The arbitration clause, Clause 9.0.0.0, outlines the conditions under which disputes can be referred to arbitration. It specifies that disputes arising from the contractor's notified claims included in the final bill, as per Clause 6.6.3.0, must be addressed by a sole arbitrator. Notably, the clause allows the owner to counter-claim if the contractor's notified claims are brought to arbitration.

However, Clause 9.0.2.0 explicitly excludes certain matters from arbitration, including the existence of the arbitration agreement and whether a claim is classified as a notified claim. Such matters must be resolved by the General Manager of the respondent before arbitration can proceed.

The petitioner submitted its final bill on October 19, 2022, but upon receiving an incomplete payment, a dispute arose. On May 16, 2023, the petitioner issued a notice under Section 21 of the Arbitration and Conciliation Act, seeking arbitration for the unresolved claims. The respondent contested the arbitrability of these claims, asserting that they had not been notified by the General Manager, as required by the contract.

Subsequently, the petitioner approached the court under Section 11(6) of the Act for arbitration referral. On February 15, 2024, the court noted the respondent's objection regarding the lack of a decision from the General Manager on the notified claims. The petitioner was permitted to represent its case to the GM, who ultimately ruled that the claims were not notified.

The respondent's counsel argued that without a decision from the GM, the claims could not be arbitrable, referencing the Supreme Court's ruling in IOCL v. NCC Ltd (2023). This ruling emphasized that only notified claims included in the final bill can be referred to arbitration, and disputes regarding their notified status fall outside the arbitrator's jurisdiction.

However, the petitioner’s counsel cited a subsequent three-judge bench decision in SBI General Insurance Co. Ltd v. Krish Spinning (2024), which appeared to limit the court's role in examining arbitrability. The court clarified that only the existence of an arbitration agreement and the timeliness of the petition should be assessed at the referral stage, leaving other disputes for the arbitral tribunal to resolve.

The court ultimately recognized the existence of an arbitration clause and appointed an eminent judge as the arbitrator to resolve the dispute, allowing both parties to argue the arbitrability of the claims before the tribunal. This case underscores the importance of clear contractual terms and the procedural complexities that can arise in arbitration agreements.

As the arbitration proceedings move forward, both parties remain poised to challenge the issues of arbitrability and notified claims, reflecting the evolving landscape of dispute resolution in construction contracts.