IMPORTANT POINT
While considering a challenge to an award does not examine the award as an appellate court.

JUDGMENT

R.V. Raveendran, J. —

Leave granted.

2. The appellant (also referred to as ‘ONGC’) entrusted a construction work to the respondent under a contract dated 11.10.1983. Clause 25 of the contract provided for settlement of disputes by arbitration. Certain disputes arose between the parties in regard to the said contract and they were referred to a sole arbitrator on 31.12.1986. The claimant made several claims aggregating to Rs.82,89,000/-. ONGC made counter claims aggregating to Rs.1,24,87,000/-. The arbitrator awarded Rs.9,50,000/- under the first claim, Rs.7,80,132/- under the second claim, Rs.4,77,129/- under fifth claim and several smaller amounts under claims 3, 4, 6 to 13, 15, and 17, in all aggregating to Rs.25,26,270/-. The arbitrator also awarded 12% pendente lite interest and 6% from the date of the award/decree. The counter claims were rejected.

3. The ONGC challenged the said award by filing a petition under sections 30 and 33 of the Arbitration Act, 1940 (‘Act’ for short). The civil court (Additional District Judge, Dehradun) dismissed the said petition filed by ONGC and made the award a rule of the court. ONGC filed an appeal before the Uttarakhand High Court. By impugned judgment dated 14.6.2007, the High Court upheld the judgment of the civil court making the award the rule of the court, subject only to one change, by reducing the rate of pendente lite interest from 12% to 6% per annum. The said judgment is challenged by ONGC in this appeal by special leave.

4. It is now well settled that a court, while considering a challenge to an award under sections 30 and 33 of Arbitration Act, 1940, does not examine the award, as an appellate court. It will not reappreciate the material on record. An award is not open to challenge on the ground that the arbitrator had reached a wrong conclusion or had failed to appreciate some facts. But if there is an error apparent on the face of the award or if there is misconduct on the part of the arbitrator or legal misconduct in conducting the proceedings or in making the award, the court will interfere with the award.

Keeping the said principles in view, we will consider the challenge.

5. The award has been made with reference to several claims. The appellant has not been able to make any valid ground to attack except with reference to claim No.(1). In fact, the learned counsel for appellant rightly concentrated upon the award on claim No.(1), which relates to the claim for compensation for loss on account of prolongation of the completion period on account of the ONGC’s failure to perform its contractual obligations. The arbitrator has held that the delay in completion was due to the fault of both the contractor and ONGC and that both are equally liable for the delay of 19 months. The arbitrator held that as both were equally liable, the contractor was entitled to compensation at the rate of Rs.1 lakh for a period of 9 = months (that is half of the period of delay of 19 months) in all Rs.950,000/-. The arbitrator has observed that there is no provision in the contract by which the contractor can be estopped from raising a dispute in regard to the said claim. But clause 5A of the contract pertains to extension of time for completion of work and specifically bars any claim for damages. The said clause is extracted below :

“In the event of delay by the Engineer-in-Charge to hand over to the contractor possession of land/lands necessary for the execution of the work or to give the necessary notice to the contractor to commence work or to provide the necessary drawing or instructions or to do any act or thing which has the effect of delaying the execution of the work, then notwithstanding anything contained in the contract or alter the character thereof or entitle the contractor to any damages or compensation thereof but in all such cases the Engineer-in-Charge may grant such extension or extensions of the completion date as may be deemed fair and reasonable by the Engineer-in