ORDER : 1. By way of this application under Section 11(6) of the Arbitration and Conciliation Act, 1996 (‘the Act of 1996’), the petitioner has made the request for appointment of an Arbitrator to adjudicate upon and decide all its disputes with the respondents, arising out of, and relating to, the Contract Agreement dated 31.03.2012. 2. It is the case of the petitioner that it had entered into a Contract Agreement dated 31.03.2012 for the work of ‘Resurfacing of Runway in Aerodrome area at HAL Airport, HAL (Bengaluru Complex)’ with the respondents. The respondents issued the Work Order dated 29.04.2013 stipulating the date of completion as 14.01.2014. The petitioner executed and completed the work on 31.12.2013 and the respondent No.4 issued completion certificate on 20.02.2014. After receipt of respondent’s letter dated 04.04.2015 intimating the approval of the final deviation order, the petitioner submitted its final bill dated 30.05.2015, claiming a sum of Rs.1,27,13,608/- including interest of Rs.19,04,756/- up to date, excluding the retention money of Rs.69,77,057/-, which was refundable after end of the defect liability period. The petitioner also claimed the refund of EMD amount of Rs.10,70,000/-. 3. It is submitted that with the expiry of the defect liability period on 31.12.2016, the petitioner, by its letter dated 02.01.2017, requested for release of security deposit and other amount payable as per the earlier letter dated 30.05.2015. It is alleged that on 05.05.2017, the respondent No.3 insisted upon the petitioner to withdraw the claim of interest and compensation from the final bill as a precondition to process the final bill, to which the petitioner did not agree. The respondent No.3, by his letter dated 12.05.2017, replied that the delay in payment of bills was only due to noncompliance of contractual obligations by the petitioner. It is submitted that the petitioner, by its letter dated 02.02.2018, again requested the respondent No.2 to release the amount due without insisting on the petitioner to surrender its right to claim interest. 4. It is further submitted that since the respondents failed to perform their obligations as per agreement, the petitioner served legal notice to the respondents on 04.05.2018 calling upon them to comply with the demand contained in the letter dated 02.02.2018, failing which arbitration proceedings would be initiated. It is pointed out that the respondents replied on 01.06.2018, through their advocate, denying all the claims. 5. It is pointed out that the respondents replied on 01.06.2018, through their advocate, denying all the claims. 5. In view of the above, the petitioner has preferred this application seeking appointment of an independent Arbitrator for adjudication of its disputes with the respondents arising out of and relating to the aforesaid Contract Agreement dated 31.03.2012. The petitioner has also submitted that in view of the amendment to the Act of 1996 by the Amendment Act of 2015, the Manager, Director or any person who is a part of the management of the respondent or having controlling influence in the management, is ineligible to be appointed as an Arbitrator and hence, an independent Arbitrator deserves to be appointed by this Court. 6. Learned counsel for the respondents has endeavored to argue that in view of provisions contained in sub-section (5) of Section 12 of the Act of 1996, the Managing Director or the Manager or the Company may not be considered eligible to act as an Arbitrator in the matter and the same had been the assertion of the petitioner in its notice dated 04.05.2018 as also in this petition. Therefore, according to learned counsel for the respondent, the entire arbitration clause is invalidated and it cannot be said that there exists an arbitration agreement between the parties. 7. Having heard learned counsel for the parties and having perused the material placed on record, this Court is clearly of the view that on the contentions urged by the parties and with reference to the law applicable, for the ineligibility of the officer of the respondent company to act as an Arbitrator, the entire arbitration agreement is not invalidated; and it cannot be said that there does not exist an arbitration agreement between the parties. The agreement between the parties distinctly provides for resolution of the disputes through the mechanism of arbitration. The arbitration agreement, as contained in Clause 33, reads as under: “33. The agreement between the parties distinctly provides for resolution of the disputes through the mechanism of arbitration. The arbitration agreement, as contained in Clause 33, reads as under: “33. ARBITRATION: Except where, otherwise provided for in the contract, all questions and disputes relating to the meaning of the specifications, designs, drawings and instructions herein before mentioned and 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 of or relating to the contract, designs drawings to the specifications, estimates, instructions, orders or these conditions or otherwise concerning the works, or the execution or failure to execute, the same whether arising during the progress of the work or after the completion or abandonment thereof shall be referred to the sole arbitration of the Managing Director/General Manager and if the Managing Director/General Manager is unable or willing to act, to the sole arbitration of some other persons appointed by the Managing Director/General Manager willing to act as such Arbitrator. The Arbitrator to whom the matter is originally referred being transferred or vacating his office or being unable to act for any reason, such Managing Director/General Manager as aforesaid at the time of such transfer, vacation of office or inability to act, shall appoint another person to act as arbitrator in accordance with the terms of the contract. Such person shall be entitled to proceed with the reference from the stage at which it was left by his predecessor. (a) Subject as aforesaid the provision of the Arbitration and Conciliation Act, 1996, or any statutory