Mayo Collaboraive_ Elaboration on Thoughts

The mayo collaborative arguments in the Supreme Court of USA raised some interesting questions in the domain of patent-eligible subject matters. The most important is about the test that distinguishes the Patentable subject matter from the idea or the natural phenomenon. What adds to the nature to make patent eligible subject matter?

Lets try to find out the possible solution of this question and suggestions are welcomed.

The ideas to the extent that they are law of nature or well established principles are not patentable subject matter. So Newton Laws, Mass energy equation and thermodynamic principle are not patentable. However, the application of law of nature is patentable. So a bicycle if is novel and has inventive step and has an utility, based on the principle of Newton Laws of Motion is patentable subject matter.

The question to ponder is when the application of law of nature itself would become the law of nature. Where is the thin line difference and what test to apply.

Human intervention is important parameter that is applied in the arguments of Mayo Collaborative case. In my opinion this test holds good for the most of example. If there is human intervention in the law of nature to make something useful, the matter, prima facie should be patentable.

The other question is what should be patentable, the subject matter as such, or the result obtained by the subject matter. Does the patent on the subject matter extends to the results obtained as well. My answer to this question would be NO. So, whereas the bicycle is patentable in the example given above, the motion obtained from the bicycle is not. If similar motion can be obtained by some other means, like skating board, the board will be patentable subject matter, not the motion itself.

Can the result measurement be patentable? Answer is again, in my view, is NO. There can be no patent on the measurement, as the measurement is merely abstract numbers or the tool to measure. Means to measure the number can be patentable, but not the measurement itself.

In the analogy that Supreme Court has taken various time, for the mass energy equation, the equation itself or the energy obtained through the process regulated by the equation is not patentable, however, If there is some means by which energy can be obtained for useful use, that means is patentable.

In the Mayo Case, the patent claim on range seems to defeat the criteria of subject patentability for two reasons.

1. That they are merely measurements

2. That the opinion based on the measurements are mere opinions.

However, if the defendants could prove that the numbers itself is consequence of calibration (Please note that argument like the calibration is itself a ‘mean’ can’t be ruled out) and not mere measurements obtained as such, the Court might end up with serious thoughts on the defendant arguments.

As far as it goes, looks interesting case in days to come.

What Added To Nature Would Make The Subject Matter Patentable (Mayo Collaborative vs Prometheus)

This case could be one landmark decisions on the matter of patentability of subject matter. The case involves the Patent of Prometheus which involves the claim on the “numbers” that it reflects on the dosage of thiopurines. There are suggestions or indicator to the suggested numbers. Following question of law is involved
1. Can numbers be patented (which are reflected out of theuropeutic process).
2. What is the test for the patentability involving the natural phenomenon? When the subject matter turns patentable and doesn’t remain a mere abstraction.
A federal judge invalidated the patents, holding that the patent couldn't cover the body's reaction to drugs and thus the numbers. The U.S. Court of Appeals for the Federal Circuit, which specializes in patent issues, overturned the lower court order.
The questions on the patentability of numbers is defended by the principle of utilty, wherein in particular, on the question of court on invalidity of numbers in the correct range later in time, it was defended that it can be taken care by utility. Thus, if the patentable range of numbers are no more correct at some later point of time, the utility is lost and the Patent defeats.
Other important questions are raised by justice Scalia and Justice Kennedy in the case. The arguments are worth reading.
I am sure, I am going to put some views on this hugely and tempting topic sooner. The arguments can be heard at oyez.
The arguments were heared on 7th of December, 2011.

Philosophy of Immanuel Kant

In his book “Critique of Pure Reason, (1781)” which is considered as one of the most influential works of philosophy, Immanuel Kant criticized the utilitarian theory. 

Utilitarianism which was first proposed by Jeremy Bentham advocates for rules which gives maximum pleasure to maximum number of people in the society. The basis of this theory is that each act of man is based on or results in either pain or pleasure. Humans have a tendency to work for pleasure and avoid pain. Therefore, the “good” law would be the one that would create maximum pleasure for maximum number of the people. For example, a criminal must be sent to jail because it would give a certain “kind” of pleasure to the society. 

The basis of Kant’s rejection of utilitarianism is that humans are rational beings capable of reasoning. This is what sets them apart from mere inanimate things. Kant advocates that each individual irrespective of his societal status possesses an inherent dignity which has an intrinsic value. Therefore, humans should not used as a means to achieve an end. Kant advocated the libertarian concept of individual freedom. But his conception of freedom is different from others. 

