The central legal point established in the judgment is that an arbitrator's award must comply with the mandatory procedures prescribed under the relevant law and should not exceed the jurisdiction or award more than what was claimed by the parties.

By this appeal filed under Section 37 of the Arbitration and Conciliation Act, 1996 (for short ‘Arbitration Act, 1996’), the appellants have challenged Order and Judgment dated 4th May, 2009 delivered by the learned District Court, Pune in Civil Miscellaneous Application No. 809 of 2008 filed under Section 34 of the Arbitration Act, 1996 thereby allowing the application filed by the respondent and setting aside the arbitral award declared by the sole arbitrator on 16th August, 2008 by which the arbitrator had allowed certain claims made by the appellants.

2. Some of the relevant facts for deciding the issue involved in this appeal are as under:-

3. By an agreement and Power of Attorney dated 12th March, 2004, M/s. Aman & Anand Associates, the partnership firm then consisting of the appellant and Mr. Anand and Shreya Mehkari acquired development rights in respect of the property bearing Survey No. 111, Hissa No. 11/1A admeasuring 21.5 R’ 11/1B admeasuring 21.5 R and Survey No.112, Hissa No.1 admeasuring 13.56 R situate at Village Baner, Tal. Haveli, Dist. Pune. Thereafter other partners viz. Anand and Shreya Mehkari retired from the firm and the firm was renamed as M/s.Anand and Anand Associates. On 22nd August, 2005, the respondent herein was admitted as a partner in the said partnership firm. The firm was renamed as “Sri Sri Gurudeo Reality”. The Memorandum of Understanding and Deed of Partnership was executed by and between the parties on 22nd August, 2005. It was agreed that the net profits or the gross sales of the firm were to be shared in the ratio of 30% to the appellant and 70% to the respondent. The costs in advertisement, marketing and selling were to be shared by the parties according to their respective ratio of profit and loss. In the month of October, 2005, both the parties entered into a Supplementary Deed of Partnership. It was agreed that the period for completion of project was 30 months and in the event of any delay, the respondent would pay interest at the rate of Rs.12% per annum for the delayed period to the appellants on the market value of 30% of the total permissible constructed area.

4. Clause (4) of the Memorandum of Understanding provides that 30% of the constructed area would be exclusively sold by the appellants and 70% of the constructed area would be exclusively sold by the respondent. The respondent agreed to bring Rs.25 lacs as his capital contribution and that the amount would be withdrawn by the appellants. It was further agreed that the respondent would contribute additional sum of Rs.25 lacs by the end of September, 2005 and the same amount would be withdrawn by the appellants. It was agreed that partnership deed executed by the parties was in respect of the development of the property referred therein and it was “specific project partnership” and shall be dissolved automatically on completion of the project and on execution of conveyance and fulfillment of all legal and other formalities in respect thereof. It was agreed that the duration of the reconstituted partnership shall be particular partnership and shall be dissolved automatically on the completion of the proposed construction and development of project in all respect and conveyance in favour of all flats, tenaments, offices and building on the property referred therein. Clause (20) of the Partnership Deed provides for accounts to be taken of all the assets, credits, debts and liabilities of the partnership etc. upon the determination of the partnership and for sale of assets.

5. Clause (23) of the Partnership Deed provided that the respondent alone was empowered to look after execution, implementation and supervision and sales of constructed tenaments other than which were agreed to be sold by the joint signatures of the parties of the appellants which is 30% of the total permissible constructed area.

6. By a Supplementary Deed of Partnership entered into in the October, 2005, Clause 26A was inserted which reads thus:-

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