1991 Supreme(Cal) 10
High Court of Calcutta
P.K. Majumdar, J.
Authority – Appellant
Versus
Sushil Kumar Rot – Respondent
Decided On : Jan 15, 1991
A.K. Chatterjee, P.K. Roy Chaudhary
The court cannot sit in appeal over the arbitrator's decision and cannot interfere with the award unless there is an error of law on the face of the award, misconduct of the arbitrator, or misconstruction of the contract.
Headnote:
ARBITRATION ACT - SECTION 30, 33 - SETTING ASIDE AWARD - GROUNDS - ERROR OF LAW ON FACE OF AWARD - MISCONDUCT OF ARBITRATOR - MISCONSTRUCTION OF CONTRACT - INTERPRETATION OF CONTRACT BY ARBITRATOR - COURT'S POWER TO REVIEW.
Fact of the Case:
The petitioner, Calcutta Metropolitan Development Authority (CMDA), challenged an arbitration award dated 30th September 1988, made by the sole arbitrator, Mr. Hiranmoy Dutta, on the grounds that the claim was barred by limitation and that the arbitrator had allowed compensation contrary to the contract and the prescribed rate by CMDA.
Finding of the Court:
The court held that the question of limitation was a matter for the arbitrator to decide and that the court could not sit in appeal over the arbitrator's decision. The court also held that the award was non-speaking and it could not be determined whether the arbitrator had erred in law or misconstrued the contract. The court further held that the arbitrator was the sole judge of the quality and quantity of evidence and that the court could not substitute its own interpretation of the contract.
Issues: 1. Whether the claim was barred by limitation. 2. Whether the arbitrator had allowed compensation contrary to the contract and the prescribed rate by CMDA.
Ratio Decidendi: 1. The question of limitation is a matter for the arbitrator to decide. 2. The court cannot sit in appeal over the arbitrator's decision. 3. A non-speaking award cannot be challenged on the ground of error of law or misconstruction of contract. 4. The arbitrator is the sole judge of the quality and quantity of evidence. 5. The court cannot substitute its own interpretation of the contract.
Final Decision: The court dismissed the application to set aside the arbitration award.
1. THIS is an application under sections 30 and 33 of the Arbitration Act for setting aside the award dated 30th September, 1988 made and published by the Sole arbitrator Mr. Hiranmoy Dutta. This Award is a non-speaking Award.
2. THE petitioner has taken several ground challenging the said award. At the hearing the learned Counsel for the petitioner has taken the grounds - (i) that the claim being the subject matter of arbitration is barred by the laws of limitation, and (ii) that the Arbitrator has allowed compensation in favour of the claimant, that is, the respondent, contrary to the provisions of the (contract entered into between the parties and in doing so the Arbitrator has ignored the rate prescribed by the Calcutta Metropolitan Development Authority. Regarding the first point taken by the learned counsel for the petitioner, I find there is no substance in this contention. It is a well settled law that the question of a claim being barred by laws of limitation is a question to be decided by the Arbitrator and whether a claim is actually barred by laws of limitation or not that itself is a dispute to be adjudicated by the Arbitrator. It is also the settled law that the Arbitrator is to adjudicate both the questions of fact and law and the Court dealing with an application under Sections 30 and 33 of the Act for setting aside the Award is not to sit in appeal over the decision of the Arbitrator.
3. THE law as fully enunciated by several decisions of the Supreme court as also the High Courts is that an Award can only be set aside if there is an error of law appearing on the face of the Award or that the Arbitrator has mis-conducted the proceedings or mis-conducted himself in the adjudication of disputes between the parties.
4. THE second point taken by the learned counsel for the petitioner is that the contractor is not entitled to any compensation for payment extra work and that is contrary to the provisions of the Contractor entered into by the parties. The learned counsel has referred to a decision of the Supreme Court in the case of Continental Construction Company vs. State of Madhya Pradesh, reported in AIR 1988 SC 1166 where it has been held that the Arbitrator is not a conciliator and cannot ignore the law or misapply it in order to do what he thinks just and proper. The Arbitrator is be decide the disputes according to law and is bound to follow the law. I have already Indicated that this Award challenged in this proceeding is a non-speaking Award. It is not clear from the Award itself whether the Arbitrator has made any award for compensation or damages or whether such Award of compensation, if any, has been made ignoring any terms of the contract or contrary to the terms of the contract. The Supreme Court in the case of M/s. Sudarsan/Trading company vs. The Government of Kerala and Anr., reported in AIR 1989 sc 890 has observed that it is not open to the Court to probe the mental process of the Arbitrator and speculate, where no reasons are given by the Arbitrator, as to what impelled the Arbitrator to arrive at his conclusion and even if there are reasons the reasonableness of the reasons given by the Arbitrator cannot be challenged. An appraisement of evidence by the Arbitrator is never a matter which the court questions and considers. It has also been observed that the Arbitrator is the sole judge of the quality as well as the quantity of evidence and it will not be for the court to take upon itself the task of being a judge on the evidence before the Arbitrator. It is also observed that if any amount is awarded by the Arbitrator by taking any particular view of the contract, the court cannot, substitute its own decision on interpretation of a contract. The interpretation of the contract is a matter for the Arbitrator.
5. IN another case of Food Corporation of India vs. Jogindarpal mohinderpal, reported in AIR 1989 SC 1263 the Supreme Court observed that if the Arbitrator had construed the effect of