According to Kant, freedom is opposite to necessity. For example, if someone goes to restaurant to eat something then according to Kant’s notion of freedom, he is not ordering food according to his freedom because his hunger is the cause which necessitated him to go to restaurant. To act freely is not to choose a best means for an end. To act freely is to act for the sake of end itself. Accordingly, Kant proposes freedom as autonomy which means to act according to your own will. In autonomy, a Law is not imposed on an individual; rather the individual imposes a Law upon himself.

Kant proposes a very stringent standard of morality. Each act has its own moral worth which should be independently judged from the consequence that it produces. This is against the theory of consequential morality which advocates that the morality of an act depends on the consequence that it produces. Therefore, according to Kant, fundamental rights are not morally good because their observance leads to a ordered and peaceful society rather they are morally good because of the reason that each individual possess an inherent dignity and hence he must possess certain fundamental rights. 

Taking another example, deception is not morally bad because in the long run it may harm, but because in deception, one uses the other person as a means to achieve an end and humans should not be used as a means. Notions like duty, inclination, sympathy and altruism are acceptable reasons behind acts, which give acts their moral worth.

The contribution of Immanuel Kant has been great in the way that he advocated the dignity of each human being. Philosophers like John Rawls were influenced by what came to be known as “Kantianism”. John Rawls in his famous Theory of Justice states that a liberal democracy and its institutions must take care of all the people including the people belonging to the lowest strata of the society. 

His principle of inviolability of each person’s dignity is very similar to the Kant’s theory. Another area which in my view supports Kantian notion is the area of human rights. The theory of human rights developed post World War II emphasizes that human rights are rights which an individual possesses because of the reason that he is human. Here also we see that the intrinsic worth of human dignity is respected.

Please write your comments and suggestions.

( For a lucid account of Kant’s philosophy, see http://www.justiceharvard.org/2011/02/episode-06/#watch)

Pre-Grant opposition: An opposition of a different kind

I was reading section 25(1) of the Patent Act 1970; and i found some confusion in relation to pre-grant opposition. 

Section 25(1) read as :At any time within four months from the date of advertisement of the acceptance of a complete specification under this Act (or within such further period not exceeding one month in the aggregate as the Controller may allow on application made to him in the prescribed manner before the expiry of the four months aforesaid) any person interested may give notice to the Controller of opposition to the grant of the patent  on the grounds:

1.If the invention (in full or part) is wrongly obtained.

2.Claim has been published before priority date claimed.

3.Claim has been claimed in other patent.

4.Claim of the complete specification was publicly known or publicly used in India before the priority date of that claim.

5.Any claim of the complete specification is obvious and clearly does not involve any inventive step.

6.Any claim of the complete specification is not an invention

7.Complete specification does not sufficiently and clearly describe the invention

8.Failed to disclose information required by the controller.

As the Patent act or Patent rules doesn't describe regarding fees and forms of filing pre-grant opposition, it has given rise to few doubts in my mind.

1.As this pre-grant opposition is filed at the application stage, whether the party who is opposing to the application, should be considered as a necessary party as compared to post grant and revocation proceedings? 

As this has been not clearly stated in Act and rules about the pre-grant proceedings, i would like to go with the answer. NO. (the party who is opposing the application is not the necessary party). i,e it is not inter-party in nature of opposition.

Reasons:

1. As this in pre grant stage, revelation of document might cause damage or might hamper the credibility of the patent.If the party is considered as a party to proceedings, then he is entitled to see all the documents in relation to the pertaining application of patent. and if such documents are produced (it might constitute an prior art). 

2. There is no fees and forms prescribed for pre-grant opposition. 

3.Appearing and hearing is not compulsory, though he can provide an application for it, but it is upon the discretion of controller to allow such application.  If it deals with the matter of utmost importance, which if falls

in public domain, might loosen the stand of patent, controller can deny such application.

4. As stated inn section 15 of the Act states that power of controller to revoke and amend an application may be exercised even without a pre grant opposition.

5. The role of opponent is merely to  provide the grounds of opposition and material to support the grounds.

6.If the controller is satisfied with the materials opposing the application,then he can allow pre-grant opposition, on contrary if filed for post-grant or revocation,it is not upon the satisfaction of controller to accept or reject the same.He is bound to take up the application and start the proceedings.

7.In pre-grant opposition, cost is not allowed to the person who oppose the application, on contrary cost is allowed in post grant & revocation proceedings.i,e opponent can proceed with the case irrespective of the merit of notice of opposition. but the case is not same with pre-grant opposition.

