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BOMBAY HIGH COURT
F.I. Rebello, J.
CHARKOP PRIYA CO-OP. HOUSING SOCIETY LTD. - PETITIONER
v.
TRADE WELL CONSTRUCTIONS - RESPONDENTS
Arbitration Petition No. 259 of 1996,
Decided on: September 15, 1998
ARBITRATION - AWARD - SETTING ASIDE - GROUNDS - ERROR OF LAW APPARENT ON THE FACE OF THE RECORD - JURISDICTION - CONTRACT - INTERPRETATION - PARTNERSHIP - REGISTRATION - BAR TO SUIT - ARBITRATION PROCEEDINGS - APPLICABILITY.
Fact of the Case:
The petitioners, a construction company, challenged an arbitral award granted in favor of the respondents, a partnership firm, for claims arising from a construction contract. The petitioners contended that the respondents were not a registered partnership firm and thus barred from filing claims under Section 69 of the Indian Partnership Act, that certain claims were not subject to arbitration under the contract, and that the arbitral tribunal exceeded its jurisdiction in awarding certain claims.
Finding of the Court:
The court held that the bar under Section 69 of the Indian Partnership Act did not apply to arbitration proceedings, as they were not considered suits or proceedings before a court. The court further held that the arbitral tribunal had jurisdiction to decide the claims that were not specifically covered by the contract clauses relied upon by the petitioners, as those clauses did not preclude the tribunal from considering claims that were not subject to the decision or determination of the employer or engineer.
Issues: 1. Whether the respondents, an unregistered partnership firm, were barred from filing claims under Section 69 of the Indian Partnership Act. 2. Whether certain claims were not subject to arbitration under the contract. 3. Whether the arbitral tribunal exceeded its jurisdiction in awarding certain claims.
Ratio Decidendi: 1. Section 69 of the Indian Partnership Act, which bars unregistered partnership firms from filing suits, does not apply to arbitration proceedings, as they are not considered suits or proceedings before a court. 2. Arbitration clauses in a contract that provide for the decision or determination of certain matters by the employer or engineer do not preclude the arbitral tribunal from considering claims that are not subject to such decision or determination. 3. The arbitral tribunal has jurisdiction to decide claims that are not specifically covered by the contract clauses relied upon by the petitioners, as those clauses do not preclude the tribunal from considering claims that are not subject to the decision or determination of the employer or engineer.
Final Decision: The court partly allowed the petition, setting aside the arbitral award to the extent that it allowed certain claims, and confirming the rest of the award. The court also granted interest on the modified award at the rate of 9% per annum from the date of the decree till final payment.
P.I. Rebello, J. - The petitioners by this petition impugns award dated intimation of this Court. The Arbitrators constituting the Arbitral Tribunal have allowed certain claims in part as claimed by the respondent herein. The Arbitral Tribunal has also dismissed the counter claim made by the petitioners against the respondents. By the present petition the petitioners have prayed for setting aside the award dated 25th December, 1995. The award by the Tribunal is a non-speaking award.
2. On behalf of the petitioners it is contended as under:
(a) There is an error of law apparent on the face of the record as the respondents were not a partnership firm registered under the Indian Partnership Act as amended in the State of Maharashtra and were thus barred under Section 69 of the Indian Partnership Act from meeting the claim. The claim petition of the respondents therefore, it is contended, had to be rejected.
(b) By virtue of the Clauses 2.6.1 and 2.6.2 read with Clause 4.4(b) as also letter dated 14-8-1989 the Claim Nos. 2.3 and 13 could not have been decided by the Arbitrator and as such the Award to that extent is without jurisdiction.
(c) On a reading of Clause 3.2 with Clause 4.4(b) of the general conditions of the contract the Arbitrators acted without jurisdiction in awarding Claims 5, 6(a), 6(b), 7, 8 and 9.
(d) Insofar as the Claim No.1 is concerned. It is contended the amount of Rs. 50,000/- has not been adjusted which payment was made by Bill No.16 which is shown from the documents filed by the petitioners-claimants.
(e) Insofar as rejection of the counter-claim is concerned, it is contended that the Arbitrators misdirected themselves is holding that the claim is not tenable.
3. On behalf of the respondents, it is contended that the Award being non-speaking award this Court cannot go into the reasons for the award. Reasonability of the reasons for the award. Reasonability of the reasons also cannot be gone into. The Award does not disclose any error apparent on the face of the record. It is contended that insofar as Clause 2.6.2. is concerned the Consultant at the highest could fix the rates, but any decision in respect of rejection of the claim was not final between the parties as it was not covered by the said clause and as such it was open to the Arbitral Tribunal to decide the claim. It is also pointed out that Clauses 3.3 and 4.4(b) would not be attracted. It is, therefore, contended that this Court should therefore, not interfere with the award of the Tribunal.
4. A few facts may be noted for the purpose of deciding the issues in controversy in the present petition. The petitioners of 28th March, 1988 accepted the tender of the respondents for the work which consisted of construction of buildings. In terms of the contract time stipulated for completion was 56 weeks and as such the work was to be completed by 24th April, 1989. By Application dated 31st July, 1989 the respondents sought for extension of time for completion of the work upto 31st January, 1990. The Application was considered and time was granted to the respondent’s upto 18th January, 1990. On 7th February, 1990 further extension was sought by a letter addressed to the Consultants upto 16th June, 1990, the Consultants by their letter dated 16th February, 1990 rejected the request for extension of time and also for revised rates. On 18th February, 1990 the Consultants issued a notice to the respondents to show cause why the contract should not be terminated. The petitioners replied to the notice by their letter dated 21st February, 1990. On 9th March, 1990 the contract was terminated. The respondents by letter of 15th March, 1990 replied to the letter of termination.
5. On 1st June, 1990 the respondents submitted their claims to the Consultants for settlements. The Consultants did not settle the matter or for that matter was it settled by the petitioners and as such disputes and differences arose between the parties. On 21st June, 1990 the respo
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