An arbitrator's award can be set aside if the arbitrator has exceeded his jurisdiction, committed misconduct, or violated the principles of natural justice.

By this petition filed under section 30 and 33 of the Arbitration Act, 1940 the petitioner seeks that the arbitral award dated 10th December, 2007 rendered by the learned umpire be set aside. The petitioners herein were the original respondents in the arbitration proceedings and the respondents herein were the original claimants. For the sake of convenience, the parties herein are referred to as the parties described in the arbitration proceedings. Some of the relevant facts for the purpose of deciding this petition are as under :-

2. Sometimes in the month of December 1987 the respondents invited tenders for construction of 26' submarine oil pipe line and 24' submarine oil trunk pipeline between Uran Shore Refinery and the HRA Platform. The claimants submitted their bid in response to the said invitation. On 6th November, 1989 the bid of the claimants came to be accepted by the respondents. Parties entered into a contract on 6th November, 1989 on the terms and conditions recorded therein. The claimants submitted a bank guarantee as per clause 17.1 of the contract. The stipulated date of completion of the work as per clause 8.5 of the contract was 15th May, 1990. On 7th July, 1990, 1st August, 1990 and 8th August, 1990 the partial work was completed and the project was handed over to the respondents by the claimants.

3. On 23rd November, 1990 the claimants requested the respondents to issue work completion certificate. On 30th November, 1990 the respondents issued partial work completion certificate to the claimants subject to their fulfilling and completing the pending work.

4. On 31st March, 1995 the respondents sought to encash the bank guarantee in view of the alleged breaches of the contract by the claimants. The claimants filed a suit in the court of Civil Judge, Senior Division at Panvel and obtained an injunction restraining the respondents from encashing the bank guarantee. By an order dated 23rd February, 1998 in the Civil Revision Application (445 of 1996) this court directed the banks of the claimants to pay the amount claimed by the respondents under the said bank guarantee and held that in the event of the arbitrator holding that the respondents were not entitled to invoke the said bank guarantee, the respondents shall refund the amount so received to the claimants alongwith interest at the rate of 15% per annum from the date of such payment till the date of refund.

5. Dispute arose between the parties. Under the arbitration agreement recorded in clause 16.2, each party appointed an arbitrator. The two arbitrators appointed the umpire under the said arbitration agreement. It was provided in the agreement that the arbitration proceedings shall be held in accordance with the provisions of the Indian Arbitration Act, 1940 and the rules made thereunder. The agreement provided that the arbitrators/umpire shall give reasoned award.

6. On 29th May, 1999 the learned arbitrator informed the parties that they were unable to agree on the award and advised the parties to appoint an umpire as per terms of the contract. The entire matter was thus referred to the learned umpire. Both parties led oral and documentary evidence. The learned umpire reserved the award in the year 2004. On 10th December, 2007 after expiry of more than three years, the learned umpire made an award. By the said award the learned umpire directed the respondents to pay USD 996846, Euros 766860 and Rs.169143/- with interest only on USD 780245, Euros 766860 and Rs.169143/- at the rate of 10% per annum from 23rd February 1998 till the date of the award and interest on the entire amount awarded at the rate of 10% per annum from the date of award till payment or realization whichever is earlier.

7. The learned umpire allowed some of the claims made by the claimants and held that the respondents are entitled to recover out of the awarded sum on account of liquidated damages the sum of USD 759723. The learned umpire directed the respondents to pa