8.Patent Act and Rules are silent about whether the defence of the applicant should be disclosed to the opponent.(If not disclosed to the party, as it would amount to violation of natural justice and may invoke writ jurisdiction), (if supplied, would form a prior art and as well as affect application).

Considering the above points, i am with the opinion that pre-grant opposition is not an inter-parte opposition, where the party who is opposing the application is not a necessary party, but he mere acts as an facilitator to oppose the application.This opposition is between Controller and the applicant of the patent.

Readers re free to provide their comments and opinions!!

Difference between Indian & US Patent System

Provision related to the patentable subject matter in US Patent Act is illustrative in nature in the sense that it defines what is patentable in US. While, on the other hand, Indian Patents Act defines what is not patentable subject matter.

US patent act allows a discovery of process, machine, manufacture or composition of matter to be patented if it satisfies the criteria of novelty, utility and non-obviousness. While under Indian Patent Act, the mere discovery of a new and useful process or product is not patentable.

US Patent Act does not speak specifically about patentability of computer programs, while under Indian Patent Act, computer programs per se are not patentable.

Indian patent system works on “first to file” scheme while US works on “first to invent” scheme. Though this has been changed by America Invents Act, 2011. Patents filed after March 16, 2013 will be granted on a first to file basis.

In US only post grant opposition to the patent is allowed while in India both pre grant and post grant opposition are allowed.

US patent laws allow the grant of patent to anyone who invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof. Indian Patent Laws does not allow new and useful process or product by mere discovery to be patented.

Interference proceedings in US Patent system considering the inventor ship issues. No interference proceedings in Indian patent system.

Plant are patentable in us where as plant are not patentable in India.

Business methods are not patentable in India whereas they are patentable in US

Patent agent of other countries (Canadian patent agent) also can practice as US patent agent. But this is not possible in India, where a patent agent must have Indian nationality.
Patent Term adjustment is there in US , while there is no provision for patent erm adjustment in India.

Filing of a patent in affordable cost

Filing of Patent

Filled by Natural person: Rs.1000/- 

If filed by ‘Other than natural person’ may include a legal entity; it may also include a legal entity and a natural person jointly, then: Rs.4000/-

Specification and Claims

Specification up to 30 pages : Free

Specification exceeding 30 pages, for natural person: Rs.100/- per page

Specification exceeding 30 pages, for other person: Rs.400/ per page 

Claims up to 10: Free

Claims exceeding 10, for natural person: Rs.200/- per claim

Claims exceeding 10, for other person: Rs.800/- per claim

Publication

All patent applications filed are published in the Patent Office Journal after 18 months from date of filing .But, there can be a early publication filed in Form 9.

Early publication for Natural person:  Rs.2500/-

Early publication for other person: Rs.10,000/-

Examination

Must be filed within 48 months prior to date of application or from priority date.

The prescribed fees for examination for natural person: Rs. 2,500/- 

The prescribed fees for examination for other person: Rs. 10000/- 

Overall

  Minimum cost to be payed by a natural person for a patent: Rs.6000/-

  Minimum cost to be payed by other person for a patent: Rs.24000/-

Medicines Patent Pool: a Potent Tool to Address IP Barriers

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A patent pool is a way of facilitating access to intellectual property through which, two or more patent-holders agree to share their intellectual property with each other or with third parties through negotiation of licences.

Off late the pharmaceutical industry is slowly absorbing the idea that patent pools could function as an interesting alternative to exclusive single-firm production, simple bilateral licensing or cross-licensing. Increasingly, patent pools for medicines are being considered as a tool to facilitate access to large numbers of inventions in this sector.

Médecins Sans Frontières[1] (MSF) and Knowledge Ecology International[2] (KEI) first presented the concept of a patent pool for medicines to UNITAID in 2006. In July 2008, the UNITAID Board decided to explore the feasibility of setting up a voluntary HIV/AIDS medicine patent pool, which received approval in December 2009. In July 2010 the Medicine Patent Pool (MPP) was legally created and established as an independent entity with the mission of improving access to HIV medicines in developing countries and became operational in November 2010.

As of late 2011, the MPP has remain restricted to ARVs, despite of strong indications by several MPP proponents that the MPP could be useful for other drugs beyond ARVs in the near future. In 2009, GSK proposed a pool for medicines for neglected tropical diseases for Least Developed Countries (LDCs) as part of its Open Innovation Agenda[3].

