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1993 Supreme(Cal) 397

High Court Of Calcutta
PRABIR KUMAR MAJUMDAR, SAMARESH BANERJEE
SHANKARLAL MAJUMDAR - Appellant
Versus
STATE OF WEST BENGAL - Respondent
A. O. D.  344  Of  1984
Decided On : 08/24/1993

Advocates Appeared:
ARUNA DUTT, GOPAL CHAKRAVARTHI, H.M.DUTT, PARTHA SARATHI BOSE

An arbitrator's interpretation of a contract is within their jurisdiction and cannot be challenged unless the award is a speaking award and the interpretation is erroneous on its face.

Headnote:

ARBITRATION - SETTING ASIDE OF AWARD - JURISDICTION OF ARBITRATOR - CONSTRUCTION OF CONTRACT - ERROR WITHIN JURISDICTION - NON-SPEAKING AWARD - JUDICIAL REVIEW.

Fact of the Case:

The respondent State of West Bengal (State) challenged an arbitration award on grounds including that the arbitrator traveled beyond the scope of the submission, acted without jurisdiction, and misconducted the proceedings by awarding interest. The appellant, the contractor, contended that the award was a non-speaking award and the court could not look into the contract or documents not incorporated in the award to find misconduct.

Finding of the Court:

The court held that the impugned award was not a speaking award and, therefore, the court could not look into the contract or any document or any other material not being incorporated in the award to find out whether the learned arbitrator, as has been contended on behalf of the respondent State of West Bengal, has made his award in express violation of the express term of the agreement in particular clause 24 thereof.

Issues: 1. Whether the impugned award was a speaking award? 2. Whether the court could look into the contract or any document or any other material not being incorporated in the award to find out whether the learned arbitrator had misconducted himself and the proceedings? 3. Whether the arbitrator had exceeded his jurisdiction in allowing certain claims?

Ratio Decidendi: 1. A speaking or reasoned award is one which discusses or sets out the reasons which led the arbitrator to make the award. Setting out the conclusion upon the questions or issues that arose in the arbitration proceeding without discussing the reasons for coming to the conclusion does not make an award a reasoned or speaking award. 2. The court cannot look into the contract or any document or any other material not being incorporated in the award to find out whether the learned arbitrator had misconducted himself and the proceedings. 3. If the contract is not in dispute, then in order to consider which of the claims of the claimant should be allowed and in allowing such claims if the arbitrator had to interpret certain clauses of the counsel and if such interpretation is erroneous, the court could not touch the award as it was within the jurisdiction of the arbitrator to interpret the contract and whether such interpretation was right or wrong the parties would be bound.

Final Decision: The court set aside the judgment and order of the trial court and upheld the arbitration award.

P. K. MAJUMDAR, J.

( 1 ) THIS is an appeal from judgment and order dated 25th July 1984 passed by learned Single Judge of this court taking arbitration matter.

( 2 ) THE respondent State of West Bengal made an application under sections 30 and 33 of the Arbitration Act for setting aside an award dated 17th September, 1983 passed by the Sole Arbitrator, a retired Judge of this Court. The respondent State of West Bengal challenged the award, inter alia, on the following grounds : (a)the learned arbitrator travelled beyond the scope of the submission ; (b)by allowing the appellant's claim under item No. 4 (a) in the schedule, the learned arbitrator had acted without jurisdiction ; (c)the learned arbitrator by allowing the appellant's claim on idle labour had acted in express violation of the express term of the agreement under Clause 24 : and (d)the learned arbitrator had misconducted seriously by awarding interest.

( 3 ) THE learned counsel for the respondent contended before the court of first instance that the learned arbitrator had no jurisdiction to entertain the appellant's claim for cost and carriage of earth as these disputes were outside the purview of the agreement between the parties.

( 4 ) THE next contention of the respondent before the court of first instance was that there was an express clause in the contract totally absorbing the respondent from its liability to pay for idle labour.

( 5 ) THE respondent took one substantial ground before tire court of first instance that the appellant admitted before the learned arbitrator that the appellant had regular books of account written in English which was kept for the purpose of income tax. In spite of repeated suggestion by the counsel for the respondent during cross-examination that the books of account in Bengali produced before the learned arbitrator were manufactured for the purpose of the arbitration proceeding and the arbitrator in breach of his duty did not direct the contractor (the appellant) to produce tire regular books of account and thereby Seriously misconducted himself and the proceedings in allowing tire claim on the basis of the fabricated books.

( 6 ) THE learned trial judge accepted this last contention as to the non-production of accounts and set aside the award on this ground, relying on the decision of the Supreme Court in AIR 1975 SC 1259 (K. P. Poulose v. State of Kerala and Anr. ). The learned judge, however, rejected other contentions of the respondent as made before the trial Court.

( 7 ) IN this appeal, Mr. Hiranmoy Dutt appearing for tire appellant, the award-holder, has submitted that impugned award is a non speaking award and it is now settled proposition that if the contract is not incorporated in the award or any document or the contract not referred to in the award, the court cannot look into the contract nor the documents placed before the learned arbitrator to find out whether the learned arbitrator misconducted himself in not giving directions for production of the English books of accounts. It is the contention of Mr. Dutt that it will not appear from the award which account books the learned arbitrator has taken into consideration and if there was any books of account in English, whether learned arbitrator felt it necessary to direct the appellant to produce the same. Mr. Dutt also submits that it cannot be ascertained whether the production of such account books was necessary for the purpose of deciding the issue before the learned arbitrator. It is submitted by Mr. Dutt that it is not the case of either side brat there was no evidence to support the conclusions taken by the learned arbitrator. He also submits that the court in a proceeding for setting aside the award cannot reappraise the evidence led before the learned arbitrator in order to find out whether the learned arbitrator misconducted himself or the proceeding.

( 8 ) IT is also contended by Mr. Dutt for the appellant that the learned judge made a wrong apprecia



























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