1. An important question of law raised in this petition filed under Section 11 of the J&K Arbitration and Conciliation Act, 1997 (for brevity `the Act') is whether the Chief Justice or his nominee acquire the power to nominate an independent arbitrator on the failure of the party to discharge its obligation of appointing an arbitrator in terms of the arbitration clause, 30 days after issuance of notice and after filing of a petition before Chief Justice. In other words, whether a party would forfeit its right of nominating an arbitrator after expiry of thirty days period from the date of issuance of notice and after filing of petition invoking the jurisdiction of the Chief Justice under Section 11 of the Act. 2. On the aforesaid issue law is well settled and is no longer res Integra. The principle of law appears to have been settled by Hon'ble the Supreme Court in the case of Datar Switchgears Limited v. Tata Finance Ltd. and Anr. (2000) 8 SCC 151 . In para 19 of the judgment the following dictum has been propounded which reads thus:- "So far as cases falling under Section 11(6) are concerned such as the one before us-no time-limit has been prescribed under the Act, whereas a period of 30 days has been prescribed under Section 11(4) and Section 11(5) of the Act. In our view, therefore, so far as Section 11(6) is concerned, if one party demands the opposite party to appoint an arbitrator and the opposite party does not make an appointment within 30 days of the demand, the right to appoint does not get automatically forfeited after expiry of 30 days. If the opposite party makes an appointment even after 30 days of the demand, but before the first party has moved the court under Section 11, that would be sufficient. In other words, in cases arising under Section 11(6), if the opposite party has not made an appointment within 30 days of demand, the right to make appointment is not forfeited but continues, but an appointment has to be made before the former files petition under Section 11 seeking appointment of an arbitrator. Only then the right of the opposite party ceases. Only then the right of the opposite party ceases. We do not, therefore, agree with the observation in the above judgments that if the appointment is not made within 30 days of demand, the right to appoint an arbitrator under Section 11(6) is forfeited." 3. A bare perusal of the aforesaid para makes it patent that if a party demands the opposite party to appoint an arbitrator under Section 11 (6) of the Act and the appointment is not made within 30 days of demand, the right to make appointment is not forfeited but continues. However, still the appointment has to be made before petition is filed by an aggrieved party under Section 11 of the Act seeking appointment of an arbitrator. On the filing of the petition the right to make appointment of the arbitrator ceases. The aforesaid view has been followed and applied by a three Judge in the case of Punj Lioyd Ltd. v. Petronet MHB Ltd. (2006) 2 SCC 638 . Approving the dictum of para 19 of the judgment in Datar Switchgears Ltd, (supra), their Lordships of Hon'ble the Supreme Court held that the Judge designated by the Chief Justice committed error by refusing to appoint the arbitrator and relegating the aggrieved party to the remedy of approaching the named arbitrator, namely, Functional Director, who would have adjudicated on the dispute as a sole arbitrator. In the light of observations made in para 19 of the judgement in Datar Switchgears Ltd. (supra), their Lordships sent the matter back to the Chief Justice for fresh decision for appointment of an arbitrator. These decisions have been reiterated in a number of later judgments rendered in the cases of Union of India v. Bharat Battery Mfg. Co.(P) Ltd. (2007) 7 SCC 684 and SBP and Co. v. Patel Engineering Ltd. and anr. (2005) 8 SCC 618 . These decisions have been reiterated in a number of later judgments rendered in the cases of Union of India v. Bharat Battery Mfg. Co.(P) Ltd. (2007) 7 SCC 684 and SBP and Co. v. Patel Engineering Ltd. and anr. (2005) 8 SCC 618 . In para 35 of the judgment rendered in Patel Engineering Ltd. (supra) the judgment of Hon'ble the Supreme Court in Datar Switchgears Ltd. (supra) has been explained and it has been held that the Chief Justice of the High Court was bound to exercise powers and appoint the arbitrator because the failure on the part of the party which was obliged to appoint an arbitrator within 30 days of the receipt of the notice would hot result into forfeiture of its right on The expiry of 30 days but the forfeiture would start operating on fie filing of the petition under Section 11 of the Act by the other side. In para 35 the Bench of two