The main legal point established in the judgment is that the arbitrator's interpretation and construction of the reports and the method of calculation were logical and just, and substantive justice had been done.

ARIJIT PASAYAT, J.

( 1 ) LEAVE granted.

( 2 ) CHALLENGE in this appeal is to the judgment rendered by a division Bench of the Bombay High Court dealing with an appeal questioning the correctness of the order passed by a learned Single Judge who dismissed the appellant's appeal under Section 34 of the Arbitration and Conciliation Act, 1996 (in short the 'act') questioning the Arbitrator's award.

( 3 ) THE controversy lies within a very narrow compass.

( 4 ) THE factual background is almost undisputed and is essentially as follows: the appellant required off shore vessels (in short 'osvs')inter-alia, for supplying material from its onshore bases to its offshore installations. After initially meeting its requirements by chartering foreign OSVs, the appellant decided to develop a fleet of Indian Flag vessels. Various Indian companies including the respondent and the Shipping Corporation of india (in short 'sci') acquired OSVs, with a view to chartering them to the appellant. The respondent acquired five vessels- (named Garware I to Garware V) which were handed over to the appellant in the months of November and December, 1983 and January and March, 1984. The dispute pertains to the cost of repairs and maintenance of the respondent's OSVs for the eleventh to the sixteenth year of their operation. Even though there is no dispute regarding the first two terms of five years each, reference to the manner in which the rates for the same were arrived at is necessary. A working group under the Director general of Shipping was constituted by the Ministry of petroleum to determine the floor day rate in respect of the vessels keeping two objects in mind, i. e. (a) long term availability of the OSV's for the appellant and (b) economic viability to ensure the respondent's survival in the business. The report was submitted by the working group on 8. 3. 1984 suggesting the day rate which comprised of two components, i. e. (a) capital recovery factor and (b) operating expenses. Contracts were accordingly entered into for the first five year period beginning from 1983-84. The Government of India by an order dated 18. 8. 1984 approved the report in certain respects only. There is no dispute between the parties regarding the payments of operating costs for the first five years. The charter was extended by another five years. A committee presided over by Dr. A. N. Saxena was formed to review the operating costs payable for the extended term. The government approved the report of the Committee on 5/8/1993. There is no dispute between the parties in respect of the payments regarding the second five year period also.

( 5 ) THE present dispute relates to the period beyond ten years so far as relates to the basis for computing the rates for repairs and maintenance. By an order dated 29/4/1993 the charter was extended by a further six years. By an order dated 16/3/1995 and as modified by an order dated 14/9/1995, a committee also presided over by Dr. A. N. Saxena was formed to recommend a suitable formula for the charter rate for the further extended period.

( 6 ) THE committee submitted its report on 14/9/1997. This committee made recommendations inter-alia in respect of repair and maintenance expenses. The reference to arbitration was confined only to the payment of these repairs and maintenance expenses.

( 7 ) THE Government of India by a letter dated 15/6/1998 accepted the recommendations of the second Dr. A. N. Saxena committee only partially. Representations were thereafter made by the Indian Shipping Companies including the respondent for reconsideration of the recommendations. Pursuant thereto, the Government of India appointed a High level Working Group presided over by Mr. Naresh Narad for considering the outstanding pending issues. The following recommendations of the High Power Committee are relevant:

"pending Issues. 1. Determination of year from which R and M expenses are to be actualized. a) 1 to 5 years as per payments already made.