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1995 Supreme(Del) 746

High Court Of Delhi
ASIA FOUNDATIONS AND CONSTRUCTION LIMITED - Appellant
Versus
OIL AND NATURAL GAS COMMISION - Respondent
Suit 2847 of 1990
Decided On : 09/22/1995

Advocates Appeared:
Alok Dhir, AMIT DHINGRA, B.Dutt, L.P.DHIR, R.SASIPRABHU

An arbitrator is not required to give reasons for his findings unless the arbitration agreement or the deed of submission requires him to do so.

Headnote:

ARBITRATION - AWARD - VALIDITY - NON-SPEAKING AWARD - ARBITRATOR NOT REQUIRED TO GIVE REASONS - NO ERROR OF LAW ON THE FACE OF THE RECORD - AWARD UPHELD.

Fact of the Case:

A dispute arose between the contractor and ONGC regarding the payment for work carried out under a contract for laying an effluent disposal pipeline. The matter was referred to arbitration, and the arbitrator passed a non-speaking award in favor of the contractor. ONGC filed objections to the award under Sections 30 and 33 of the Arbitration Act, alleging that the arbitrator had misconducted himself, that the award was not passed on a valid stamp paper, and that the arbitrator had erred in law.

Finding of the Court:

The court found that the arbitrator was not required to give reasons for his findings, as the parties had not specified that the award should be a speaking award. The court also found that there was no evidence of misconduct on the part of the arbitrator, that the award was passed on a valid stamp paper, and that the arbitrator had not erred in law. The court therefore upheld the award.

Issues: 1. Whether the arbitrator was required to give reasons for his findings. 2. Whether there was any evidence of misconduct on the part of the arbitrator. 3. Whether the award was passed on a valid stamp paper. 4. Whether the arbitrator had erred in law.

Ratio Decidendi: 1. An arbitrator is not required to give reasons for his findings unless the arbitration agreement or the deed of submission requires him to do so. 2. There was no evidence of misconduct on the part of the arbitrator. 3. The award was passed on a valid stamp paper. 4. The arbitrator had not erred in law.

Final Decision: The court dismissed ONGC's objections to the award and made the award a rule of the court. The court also awarded the contractor interest on the amount of the award from the date of the award until the date of realization.

S. D. PANDIT

( 1 ) FOR fabrication and laying of effluent disposal conduit, including concrete coating portion, protectioncoating and associated works on 9. 10. 1985. The total value of the contract work was Rs. 1,14,70. 918. 70p. The work included laying of pipes between mid-sea to plaintiff s premises at Uran. having tota. length of 1600 mtrs. The work was to be carried on land and sea, consisting of partly submerged portion of land due to tidal waves and fully submerged land. The said work was to be completed within six months from 1. 9. 1985 but was actually completed about 64 weeks after the stipulated date.

( 2 ) DISPUTES between the parties had arisen and the matter was referred to the sole arbitration of Shri V. J. Sood. The Arbitrator passed the Award dated 27. 1. 1990 and awarded in all Rs. 47,18,0037- to the petitioner herein.

( 3 ) RESPONDENT Oil and Natural Gas Commission (hereinafter referred to as ongc ) has filed objections to the Award under Section 30 and 33 of the Arbitration Act. It is contended that Engineers India Limited had forwarded the bills to the respondent ONGC after verification of the same and those bills were paid by the respondent to the Contractor and, subsequently, disputes were first raised by the Contractor. This aspect was not at all considered by the Arbitrator.

( 4 ) IT is further contended by the respondent ONGC that the Arbitrator had misconducted himself and the Award is also not passed on a valid stampt paper. The sole Arbitrator did not take into consideration the tendered documents between the parties and has, consequently, erred in coming to a wrong decision. The Arbitrator did not take into consideration that the claim was barred in view of Clause 5. 5 of the General Clauses Act and Clause 7. 2 of Special Conditions of Contract documents and that amounts to an error of law. The sole Arbitrator has not at all given " appropriate interpretation to the contract documents and the material on record. Therefore, the Award deserves to be set aside.

( 5 ) IT is further contended by the respondent that as there was fulfilment of the contract, respondent ONGC was entitled to levy the penalty as per the terms of the contract and Arbitrator was not justified in reducing the said penalty. Thus, it is contended by the respondent that the Award passed by the Arbitrator should not be accepted by this Court and no decree. in terms of the same should be passed.

( 6 ) IT is also contended on behalf of the contractor that the Court should Award interest to the Contractor from the date of the Award till the date of realisation. The said claim of the Contractor is also opposed by the respondent ONGC.

( 7 ) THE Arbitrator had filed an application along with the Award in Court on 10. 8. 1990 before this Suit was filed by the Contractor. That application of the Arbitrator is given Suit No. 2740a/90. It is tagged with this Suit and both the suits are consolidated.

( 8 ) IN view of the pleadings my learned predecessor had settled the issues. Those issues and my findings thereon for the reasons hereinafter stated are as under: -

( 9 ) THERE is no dispute over the fact that disputes had arisen between the Contractor and the respondent and as per the terms of the contract between the parties those disputes were referred to the sole arbitration of Mr. V. J. Sood. Admittedly, it was the claim of the contractor that he was entitled to get Rs. 86,61,927. 89p. after taking into consideration the payments made to him by the respondent ONGC and it was his further claim that respondent ONGC was not at all justified in awarding penalty and claiming liquidated damages from him for delay in completion of the contractor. The Arbitrator has passed his Award on 27. 1. 1990 and he has found that the contractor was entitled to get Rs. 52,91,549. 00 as against the claim of Rs. 86,61,927. 89p. The Arbitrator has further found that the contractor was liable to pay penalty byway of liquidated damages for the delay in completion




















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