MPP is particularly useful in situations where a number of related inventions are patented by many different organizations and where access to these inventions is essential for the development and commercialization of a (new) product. Such situations are commonly referred to as ‘patent thickets’[4] in cases where it is cumbersome to safeguard one’s freedom to operate (FTO) because the commercial production, marketing and use of a new product, process or service is likely to infringe many existing patent rights owned by many third parties (third party patent rights). To gain access to those third party patent rights, one will need to enter into a multitude of licensing negotiations often leading to an accumulation of royalties (royalty stacking). For some companies or researchers this might be a reason to redesign or completely stop a research project[5]. In such situations MPP act as facilitators and its use of one-stop-licenses normally reduce royalties and transaction costs, increases legal certainty and reduces enforcement litigation, thereby mitigating the costs and risks of R&D and reducing significantly the costs for end users.

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[1] http://www.msfaccess.org/

[2] http://keionline.org/; See IGWG Briefing Paper on Patent Pools Collective Management of Intellectual Property -- The use of Patent Pools to expand access to essential medical technologies. KEI Research Note 2007:3 (1) January 23, 2007 available at: http://accessvector.org/oldkei/content/view/65/; EMILA working plan, available at: http://www.keionline.org/index.php?option=com_content&task=view&id=64&Itemid=44

[3] BVGH (2010) Pool for Open Innovation against Neglected TropicalDiseases: Core Principles, BVGH

[4] Shapiro, C. (2001) Navigating the patent thicket: cross licenses, patentpools, and standard-setting. In Innovation Policy and the Economy(Jaffe, A. et al., eds), pp. 119–150, MIT Pres

[5] Heller, M.A. (1998) The tragedy of the anticommons: property in thetransition from Marx to markets. Harv. Law Rev. 111, 621–688; Heller, M.A. (2008) The Gridlock Economy: How Too Much OwnershipWrecks Markets, Stops Innovation, and Costs Lives, Basic Books; Heller, M.A. and Eisenberg, R.S. (1998) Can patents deter innovation?The anticommons in biomedical research. Science 280, 698–701

Change of Name: The detailed procedures to be followed

If any person wants to change his/her name for some or other reasons, which includes (Name after marriage). The procedure might take a minimum of six months considering various reasons.

Procedures to be followed:

File an application to First Class Magistrate (Of your area of residence) Requesting to change the name.

Attest your affidavit by a oath commissioner or notary.

If you are an NRI, then the affidavit needs to be attested by the respective Indian High Commission or Indian Embassy.

In a blank paper  type out the details as specified, which includes your old name, the new name you wish to adopt, your father’s or husband’s name and address, and your employer’s name. You have to sign this Proforma in the presence of two witnesses and have them sign the document as well.

Advertise in any one of the daily local newspapers, mentioning your father’s or husband’s name and address, and your intention to change your name. Be sure to get an original copy of this advertisement as it appears in the paper.

Send by registered post or you may either take in person the following:
1.The original advertisement, 2.Original Performa, 3.Attested affidavit, 4.Two attested passport (address proof) 5.photographs.

                        [Pay the fee for having your change of name published in the Gazette of India Part IV. The amount (in the range of Rs. 700 as of 2009) will need to be submitted in advance, in cash or by Demand Draft/Indian Postal Order drawn in favor of Controller of Publication, Department of Publication, Civil Lines, Delhi-54. All of the above mentioned documents will have to be sent to the same address.]

                        [You have to obtain the copies of official gazette where your change of name has been published and use it as proof of your name change wherever needed. A couple of extra copies can be obtained for an extra fee of around Rs. 35 per copy. For NRI’s, the cost of advertising change of name in the Gazette of India is Rs. 2300/- which includes international postage.]

In short:

·         Advertisement in a local newspaper

·         Affidavit

·         Passport photographs

·         Proforma (typed)

·         Fees in Cash, Postal Order or Demand Draft

Alternate Dispute Resolution Method in Pakistan

The relevant laws (or particular provisions) dealing with the ADR are summarized as under:

·          The Arbitration Act, 1940.

·         Articles 153–154 of the Constitution of Pakistan, 1973 (Council of Common Interest)

·         Article 156 of the Constitution of Pakistan, 1973 (National Economic Council)

·         Article 160 of the Constitution of Pakistan, 1973 (National Finance Commission)

·         Article 184 of the Constitution of Pakistan, 1973 (Original Jurisdiction when federal or provincial governments are at dispute with one another)

·         Sections 102–106 of the Local Government Ordinance, 2001.

·         Sections 10 and 12 of the Family Courts Act, 1964.

