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3. The contractor applied for the appointment of an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 and an engineer was appointed sole arbitrator by an order of September 26, 2002. In the counterstatement filed by the petitioner herein it challenged the jurisdiction of the arbitrator on the following lines:

Para A-1: Arbitral jurisdiction is governed by arbitral agreement as per Section 28 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act) and such agreement exists in the present case as per the contract. The General Condition of Contract of Eastern Railway of 1969, subsequently updated and published during 2001 (hereinafter referred to as the GCC) forms integral part of the contract. The arbitral agreement is detailed under Clause 63 and 64 of the said GCC. The Claimant was required to submit details of his disputes/claims for consideration of the Respondent within 120 days of such submission before formally demanding appointment of arbitrator from the General Manager of the Eastern Railway as per Clause 64(1)(i) of the said GCC. However, the Claimant approached the Honble Calcutta High Court for appointment of arbitrator under Section 11 of the said Act. Consequently, you, the Learned Arbitrator, were appointed as the Sole Arbitrator by the Court in contravention of the arbitral agreement and in contravention of Sections 11(2), 11(6)(a) and 8 of the said Act. Moreover, since the claim amount in the present case is more than Rs. 10 lakh, a panel of arbitrators should have been appointed as per Clause 64(3)(a)(ii) of the said GCC and Section 10 of the said Act. However, you have been appointed as the Sole Arbitrator in contravention to the above. Similarly, the arbitral agreement provides for qualification of arbitrator as per Clause 64(3)(a)(ii) of the said GCC but you do not posses such qualification. The Court did not consider this in contravention of Section 11(8) of the said Act, while appointing you, the Learned Arbitrator. In view of above, your appointment is illegal and you are, therefore, requested to adjudicate on the above issues under Section 12 of the said Act.
This is a question of competence of the forum. If the forum is incompetent than it has no jurisdiction to decide the matter and this will go to the root of the matter. It is well settled that even a right decision by a wrong forum is no decision

6. Such order of July 5, 2002 was carried in an appeal which was allowed after a detailed discussion of the law on the point with the following order:

With regard to the other contention as regards the meaning of the word qualification, we find that anything which qualifies a person is his qualification. In view of the factual background of the present case in the agreement between the parties when it is stated that the arbitrator must be a gazetted railway officer, it appears to be a qualification of the Arbitrator which was agreed to between the parties. We do not find any reason for accepting the contention of the appellant that the word qualification restricted only to the academic or professional qualification. A designation also can be a qualification of an Arbitrator. The same is the position with regard to pay scale. We also find that in a given case there can be reason for prescribing a designation of the Arbitrator particularly when dispute required to be resolved by such Arbitrator and involves an authority of the same organisation and it is required to ensure that the Arbitrator should be a higher authority. We also take note of the fact that dictionary meaning of the word qualification includes a standard necessary to do a job. Designation being one of such standard also come within the qualification. Therefore, the expression gazetted railway officer, in our opinion, is a qualification which the parties agreed to, as a requirement for an arbitrator. In view of such findings, the appellants contention is not accepted.
But as we have already held hereinabove that the Honble Chief Justice is not bound strictly to appoint an Arbitrator who must have a qualification as agreed to between the parties, and therefore, the learned Arbitrator appointed by the Honble Chief Justice though is not having the said qualification, but his appointment has not been rendered invalid thereby.

7. The Division Bench judgment of this Court was assailed before the Supreme Court where relying on a passage from the judgment reported at (2004) 10 SCC 504 (Union of India and Anr. v. M.P. Gupta), a challenge to an appointment at a pre-reference stage, the Supreme Court held that the matter was covered by the dictum in the M.P. Gupta case. The order passed by the Division Bench was set aside, the order of the learned Single Judge was restored and the railways were directed to appoint an arbitrator in terms of the relevant clause.

13. The principal challenge now put forth is under Clause 63(3)(a)(iii) which did not find mention in the counter-statement at all. Even if the technicality is overlooked, it is evident from the counter-statement that the ground of challenge now being canvassed was not urged before the arbitrator. It is one thing to suggest that the procedure under the arbitration agreement was not followed and that the arbitrator did not possess the desired qualification, but quite another to suggest that upon agreed procedure not being adhered to, the arbitration agreement stood extinguished altogether. A challenge on such ground as the arbitration agreement being extinguished, is quite distinct from a challenge as to the arbitrator not possessing the requisite qualification and the agreed procedure not being followed. In the first case it is an assertion of complete lack of jurisdiction, in the other cases it is one of irregular assumption of jurisdiction.