1. By this petition filed under section 34 of the Arbitration and Conciliation Act, 1996, (for short the said Arbitration Act), the petitioner has impugned the arbtiral award dated 2nd March, 2010 thereby allowing some of the claims made by the respondent no.1 and rejecting the counter claims made by the petitioner. Some of the relevant facts for the purpose of deciding this petition are as under:-

2. The petitioner was the original respondent to the claim made by the respondents and was claimant to the counter claim made by the petitioner. The respondents were the original claimants to the statement of claim and were respondents to the counter claim before the learned arbitrator.

3. The petitioner was nominated as the implementing agency for the Oil Palm Demonstration project of the Government of India. The petitioner had taken on lease several pieces of agricultural land from farmers in District Sindhudurg aggregating to about 1035 hectares of land for the purpose of planting nursery, growing oil palm trees and producing palm fruits. It is the case of the petitioner that the petitioner had completed the formalities of registration of lease deeds in respect of about 672 hectares, while lease formalities of the remaining 363 hectares were in progress.

4. On 31st March, 1996, the petitioner caused an advertisement of tender notice in the newspaper for participation in large commercial plantation of oil palm trees and edible oil. Pursuant to the said advertisement, respondent no.2 submitted tender. There were various meetings and consultation between the petitioner and the respondent no.2. It is the case of the respondents that in compliance of one of the condition of the tender offer, firm M/s.Saidhara was duly converted into a private limited company under the provisions of Companies Act, 1956 and was named as M/s.Saidhara-DCK Agro Products and Plantation Private Limited.

5. On 17th December, 1997, the petitioner and the respondent no.2 entered into a joint venture agreement. Under the said joint venture agreement, it was recited that under diverse deeds of lease, the petitioner had taken on lease several pieces of agricultural land at village described in Schedule 1 to the said agreement in District Sindhudurg aggregating admeasuring approximately 1035 hectares for the purpose of planting, nursery and growing oil palm trees and producing palm fruits. It was recited that several lease deeds were entered into with the petitioner in respect of the said land owners for a period of 35 years commencing from the date of actual possession taken by the petitioner under the deed of lease executed by and between the petitioner and respective land owners. The petitioner had commenced palm tree plantation on the said lands. The petitioner had proposed to promote the company for setting up a factory for processing of palm fruits for producing oil and other chemical etc. The petitioner agreed to take Saidhara the then a proprietory concern of the respondent no.2 as co-promoter in the said projects. The petitioner agreed to entrust the management of the plantation to the proposed joint venture company under the said agreement without creating any interest in the said lands. It was agreed that the joint venture company would sell the oil produced from the trees and in the best interest of the joint venture company.

6. Under clause 1.1 of the said agreement, it was recorded that the petitioner had contributed about Rs.1102.79 lacs in the said project upto 31st December, 1996 as and by way of investment. It was expressly agreed by and between the petitioner and the respondent no.2 that the cost of investment incurred on the project till 31st December, 1996 shall be taken to be at Rs.400 lacs and no further investment in Rupee terms whether by way of equity or loan shall be demanded/expected nor the same shall be made by the petitioner.

7. Under clause 1.2 of the said agreement, it was provided that if the cost of investment amounting to Rs.40