The arbitrator has to assign reasons for allowing a claim and cannot completely misdirect its mind while allowing a claim on account of failure of consideration.

Soumen Sen, J.

The respondent is the award holder.

2. The petitioner has filed an application being G.A. No.3904 of 2015 for stay of operation of an award passed on 25th August, 2015. The petitioner has also filed an application being A.P. No.1734 of 2015 for setting aside of the said award.

3. The dispute between the parties arose out of an agreement dated 8th January, 2003, under which the petitioner was to manufacture and supply goods as stated in the agreement for a total consideration of Rs.1,22,00,000/-. The goods to be supplied under the agreement, inter alia, included one Pipe End Facing and Chamfering Machine Model No. EFM-4(L)-Single Tube along with maintenance, insurance, spares and consumables for the said machine; Single Pipe Hydro Tester Model No. HP-4(L) and maintenance, insurance and spares for the single pipe hydro tester model. The agreement also included charges for supervision of erection, adjustment and commissioning by the petitioner.

4. This agreement was made to satisfy the respondent's obligation for export of Kazakstan for utilization at Ispat Karmet, Kazakstan in their pipe plant.

5. The petitioner alleged to have supplied the goods and performed the work in terms of the contract. However, a part consideration out of the said Rs.1,22,00,000/- was paid to the petitioner by the respondent and thereafter on the allegation, the petitioner had committed a breach of the agreement in supplying the goods agreed to be supplied under the agreement, the respondent made a demand on the petitioner for refund of the entire consideration. The respondent claimed that there was a total failure of consideration and prayed for refund of the consideration money.

6. In terms of the arbitration clause contained in the agreement dated January 8, 2003, the Hon'ble Justice Ronojit Kumar Mitra (Retd.) was appointed as the Sole Arbitrator to adjudicate upon the disputes and difference between the parties.

7. The respondent as claimant in the arbitration proceeding has made the following contention:-

(A) The respondent-claimant under a contract dated December 26, 2000 agreed to sell to Ispat Karmet Kazakhstan, one Pipe End Facing & Chemfering Machine, Model No.EFM. 4(L) Single tube and one Single Pipe Hydro-tester, Model No.HT-4(L) (hereinafter referred to as "the said two machines"). Thereafter the name of Ispat Karmet Kazakhstan was changed and is presently known as Mittal Steel Termirtua.

(B) The Claimant on January 8, 2003 entered into an Agreement with Tata Steel Limited. In the Agreement the Claimant is mentioned as the "Buyer", the petitioner as the "Seller" and Ispat Karmet Kazakhstan as "End User" (hereinafter referred to as "the Agreement"). Under the Agreement the petitioner agreed, inter alia, to manufacture and commission the said two machines, inclusive of maintenance, insurance, spares and consumables of the machines for 20 days. The respondent in terms of the Agreement further undertook supervision of erection, adjustment and commissioning of the machines at its own cost. The contract price was agreed at Rs.1,22,00,000.

(C) The petitioner entrusted M/s. ITL Industries Ltd. (hereinafter referred to as "ITL") to manufacture the two machines, in accordance with the specifications supplied by the claimant. During the course of manufacture of the two machines, the claimant in terms of the Agreement was entitled to inspection.

(D) Upon completion of manufacture of the two machines, the petitioner issued "inspection release note" and the claimant 'the dispatch clearance'. The two machines in terms of the Agreement were then shipped and transported by the petitioner to the End User's designated plant in Kazakhstan. In the presence of technical experts including one Mr. Arun Khanwalker on behalf of ITL, on March 9, 2004 erection and commissioning process of the two machines commenced.

(E) The End User alleged that due to diverse defects and deficiencies in the basic design, the two machines failed to attain the production