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1. In this petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act') seeking to impugn the Appellate Award dated 16.04.2012 passed by the Law Secretary, Govt. of India cum Appellate Authority under Permanent Machinery of Arbitration (PMA).

2. Facts of the case are that on 13.11.1991 a contract for lumpsum value of Rs. 46,94,13,000/- (Rupees Forty Six Crores Ninety Four Lacs Thirteen Thousand only) for design, manufacture, supply and delivery at site of plant and equipment and steel structures etc. was awarded by the petitioner to the respondent. It is noteworthy that both the parties are public sector undertakings. As disputes arose between the parties, the petitioner was compelled to lodge its claims before the Joint Secretary, Ministry of Heavy Industries and Public Enterprises, who was appointed as the Sole Arbitrator as per the scheme of Permanent Machinery of Arbitration. The said Sole Arbitrator is stated to have passed Award dated 16.05.2011. The respondents filed an appeal before the appellate authority under the Permanent Machinery of Arbitration. The appellate authority has now passed the alleged impugned award. Hence, the present petition.

"4. Since, the parties are Central Public Sector Enterprises, the arbitration clause in the contract dated 13.11.1991 was substituted by an arbitration agreement, as per the draft annexed to the Office Memorandum (hereafter „OM‟) dated 22.01.2004, for resolution of their disputes through PMA. The said arbitration agreement reads as under:-

"In the event of any dispute or differences relating to the interpretation and application of the provisions of the contracts, such dispute or difference shall be referred by either party for Arbitration to the Sole Arbitrator in the Department of Public. Enterprises to be nominated by the Secretary to the Government of Indian In- Charge of the Department of Public Enterprises. The Arbitration and Conciliation Act, 1996 shall not be applicable to arbitration under this clause.