Arbitration in Pakistan:

Although no explicit mention of ADR is mentioned in the Constitution of Pakistan, a reference to commercial and financial activities can be pinpointed in the Constitution.

Pakistan has also signed and ratified the New York Convention. The New York Convention is also known as the New York Convention of 1958 and the Convention for the Recognition and Enforcement of Foreign Arbitral Awards. UNCITRAL is a Commission of the UN established by the General Assembly on 17 December 1966 by Resolution 2205 (XXI). Thus, although the New York Convention was adopted in 1958, the Commission’s essential mandate is to promote the Convention further. Furthermore, UNCITRAL serves as the International Trade Law Branch of the Office of Legal Affairs of the UN. Hence, UNCITRAL, under the umbrella of the UN, is the biggest organizational body to prepare rules relating to ADR, namely arbitration and conciliation.

Arbitration in Pakistan is still largely governed by the 1940 Act which was enacted by the British for the undivided Indian colony. Though Pakistan has signed the NYC, the enforceability of foreign arbitral awards is unclear as the NYC has not been implemented. The first attempt to implement the NYC was made in 2005, when the new Arbitration Act was passed as an Ordinance (along with an Ordinance to implement the ICSID Convention in 2006, which is now the Investment Disputes Act) almost 50 years after they signed on the NYC.

Pakistan Engineering Council Islamabad:

PEC Rules of Conciliation and Arbitration is one such document prepared by a team of experts comprising Employers, Constructors and Consultants and Legal Advisors in line with the advice by Planning Commission, Govt. of Pakistan. It is expected that use of this document will provide an equitable and just basis for settlement of disputes pertaining to construction and consultancy contracts expeditiously.

The Rules specified in the this document shall be applicable for all construction  and engineering services (consultancy) contracts to be executed in Pakistan irrespective of their source of financing and/or nationality of the constructors/consultants (engineering service providers).

Any dispute, controversy or claim arising out of or relating to a Contract, or the breach, termination or invalidity thereof, shall be settled by arbitration in  accordance with the PEC rules of Arbitration in-force.

This indicates that there are a number of institutions which are working as an institution for conciliation. And this gives a reference that as contrary to Indian laws, in Pakistan, there is a specific requirement that parties referring to conciliation and the institution will be mentioned in the contract.

Recent Initiatives regarding ADR in Pakistan:

·         Code of Civil Procedure (CPC) which is the primary procedural law for civil matters in Pakistan, has been amended (under AJP) for providing enabling mechanism for Court Annexed ADR in Pakistan (Section 89-A).

·         Small Claims and Minor Offences Ordinance 2002 has been promulgated for providing exclusive forum (at the district level) for facilitating the resolution of smaller disputes. This law also provides ADR mechanism for facilitating the resolution and settlement of disputes within the framework of the formal court system. This could be transformed into an excellent forum for addressing disputes in the emerging justice sector in Pakistan;

·         Under the Access to Justice Program, the review of Arbitration Act represents a significant policy action. This review needs to be undertaken and capacity building initiatives put in place to promote effective arbitration regime in Pakistan.

·         A new local government system has been introduced in Pakistan, establishing elected local governments at the level of Union Council, Tehsil (Sub District Level) and the District level. The institution of Musalihat Anjuman (literally meaning conciliation forums) has been provided at the level of Union Councils for dispute resolution through ADR (including conciliation, mediation and arbitration). The finalization of the rules of Business for these bodies is essential to popularize the use of ADR.

In WAPDA v. Kot Addu Power Company[1] – Provisions of section 290 of the Companies Ordinance, 1984 vested statutory jurisdiction in High Court to take certain measures described there and ordered to resolve dispute inter-se shareholders or directors of a company – High Court dismissed the petition made under section 3 of the Arbitration (Protocol & Convention) Act, 1937 for reference of the dispute under the Act of 1937.

Pakistan has entered into Bilateral Investment Treaties with 36 countries which include dispute settlement mechanism between the host country and foreign investor, failing this through mutual consultations, where after the investor can refer the dispute to a competent court of the respective country or an ad-hoc arbitration panel established under rules of the UN Commission on International Trade Law (UNCITRAL) or to the Court of Arbitration of Paris International Chamber of Commerce (ICC). These mechanisms provide transparent, inexpensive, speedy and accessible dispute resolution to foreign investors. The International Center for the Settlement of Investment Disputes (ICSID) also provides facilities for conciliation and arbitration of investment disputes between contracting states and nationals of other states under the Convention for the Settlement of Investment Disputes and Pakistan is a member of the Center.

