( 1 ) IN a petition filed under Section 14 of the Arbitration Act by the petitioner. notice was given to the Umpire/respondent No. 2 in response to which he had filed the award and the proceedings in this Court. Notice of tiling of the award was given to both the parties. Both the parties have filed objections to the award. Following issues were framed :-

1. Whether the award is liable to be set aside or modified in view of the objections filed by the parties ? 2. Relief.

( 2 ) IT was agreed by the counsel for the parties, as mentioned in order dated 25th January 1993, that the question of grant of pendentelite interest which has not been decided by the Umpire be decided by this Court instead of remitting the award to the Umpire for the decision on this question. ISSUE N0. 1

( 3 ) FACTS leading to the giving of the award, in brief, are that in and about December 1977, a global tender was invited by the Government of Maldives to upgrade the existing airport of Hulule Island. The project was to be funded by Quwait and Saudi funds. Kocks Consult GMBH of Germany were the consulting engineers and Mr. Edwin Lutzman was the Resident Engineer.

( 4 ) RESPONDENT No. 1, on 12th December 1977. had given its tender and on 28th February 1978, the Government of Maldives awarded the contract to respondent No. 1 involving the total sum of US$ 1,07,43,881. 92. The site was handed over on 22nd March 1978 and according to the terms of the contract, the first phase i. e. site installation including mobilisation of plant, machinery and material, tools, etc. and also construction of temporary structures including the residence and laboratory tor the Resident Engineer were to be completed by 21st July 1978 and the work was to be executed as per time schedule and/or Bar Chart and had to be completed on or before 21st December 1979.

( 5 ) IT is the case of the respondent No. 1 that on 8th March 1978, a back to back agreement was entered into by respondent No. 1 with the petitioner and as a matter of fact, the whole work was to be executed by petitioner and petitioner was to get US$96,82,931. 92.

( 6 ) ON May 2, 1979, a sum of US$ 13,43,367. 39 were paid to the petitioner as mobilisation advance and a sum of US$ 1,79,500 was paid as a bridging finance to the petitioner apart from other expenses incurred by respondent No. 1 on petitioner s acount totalling to US$ 15,62,062. 94. It is averred that petitioner had deliberately and intentionally executed the project at a very slow speed and lagged far behind the scheduled Bar Chart and some of the main machines which were brought to the site of petitioner were old, unusable and junk and there were serious apprehensions about utilisation of the foreign exchange provided to the petitioner for the project. As such on 10th January 1979, the respondent No. l terminated the agreement with the petitioner and the project was thereafter executed by respondent No. 1 and completed on 31st September 1981 at the risk and , cost of the petitioner. According to the averments made in the objections of the respondent No. 1, respondent No. l is stated to have spent a sum of US$ 1,51,85,699. 32 incurring a loss of US$ 63,14,541. 02 which the respondent No. l claimed from the petitioner apart from the amount of US$ 8,55,903. 80 which remained outstanding with the petitioner against the advances paid to respondent No. l for purchase of plant and machinery.

( 7 ) ACCORDING to the terms of the tender floated by the Government of Maldives, it was incumbent upon any party offering the tender to disclose the names of associates and the respondent No. 1, while giving the tender, had disclosed the names of M/s. Om Prakash Baldev Kishan Private Limited as an associate but after acceptance of the tender, the said company had backed out and the respondent No. l wanted a suitable replacement and without disclosing the status of the petitioner, the respondent No. 1 had entered into a back to back agreement with the petitioner f