In Brief
The South Delhi Municipal Corporation entered into a toll collection agreement with SMS AAMW Tollways Private Ltd., which included a dispute resolution clause (Clause 16.3) allowing the contractor to appeal an adverse decision to the Commissioner. SMS AAMW sought appointment of an arbitrator under the Arbitration and Conciliation Act, arguing Clause 16.3 contained an arbitration agreement. The High Court appointed an arbitrator. The Supreme Court held that Clause 16.3 provides only for a departmental appeal by the dissatisfied contractor to a superior officer—not an arbitration agreement. An arbitration agreement requires both parties' consent and an impartial arbitrator; here, only one party could invoke the clause. The Court set aside the appointment order and dismissed the petition.
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