In Brief
NALCO, a Government enterprise, invited tenders for construction work. Subhash Infra Engineers submitted an offer which NALCO accepted and issued a work order. When the contractor later refused to proceed unless specifications were changed, NALCO appointed an arbitrator to resolve the dispute. The contractor sued in civil court to void the arbitrator's appointment, claiming no binding contract existed. The High Court granted an interim injunction restraining the arbitrator. The Supreme Court allowed NALCO's appeal, holding that tender acceptance creates a binding arbitration agreement; objections must be raised before the arbitrator, not in civil court. The Court appointed a new arbitrator after finding the original appointee had a conflict of interest.
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