Judges highlighted the case of Datar Switchgears Ltd (supra) that when the parties have entered into a contract and settled on a procedure then due importance has to be accorded to such procedure. Citing para 23 of the judgment in Datar Switchgears Ltd's case (supra) it was highlighted that effort should be made by the Court to respect the terms of the contract entered into between the parties and endeavour given to it to effect it. 4. The aforesaid view has also been applied by his Lordship of the Supreme Court in Denel (Proprietary) Limited v. Ministry of Defence, (2012) 2 SCC 759 . Applying the principle laid down in para 19 of the judgment in Datar Switchgears Ltd. (supra) their Lordships proceeded to hold that after the filing of the petition under Section 11 of the Act by the aggrieved party the right to appoint an arbitrator by the other side ceases. 5. Emergence of another principle, inter play of Section 11 (6) and 11(8): In the case of Denel (Proprietary) Ltd. (supra) his Lordship relied and highlighted the view taken by a three-Judge Bench of Hon'ble the Supreme Court in Northern Railway Admn, Ministry of Railways v. Patel Engg. Co. Ltd (2008) 10 SCC 240 . Approving para 12 of the judgment their Lordships proceeded to examine as to whether the facts in that case would warrant appointment of an independent arbitrator. Co. Ltd (2008) 10 SCC 240 . Approving para 12 of the judgment their Lordships proceeded to examine as to whether the facts in that case would warrant appointment of an independent arbitrator. The view taken in the earlier Supreme Court judgment rendered in the case of Indian Oil Corporation Limited v. Raja Transport (P) Ltd. (2009) 8 SCC 520 has been cited with approval which highlights the importance of Section 11(8) of the Act. It would be opposite to cite 45 of the judgment in Indian Oil Corporation Limited's case (Supra) in ex tenso:- "45. If the arbitration agreement provides for arbitration by a named arbitrator, the courts should normally give effect to the provisions of the arbitration agreement. But as clarified by Northern Railway Admn., where there is material to create a reasonable apprehension that the person mentioned in the arbitration agreement as the arbitrator is not available, then the Chief, Justice or his designate may, after recording reasons for not following the agreed procedure of referring the dispute to the named arbitrator, appoint an independent arbitrator in accordance with Section 11(8) of the Act. [In other words, referring the disputes to the named arbitrator shall be the rule. The Chief Justice or his designate will have to merely reiterate the arbitration agreement by referring the parties to the named arbitrator or named Arbitral Tribunal. Ignoring the named arbitrator/ Arbitral Tribunal and nominating an independent arbitrator shall be the exception to the rule, to be resorted for valid reasons."] (Emphasis added) 6. The principle discussed above can be summarized as follows:- (A) If one party demands the opposite party to appoint an arbitrator as per the agreed arbitration clause and if the opposite party fails to appoint arbitrator within 30 days of demand made by the other party then the right to appoint arbitrator does not get automatically forfeited after the expiry of 30 days of the demand. However, the right to appoint an arbitrator by such a party stands forfeited after the aggrieved party has moved the Court under Section 11 of the Act. (B) In view of law laid down by a three-Judge Bench of Hon'ble the Supreme Court in Patel Engineering Co. Ltd (supra), the principle which emerges is that according to the scheme of Section 11 of the Act emphasis has been laid on upholding the terms of the agreement. (B) In view of law laid down by a three-Judge Bench of Hon'ble the Supreme Court in Patel Engineering Co. Ltd (supra), the principle which emerges is that according to the scheme of Section 11 of the Act emphasis has been laid on upholding the terms of the agreement. The sanctity of contractual terms must be adhered to and given effect as closely as possible. In other words the Court may ask to do what has not been done as per the terms of agreement. The Court must first ensure that remedies provided for are exhausted. It is not mandatory for the Chief Justice or his nominee to appoint the named arbitrators. But at the same time due regard has to be given to the qualifications required by the agreement and other considerations including the one detailed in Section 11 (8) of the Act. 7. Having considered and extracted the aforesaid principles it would now be necessary to notice the facts of the present case so as to apply the aforesaid principles. 