SupremeToday Landscape Ad
Back
Next
Judicial Analysis Court Copy Headnote Facts Arguments Court observation
Listen Article Pause Article
judgment-img

1996 Supreme(Del) 655

High Court Of Delhi
TRAKRU PROJECTS INDIA PRIVATE LIMITED - Appellant
Versus
INTERNATIONAL AIRPORT AUTHORITY OF INDIA - Respondent
Decided On : 08/13/1996

An arbitrator's award is not invalid merely because it may be demonstrated that the arbitrator has committed a grave mistake in arriving at his conclusion, unless the arbitration agreement or deed of settlement requires the arbitrator to give reasons for his decision.

Headnote:

ARBITRATION - AWARD - CHALLENGE - VALIDITY - ARBITRATOR NOT REQUIRED TO GIVE REASONS - AWARD CANNOT BE HELD INVALID MERELY BECAUSE BY INFERENCE AND ARGUMENTS IT MIGHT BE DEMONSTRATED THAT ARBITRATOR HAS COMMITTED GRAVE MISTAKE IN ARRIVING AT HIS CONCLUSION.

Fact of the Case:

The petitioner, a contractor, was awarded a contract for special repairs to Bay No. 13 at Delhi Airport, Palam. Disputes arose between the parties and the respondents appointed the Chief Engineer (CW) International Airport Authority of India as the sole arbitrator to decide and make his award in respect of the disputes referred to him. The arbitrator entered into the reference and after considering the claims filed by the parties and upon taking evidence in the form of documents and after hearing the parties passed an award on 11.6.1987. The respondents filed an objection to the award seeking setting aside of the said award.

Finding of the Court:

The court held that the arbitrator was not required to give reasons in support of the decision reached by him unless under the arbitration agreement or deed of settlement he is required to give such reasons. Since on consideration of the evidence before him the arbitrator has come to the aforesaid conclusion that the petitioner/claimant is entitled to Rs. 16,250.00 and Rs. 7,200.00 towards expenses incurred on account of idle wages of labour and idle wages of staff, the aforesaid conclusion of the arbitrator cannot be interfered with.

Issues: Whether the arbitrator's award is valid even though he did not give reasons for his decision.

Ratio Decidendi: The court relied on the Supreme Court decision in Bijendra Nath Srivastava Vs, Mayank Srivastava; AIR 1994 SC 2562, which held that an award is not invalid merely because by a process of inference and arguments it may be demonstrated that the arbitrator has committed grave mistake in arriving at his conclusion. The arbitrator is under no obligation to give reasons in support of the decision reached by him unless under the arbitration agreement or deed of settlement he is required to give such reasons.

Final Decision: The court rejected the objections raised by the respondents and made the award passed by the arbitrator on 24.7.1984 a Rule of the court.

M. K. SHARMA

( 1 ) DISPUTES having arisen between the parties the respondents appointed the Chief Engineer (CW) International Airport Authority of India as the sole arbitrator under clause 25 of the agreement in respect of work "special Repairs to Bay No. 13 at Delhi Airport, Palam", to decide and make his award in respect to the disputes referred to him. The arbitrator entered into the reference and after considering the claims filed by the parties and upon taking evidence in the form of documents and after hearing the parties passed an award on 11. 6. 1987. The aforesaid award passed by the arbitrator was filed in this court alongwith the proceedings. Upon filing of the said award notice was issued to both the parties, on receipt of which the respondents filed an objection to the award seeking setting aside of the said award. The petitioner filed a reply to the aforesaid objections contending that the aforesaid objections have no merits and are liable to be dismissed and sought for making the award Rule of the Court.

( 2 ) I have been taken through the contents of the award passed by the arbitrator as also through the proceedings before the Arbitrator by the learned counsel appearing for the parties. Upon hearing the counsel for the parties, I propose to dispose of the objections raised by the respondents.

( 3 ) THE respondents did not raise any objection in respect of claim No. 1 which relates to expenditure incurred by the respondents for submission offender and-various other expenses connected with it which came to be rejected by the arbitrator, and therefore, does not call for my consideration at all

( 4 ) IN respect of claim No. 2 for Rs. 67,900. 50 on account of incurring Expenditure on idle wages of labour the Arbitrator has awarded a sum of Rs. 16,250. 00. Similarly, in respect of claim No. 3 of the claimant/ petitioner for the amount of Rs. 7,830. 00 for incurring expenditure on idle wages of staff the arbitrator has awarded a sum of Rs. 7,200. 00 in respect of the said claim.

4. 1 The learned counsel appearing for the respondents submitted before me that the aforesaid award of the arbitrator awarding the aforesaid sum is without any reason. As is disclosed from the award, the arbitrator did not refer to any document on the basis of which he had arrived at the entitlement of the said amount. The learned counsel for the petitioner on the other hand submitted that the vouchers in respect of the said claims were submitted by the claimant/petitioner and on consideration of the same the arbitrator came to the conclusion that the claimant is entitled to the aforesaid amount in respect of the aforesaid two claims. 4. 2 It has been settled by the Apex Court that the Court cannot probe into 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. In Bijendra Nath Srivastava Vs, Mayank Srivastava; AIR 1994 SC 2562, the Supreme Court has held that as regards the award made by an arbitrator under the Act the law is well settled that the arbitrator s award is generally considered binding between the parties since he is the tribunal selected by the parties. In the said decision, it is further held that an award is not invalid merely because by a process of inference and arguments it may be demonstrated that the arbitrator has committed grave mistake in arriving at his conclusion. The arbitrator is under no obligation to give reasons in support of the decision reached by him unless under the arbitration agreement or deed of settlement he is required to give such reasons. 4. 3 In the present case it is admitted position that under the arbitration agreement the arbitrator was not required to give such reasons. Since on consideration of the evidence before him the arbitrator has come to the aforesaid conclusion that the petitioner/claimant is entitled to Rs. 16,250. 00 and Rs. 7,200. 00 towards expenses incurred on account of idle




Click Here to Read the rest of this document
1
2
3
4
5
6
7
8
9
10
11
SupremeToday Portrait Ad
supreme today icon
whatsapp-icon Back to top