modification or re-enactment thereof and the rules made thereunder and for the time being in force shall apply to the arbitration proceeding under this clause. (b) It is a term of the contract that the party involving arbitration shall specify the dispute or disputes to be referred to arbitration under this clause together with the amount or amounts claimed in respect of each such dispute. (c) The arbitrator (s) may from time to time with consent of the parties enlarge the time, for making and publishing the award. (d) The work under the contract shall, if reasonably possible, continue during the arbitration proceedings and no payment due or payable to the contractor shall be withheld on account of such proceedings. (c) The arbitrator (s) may from time to time with consent of the parties enlarge the time, for making and publishing the award. (d) The work under the contract shall, if reasonably possible, continue during the arbitration proceedings and no payment due or payable to the contractor shall be withheld on account of such proceedings. (e) The Arbitrator shall be deemed to have entered on the reference on the date he issues notice to both the parties fixing the date of the first hearing. The arbitrator shall give a separate award in respect of each dispute or difference referred to him. (f) The venue of arbitration shall be such place as may be fixed by the Arbitrator in his sole discretion. (g) The award of the arbitrator shall be final, conclusive and binding on both the parties to the contract.” 8. As regards ineligibility of certain persons to be appointed as Arbitrator, sub-section (5) of Section 12 of the Act of 1996 reads as under: “Notwithstanding any prior agreement to the contrary, any person whose relationship, with the parties or counsel or the subject-matter of the dispute, falls under any of the categories specified in the Seventh Schedule shall be ineligible to be appointed as an Arbitrator Provided that parties may, subsequent to disputes having arisen between them, waive the applicability of this sub-section by an express agreement in writing.” 9. As per clause 5 of the Seventh Schedule to the Act of 1996, the Manager or Director or any person who is part of the Management or having similar controlling influence is to be treated as a person having such relationship with the party concerned as to be ineligible to be appointed as an Arbitrator. 10. The net effect of the aforesaid provisions in the present matter is that under the agreement in question, the Managing Director or the General Manager of the respondent No.1 Company may not be the persons eligible to be appointed as Arbitrators. 10. The net effect of the aforesaid provisions in the present matter is that under the agreement in question, the Managing Director or the General Manager of the respondent No.1 Company may not be the persons eligible to be appointed as Arbitrators. However, that does not take away the substance of the matter that the parties under the agreement aforesaid have consciously provided that all the questions and disputes, relating to the meaning of the specifications, designs, drawings and instructions and as to the quality of workmanship or materials used on the work or any other question, claim, right, matter or thing whatsoever arising out of or relating to the contract, are to be referred to arbitration. 8. Sub-section (5) of Section 12 ibid. would only render the Managing Director and the Manager ineligible to act as Arbitrator, but it is too far-stretched to suggest that because of their ineligibility, the entire of the arbitration clause itself perishes or is rendered nugatory. Such an argument on behalf of the respondents deserves to be, and is, rejected. 9. From the material placed on record, it is evident that the petitioner issued notice proposing to initiate arbitration proceedings but, the respondents did not take steps for appointment of Arbitrator as required by the aforesaid arbitration agreement between the parties. 10. When the parties stand at conflict and the disputes do exist, which have not been resolved; and for the reason of failure of the procedure for appointment of Arbitrator, it is just and proper that an independent arbitrator be appointed to adjudicate upon and decide the disputes between the parties, including their claims, counter claims and objections. 11. Now, learned counsel for the parties have fairly agreed to the appointment of a Former Judge of this Court, namely, Hon’ble Shri Justice B.S.Patil, to act as an Arbitrator to resolve the disputes between the parties under the provisions of the Act of 1996, as per the Rules governing the Arbitration Centre at Bengaluru. 12. Accordingly, this petition is disposed of by appointing Hon’ble Shri Justice B.S.Patil, a Former Judge of this Court, to enter into the said reference and to act as an Arbitrator in the present case in the Arbitration Centre, Bengaluru, as per the Rules governing the said Arbitration Centre. 13. 12. Accordingly, this petition is disposed of by appointing Hon’ble Shri Justice B.S.Patil, a Former Judge of this Court, to enter into the said reference and to act as an Arbitrator in the present case in the Arbitration Centre, Bengaluru, as per the Rules governing the said Arbitration Centre. 13. In the interest of justice, it is made clear that the Arbitrator shall adjudicate upon and decide all the disputes between the parties including their claims, counter claims and objections relating to the agreement in question. The requirements of the Arbitration and Conciliation Act, 1996, [as amended by the Arbitration and Conciliation (Amendment) Act, 2015], shall be complied with by all the concerned. 14. Needless to observe that all the questions arising between the parties in this matter shall remain open for determination in the arbitration proceedings. 15. A copy of this order be sent to the Arbitration Centre, Khanija Bhavan, Bengaluru, for proceeding further in the matter on administrative side and also to Hon’ble Shri Justice B.S.Patil, on the address available with the said Arbitration Centre, Bengaluru.