8. The State Government adopted the policy of public private partnership for operating the business of Government Corporations/companies and constituted a committee for adopting the said policy with the State Forest Corporation. After completing procedural formalities with the State Forest Corporation, an agreement was executed between the petitioner and the Corporation on 14.02.2011(Annexure-E). Before execution of the agreement, the Managing Director of the Corporation issued an order on 28.01.2011 requiring the petitioner to furnish Performance Guarantee of Rs. 10.00 lacs in favour of the Managing Director of the Corporation and third party counter guarantee was also required to be furnished in terms of clause 2 of the said order (Annexure-F). In the said agreement public private partnership (PPP) arrangements were concluded between the parties for an initial period of 18 months in the first instance, which was extendable for a longer term. As per the terms of the agreement the Corporation was bound to make available quantity of raw material in the factory premises of the petitioner in respect of six quarters as per the following table:- "1. 1st. Quarter = 15,000 cft per month 2. 2nd quarter = 20,000 cft per month 3. 3rd quarter = 25,000 cft per month 4. 4th quarter = 30,000 cft per month 5. 5th quarter = 30,000 cft per month 6. 6th quarter = 30,000 cft per month" 9. 1st. Quarter = 15,000 cft per month 2. 2nd quarter = 20,000 cft per month 3. 3rd quarter = 25,000 cft per month 4. 4th quarter = 30,000 cft per month 5. 5th quarter = 30,000 cft per month 6. 6th quarter = 30,000 cft per month" 9. The aforesaid table would show that the Corporation was bound to make available 10,50,000 Ctfs of timber in the factory premises of the petitioner which was to be utilized for woodwork and its conversion into finished products of joinery items/products. A further arrangement has been stipulated in clause 7 of the agreement. According to the stipulation made in clause 12, the petitioner was entitled to share 25% of the receipt of the finished goods and 75% had to be shared by the Corporation (Annexure-E). 10. The agreement also stipulated arbitration in clause 18 which is in the following terms:- "18. Arbitration: Any disputes arising out of, or relating to this Agreement, shall be referred for arbitration to the Hon'ble Chairman J&K State Forest Corporation, who may conduct the arbitration himself, or may nominate any officer of the Government to conduct arbitration. The decision of the Arbitrator shall be final and finding upon the parties." 11. A perusal of the aforesaid clause makes it patent that in case of any dispute matter is required to be referred to the Chairman of the Corporation, who could himself conduct arbitration proceedings or could nominate any officer of the Government to conduct the arbitration. 12. The petitioner has handed over his complete unit to the Corporation on 25.02.2011. The Corporation constituted a management committee for implementing the agreement and the committee decided that 90,000 Cft timber would be allotted to the newly created division of the petitioner company during the period 2011-12. The supply was to start w.e.f. 01.04.2011. Accordingly, the petitioner was asked to give his consent for the schedule of the supply as per requirement of clause 7 of the agreement. Accordingly, he gave his expressed consent on 02.08.2010. 13. It is alleged that the Corporation failed to supply the timber to the petitioner- factory. The timber as per stipulation and the details of supply have been shown in document (Annexure-l). A similar document has been prepared by the Divisional Manager State Forest Corporation (Annexure-J). Accordingly, he gave his expressed consent on 02.08.2010. 13. It is alleged that the Corporation failed to supply the timber to the petitioner- factory. The timber as per stipulation and the details of supply have been shown in document (Annexure-l). A similar document has been prepared by the Divisional Manager State Forest Corporation (Annexure-J). The petitioner claims that the detailed sheet prepared by the Divisional Manager would depict that rotten, diseased and low quality timber was made available in division of the petitioner-factory which adversely affected execution of the agreement. 