An arbitrator is bound to compensate a contractor for loss of profit resulting from a wrongful termination of contract, even if the contractor does not provide sufficient evidence to substantiate the claim.

This is an application for setting aside a speaking award dated 28.8.86. The petitioner entered into a contract with the respondent for certain construction works and a work order was issued by the respondent on 6.1.82. Subsequently a formal written contract was executed by and between the parties relating to the said contract. This contract contained an arbitration clause. The existence and validity of the contract and the arbitration agreement are admitted by the parties. The time to complete the work was admittedly extended till 25.2.83.

2. Disputes and differences having arisen relating to the said contract, the petitioner had to stop construction work due to nonpayment of his running bills as well as for other breaches of terms of the contract by the respondent. By a letter dated 4.2.83, the respondent directed the petitioner to show cause by 25 2 83 the delay in execution of the work. The petitioner showed cause by his letter dated 22.2.83. Thereafter the respondent by its letter dated 23.283 imposed penalty of Rs. 10,000/- on the petitioner and informed him that the said amount would be recovered from his security deposit. The respondent thereafter by its letter dated 25.2.83 purported to rescind the said contract and forfeit the security deposit. By that letter, the petitioner was informed that the balance work would be completed by another agency at the risk and costs of the petitioner.

3. Under the circumstances, the petitioner requested the Chief Engineer, Eastern Zone, C.P.W.D. to appoint an arbitrator for adjudication of the disputes raised by the petitioner. By a letter dated 26.12.83, the Chief Engineer appointed an arbitrator for adjudicating upon the disputes raised by the petitioner as also the question of "counter-claim of the Government, if any". It is the petitioner's case that no demand for any counter-claim was even made by the respondent before the reference was started and there was no occasion for the petitioner to deny the same. Therefore, there was no counter-claim nor any dispute regarding the same which could be referred to arbitration on 26.1283 as was done by the letter dated 26.1283.

4. The validity and the legality of the award dated 28.8.86 have been challenged on several grounds set out in para 33 of the petition.

5. The petitioner pressed the ground (d) alleging that the arbitrator had mis-conducted the proceeding by disallowing damage suffered by the petitioner by way of loss of profit on account of the wrongful termination of the contract by the respondent. The arbitrator in his award has held :-

"Thus the recission of the contract on 25.2.82 (Ext. R-9) is considered to be unjustified."

6. The damage bas been disallowed on the ground that-"The claimant has not given sufficient evidence to substantiate his claim. The claim is, therefore, not held to be justified". The Counsel for the respondent submits that the petitioner bas withdrawn his claim for general damage. The loss of profit is a special damage and requires proof to establish the same, The claim for special damage is Rs.19,500/- which has not been establised in evidence before the arbitrator. The arbitrator is the sole judge of facts and of law. The Court has no jurisdiction to re-assess the evidence and come to a different finding from that of the arbitrator. The arbitrator was perfectly justified in disallowing this claim for damage. The petitioner, on the other hand, submits that the refusal to allow this claim on the ground of unsatisfactory evidence is improper. The value of the entire Walk was admittedly to be Rs.4,79,782/- as would be clear from Ext. R-1 annexed to the counter-statement of fact filed by the respondent in the arbitration proceeding. The value of the work executed by the petitioner is also admitted to be Rs.3,01,289/- as would be established from Ext. R-24, another annexure to the said counter-.statement of fact. Therefore, the balance value of the unexecuted work was Rs. 1,78,498/- which the petitioner w