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TMI Blog2002 (4) TMI 865X X X X Extracts X X X X X X X X Extracts X X X X ..... 17,23,16,160. During the execution of the contract, the petitioner raised a dispute regarding the payment of foreign exchange rate variations and the same was not accepted by the respondent/Board on the ground that the Board was not liable to pay the said amount. 2. After the dispute arose, the Board and the petitioner referred the following two issues for Arbitration namely, (1)To resolve the issue of foreign exchange rate variation and (2)Recovery of interest on unadjusted advance beyond delivery schedule. To the said disputes, the respondent/Board filed the claim petition and the petitioner has also filed their counter. 3. While the disputes were pending, their petitioner, in their letter dated 7-1-2000 addressed to the Chief Engineer/Hydro, Tamil Nadu Electricity Board, Chennai expressed their willingness to refer the following issues also to the Arbitration namely, (1) Interest on due payments delayed by TNEB beyond 15 days of receipt of material at site. (2) Extension of delivery and commissioning period without leaving of liquidated damages. (3) Increase in cost of Hydro-generating equipment and associated accessories by the Tamil Nadu Electricity Board s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1)( b ) "arbitration agreement" means an agreement referred to in section 7; 2(1)( c ) "arbitral award" includes an interim award; 2(1)( d ) "arbitral tribunal" means a sole arbitrator or a penal of arbitrators; 2(1)( h ) "party" means a party to an arbitration agreement. 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 clau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pply in writing to the Court for an order of reference ." (p. 316) While considering the power of the Trial Courts under the above section, the Apex Court has held as follows : " Two conditions must be satisfied before an application in writing for reference is made. All the interested parties to the suit must agree to obtain a reference and the subject matter of the reference must be any matter in difference between the parties in the suit. . . . " (p. 316) 11. In Union of India v. G.S. Atwal Co. [1996] (3) SCC 568, the Apex Court while considering a similar question has held as follows : "To constitute an arbitration agreement, there must be an agreement that is to say the parties must be ad idem. Arbitrability of a claim depends upon the dispute between the parties and the reference to the arbitrator. On appointment, he enters upon that dispute for adjudication. . . ." (p. 572) In the said judgment, the Apex Court also referred a paragraph from Law of Arbitration by Justice Bachawat (2nd Edn. 1987) at page 90, which reads as follows : "...that jurisdiction of the arbitrator is solely derived from the Arbitration agreement. The arbitrator has jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rson or persons. 15. In this case, the dispute arose out of the contract between the petitioner and the respondent/Board. It is well settled in law that in the matter of contract, parties are bound by the terms and conditions of the contract, their rights and liabilities shall also be determined by the Courts or by the Arbitral Tribunal as in this case, only in consonance with the terms and conditions of the contract. It is equally well settled law that in the matter of contract, writ petitions under Article 226 are not entertained as a matter of course. Mr. T.V. Ramanujam, learned Senior Counsel appearing for the petitioner would contend that the respondent/Board is an instrumentality of the State and it has an obligation to get all disputes arise out of the same contract settled instead having some of the disputes resolved by arbitration and approaching the Courts for adjudication of remaining disputes by spending enormous money. He would also submit that by referring all the disputes to the arbitrator, considerable time also would be saved in resolving the disputes. Though the said argument may be persuasive, I am unable to accept the same in view of the law laid down by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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