The Conciliation Courts (West Pakistan Amendment) Ordinance, 1966:

An Ordinance further to amend the Conciliation Courts Ordinance, 1961, in its application to the Province of West Pakistan.“(2-A)   Cases relating to matters falling under Section A of Part I and Section A of Part II of the Schedule, against any Government servant, shall be excluded from conciliation except where a certificate is granted by Government or an officer authorised by Government in that behalf to the effect that the Government servant had not acted in the discharge of his official duties”.

Alternative Dispute Resolution mechanisms and Arbitration provide alternate to litigation by avoiding lengthy and costly proceedings. They are best suited for commercial disputes as the relationship between the parties is expected not to suffer after exhausting such methods and the parties are more likely to settle their differences in a relaxed and friendly manner. In Pakistan, a more frequent use of such methods poses numerous problems which can be overcome by a collective effort by the Government, Judiciary and the Bar Councils.

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[1] 2002 MLD 829

Every Clause For Finality Of Decision Isn’t The Arbitration Clause, There Is No Format For Arbitration, Intention Of Parties Is Important

The Recent decision on the matter of State of Orrisa and Others v Bhagyadhar Dash (4th July, 2011, SC Decision) brings an interesting compilation of the arbitration clause identification in the judgment. The division bench took notice of various prior cases to set the test for the determination of arbitration clause. While going through various decisions, the bench wrote comprehensive judgment and gave opinion on different matter.

Essentials of Arbitration Agreement.

Taking the reference from KK Modi Case, and then Bihar State mineral Corporation v Encon Builders (2003 7SCC 418), court stated following four categories.

(i) There must be a present or a future difference in connection with

Some contemplated affair;

(ii) There must be the intention of the parties to settle such difference

By a private tribunal;

(iii) The parties must agree in writing to be bound by the decision of

Such tribunal; and

(iv)The parties must be ad idem.

The Court also took the principles laid down in Jagdish Chandar v Ram Chandar, which broadly can be stated this

1. The intention of parties to go into the arbitration is to be gathred from the terms of the agreement. A mere possibility doesn’t constitute the arbitration clause or agreement. There should be firm determination.

2. Attributes of arbitration are important, it might not necessarily be using terms connected with arbitration like arbitration per se or arbitral tribunal. The attributes are that the agreement should be in writing, it should have the agreement between parties to go to a private tribunal for adjudication, the private tribunal should be empowered to adjudicate in impartial manner, following natural justice and there should be binding effect as agreed by the parties.

3. Any settlement which excludes any of the attributes of arbitration can’t be called as arbitration. The court however didn’t state the case if the clause states it to be arbitration agreement but it specifically excluded any of the attributes (say hearing) from the process. It is submitted that from the quasi judicial nature of arbitration, such clause might be held to be void. However, it again has to be gathered from the terms and this intention of parties.

4. The contingency on the clause for arbitration would not make it an arbitration clause unless the clause is further approved by the parties.

Test for the Arbitration Agreement:

In KK Modi, it is enunciated, that for the arbitration agreement, emphasis is on

1. The existence of dispute not avoidance of dispute.

2. The judicial action of tribunal in which the dispute is referred.

3. The decision should bind the parties.

In three bench decision of State of Orissa v Damodar Das(1996 (2) SCC 216), Court stated

It would, thereby, be clear that this Court laid down as a rule that the arbitration Agreement must expressly or by implication be spelt out that there is an agreement to refer any dispute or difference for an arbitration and the clause in the contract must contain such an agreement. We are in respectful agreement with the above ratio. It is obvious that for resolution of any dispute or difference arising between two parties to a contract, the agreement must provide expressly or by necessary implication, a reference to an arbitrator named therein or otherwise of any dispute or difference and in its absence it is difficult to spell out existence of such an agreement for reference to an arbitration to resolve the dispute or difference contracted between the parties.

In this decision, Court had to consider the construction of clause

“that if the contractor disputes the rate fixed by the Engineer-in-Charge, the decision of the Superintending Engineer in regard to rate for such non-scheduled item shall be final”

Court going through all the above decisions held that though the clause passes the test laid down from prior decisions, the intention of parties can be gathered from the fact that the government deleted the arbitration clause from the agreement and amended the standard form of agreement. Court held that the clause only provided the limited sphere of determination of the rates to avoid the dispute. There is no reference to the tribunal in regard to dispute between parties, the clause is rather unilateral where contractor disputes the rate and then it shall be finalized by the Superintendent Engineer.