14. It is further pleaded that on 23.06.2011, the Divisional Manager reported to the Chief General Manager that only 10,137 cft of timber was provided to the said division starting from 14.02.2011. It was also pointed out that the major part of the said timber was rotten. It has been alleged that the schedule of supply stipulated between the parties as per Clause 7 of the agreement stood grossly violated. The Divisional Manager asked the Chief General Manager to provide the material as early as possible so that the obligation undertaken in the agreement could be performed and implemented (Annexure-L). The petitioner alleged that the timber was diverted for construction of Panchayat Ghars in rural areas as is clear from the averment made in para 9 and during the period of one and half year 45000 cft of timber only was made available which was rotten and diseased. Therefore, the allegation is that there is patent violation of clause 7 of the agreement and the petitioner has suffered huge loss worth crores. The respondent-Corporation was bound to execute and complete the work within 18 months. The petitioner has claimed that it would be entitled to recover the losses and also claim execution of work to the extent of agreed quantity in terms of the agreement. To that effect he approached the Chairman of the Corporation. 15. On account of the apathy displayed by the respondents, the petitioner issued a notice to the respondents on 15.11.2012 (Annexure-Q) in terms of clause 18 for appointment of an arbitrator, within a period of thirty days as has been agreed between the parties. The respondents failed to appoint the arbitrator within the stipulated period of thirty days and even thereafter to resolve the dispute which has arisen between the parties on account of non-performance of the contract on the part of the Corporation. The respondents failed to appoint the arbitrator within the stipulated period of thirty days and even thereafter to resolve the dispute which has arisen between the parties on account of non-performance of the contract on the part of the Corporation. As a consequence of the failure, the petitioner has been forced to file the instant petition on 15.05.2013. However, during the pendency of the instant petition, the Additional Secretary to Government, Forest Department has now constituted an Arbitral Tribunal vide order dated 10.06.2013 for arbitration comprising three officers. A copy of the order is taken on record as Annexure-X. 16. The aforesaid facts have not been disputed by the respondents nor have any objections been filed. However, Mr. Javed Iqbal, learned counsel for the corporation has taken the stand that once an Arbitral Tribunal has been constituted on 10.06.2013 (Annexure-X), then the instant petition for appointment of arbitrator under Section 11 of the Act is rendered infructuous. 17. From the aforesaid facts it is patent that in pursuance of Clause 18 the petitioner issued a notice to the respondents on 15.11.2012 (Annexure Q) to appoint an arbitrator within a period of 30 days. However, the arbitrator could not be appointed. The period of 30 days expired on 15.12.2012. Even after the expiry of 30 days the arbitrator could not be appointed which resulted in filing of AA no. 7 of 2013 on 15.05.2013. The arbitrator was appointed only after receipt of notice of the instant petition on 10.06.2013 (Annexure-X). By adopting the principle extracted in para 6 (A) above, it is patent that the respondents have lost the right to appoint the arbitrator after filing of the instant petition on 15.05.2013. 18. The question then is whether in the facts and circumstances of the present case and keeping in view the principle `B' extracted in para 6 of this judgment, an independent arbitrator should be appointed or direction should be issued to the authorities named in Clause 18 to appoint the arbitrator or to accept the appointment already made on 10.06.2013 (Annexure-X). 19. The aforesaid issue would necessitate challenge to the order dated 10.06.2013 (Annexure X) which has been passed during the pendency of the instant petition. 19. The aforesaid issue would necessitate challenge to the order dated 10.06.2013 (Annexure X) which has been passed during the pendency of the instant petition. This order has not been the subject matter of challenge and obviously there are no pleadings disclosing that the arbitrators appointed by the Chairman of the Corporation may suffer any bias being subordinate to the appointing authority or that they would not 10.06.2013 no such findings could be recorded nor any possibility could be explored to give effect to the terms of arbitration agreement as stipulated in clause 18 or to nominate an independent arbitrator. The proper course, to my mind, in these circumstances is to leave it open to the petitioner to challenge the order dated 10.06.2013 (Annexure-X) on any available ground in accordance with law. 20. Accordingly the petition is disposed of by answering question extracted at para 6(A) above and leave it open to the parties to challenge the order dated 10.06.2013 in view of the principle extracted in para 6(B). 21. The petition stands disposed of.