessary to set out the attributes of an arbitration agreement to make it an arbitration agreement. But where the clause relating to settlement of disputes, contains words which specifically excludes any of the attributes of an arbitration agreement or contains anything that detracts from an arbitration agreement, it will not be an arbitration agreement. For example, where an agreement requires or permits an authority to decide a claim or dispute without hearing, or requires the authority to act in the interests of only one of the parties, or provides that the decision of the Authority will not be final and binding on the parties, or that if either party is not satisfied with the decision of the Authority, he may file a civil suit seeking relief, it cannot be termed as an arbitration agreement. (iv) But mere use of the word 'arbitration' or 'arbitrator' in a clause will not make it an arbitration agreement, if it requires or contemplates a further or fresh consent of the parties for reference to arbitration. For example, use of words such as 'parties can, if they so desire, refer their disputes to arbitration' or 'in the event of any dispute, the parties may also agree to refer the same to arbitration' or 'if any disputes arise between the parties, they should consider settlement by arbitration' in a clause relating to settlement of disputes, indicate that the clause is not intended to be an arbitration agreement. Similarly, a clause which states that 'if the parties so decide, the disputes shall be referred to arbitration' or 'any disputes between parties, if they so agree, shall be referred to arbitration' is not an arbitration agreement. Such clauses merely indicate a desire or hope to have the disputes settled by arbitration, or a tentative arrangement to explore arbitration as a mode of settlement if and when a dispute arises. Such clauses require the parties to arrive at a further agreement to go to arbitration, as and when the disputes arise. Any agreement or clause in an agreement requiring or contemplating a further consent or consensus before a reference to arbitration, is not an arbitration agreement, but an agreement to enter into an arbitration agreement in future.” 22. Such clauses require the parties to arrive at a further agreement to go to arbitration, as and when the disputes arise. Any agreement or clause in an agreement requiring or contemplating a further consent or consensus before a reference to arbitration, is not an arbitration agreement, but an agreement to enter into an arbitration agreement in future.” 22. In the case of State of Orissa & others v. Bhagyadhar Dash (2011) 7 SCC 406 , the Supreme Court considered the various clauses and restated the essential elements of arbitration clause. 23. On giving a deep consideration as to what constitutes an arbitration agreement as defined under Section 7 of the Act of 1996 and principles set out by the Supreme Court in that regard, we find ourselves unable to agree with the submission of the learned counsel for the first respondent to hold that the minutes of the meeting dated 20.03.2008 would come within the purview of the arbitration agreement. According to us, the genesis of the meeting dated 20.03.2008 was the order dated 04.03.2008 passed in Writ Petition No.5787/2007, by which the matter was directed to be referred to an Arbitrator under the provisions of the Act of 1996 to resolve the dispute between the parties. The said order dated 04.03.2008 was passed on the wrong notion that there exists a written arbitration or clause for reference of the dispute between the parties to an Arbitrator. The said order dated 04.03.2008 having been recalled in review petition, in our considered view, on the basis of the minutes of the meeting dated 20.03.2008, which according to our considered view was essentially called in and for compliance of the directions issued by writ Court on 04.03.2008, it cannot be said that the parties have entered into the agreement for arbitration so as to cover it under the term arbitration agreement. The minutes of the said meeting dated 20.03.2008 are not independent to the direction contained in the order dated 04.03.2008. It does not stand to the test of arbitration agreement, as enumerated by the Supreme Court in the case of K.K. Modi (supra) and Bihar State Mineral Development Corporation (supra). The minutes of the said meeting dated 20.03.2008 are not independent to the direction contained in the order dated 04.03.2008. It does not stand to the test of arbitration agreement, as enumerated by the Supreme Court in the case of K.K. Modi (supra) and Bihar State Mineral Development Corporation (supra). In our considered view, on recalling of the order passed by the writ Court the said proceeding dated 20.03.2008 were wiped out and as such, on the strength of the said minutes of the meeting, the Arbitrator could not have proceeded in the matter. Thus, we are of the view, that the Arbitrator has committed gross error in observing that the order of review/recall would not come in his way to proceed in the arbitration, in view of the agreement entered into between the parties in the meeting convened on 20.03.2008. We find that the said argument was already rejected by the learned Single Judge while allowing the review petition, in the circumstances the Arbitrator was not competent to have given finding contrary to it. By doing so, the Arbitrator has violated the principle of res judicata, which also applies to the arbitration proceedings, in view of the law laid down by the Supreme Court in the case of K.V. George v. Secretary to Government (1989) 4 SCC 595 . 24. In our considered view, the learned Arbitrator and the learned District Judge have failed to understand in what context the meeting dated 20.03.2008 was convened. The very purpose as would be clear from the bare reading of the minutes of the meeting was to give effect to the order dated 04.03.2008 passed by the writ Court. It by no stretch of imagination could be said to be a meeting held independently to make agreement about referring the matter to the Arbitrator. When the order dated 04.03.2008 was recalled/reviewed by making a specific observation, as extracted above, it was not fair and just on the part of the learned Arbitrator to have proceeded in the matter. In all fairness, before proceeding in the matter, he should have directed the first respondent to seek clarification from the learned Single Judge instead of giving his own interpretation, which runs contrary to the observations made by learned Single Judge in the review petition. 25. In all fairness, before proceeding in the matter, he should have directed the first respondent to seek clarification from the learned Single Judge instead of giving his own interpretation, which runs contrary to the observations made by learned Single Judge in the review petition. 25. In the circumstances, without going into the various other grounds raised by the appellants to challenge the award, we feel that as held above in the absence of any arbitration agreement between the parties, the whole proceedings of arbitration, the award passed by the Arbitrator and the order of learned District Judge upholding the award are liable to be set aside. We accordingly set aside the same, by allowing these arbitration appeals. 26. Accordingly, the arbitration appeals are allowed. Award passed by the Arbitrator and the order passed by the learned District Judge are hereby set aside. 27. In view of the aforesaid finding, the order, which has been challenged in the writ petitions, is also quashed. The writ petitions are allowed. No order as to costs.