High Court Of Delhi
RAM SYAL AND SONS - Appellant
Versus
FOOD CORPORATION OF INDIA - Respondent
Suit 20A of 1982
Decided On : 08/12/1986
ARBITRATION - REFERENCE TO ARBITRATION - CONTRACTUAL DISPUTE - INTERPRETATION OF CONTRACT - JURISDICTION OF ARBITRATOR - ARBITRATION ACT, 1940, SECTION 20.
Fact of the Case:
The petitioner, a contractor, entered into an agreement with the respondent, Food Corporation of India, for the execution of certain work. The agreement contained an arbitration clause providing for the reference of any dispute arising out of or relating to the contract to arbitration. The petitioner filed a petition under Section 20 of the Arbitration Act, 1940, seeking reference of certain disputes to arbitration.
Finding of the Court:
The court held that the arbitration clause was wide and comprehensive and covered all disputes arising out of or relating to the contract, including the interpretation of the terms of the contract. The court also held that the petitioner was not required to provide full details of the claims in the petition under Section 20 and that the mere fact that some of the claims overlapped or lacked in details was not a ground for refusing reference of the disputes to arbitration.
Issues: 1. Whether the arbitration clause in the contract covered the dispute relating to the interpretation of the terms of the contract. 2. Whether the petitioner was required to provide full details of the claims in the petition under Section 20 of the Arbitration Act. 3. Whether the fact that some of the claims overlapped or lacked in details was a ground for refusing reference of the disputes to arbitration.
Ratio Decidendi: 1. The arbitration clause was wide and comprehensive and covered all disputes arising out of or relating to the contract, including the interpretation of the terms of the contract. 2. The petitioner was not required to provide full details of the claims in the petition under Section 20 of the Arbitration Act. 3. The fact that some of the claims overlapped or lacked in details was not a ground for refusing reference of the disputes to arbitration.
Final Decision: The court allowed the petition and referred the matters in dispute to arbitration, except for the claim for costs of the arbitration proceedings.
( 1 ) THIS is a petition under Section 20 of the Arbitration Act praying that the matters in dispute as stated in the petition be referred to arbitration of the arbitrator to be appointed by the Managing Director of the Food Corporation of India, respondent, in accordance with the terms of the arbitration agreement as arrived at between the parties. Mr. Narsimhan, learned counsel for the respondent, submitted that as per Clause 10 of the terms and conditions governing the agreement the contractor is not entitled to any compensation or damages on account of any delay in supply or non-supply thereof of all or any such material or store. It Is submitted that in view of this term of the agreement the claim of the petitioner for damages on account of non supply or short supply of cement by the respondent to the petitioner for the execution of the work is not liable to be referred to arbitration. I do not agree with this submission. The portion of Clause 10 of the terms and conditions of the contract as relied on by Mr. Narsimhan is an integral part of the terms and conditions of the agreement as entered into between the parties. The arbitration clause No. 25 of the agreement is a very wide and comprehensive clause. As per ibis clause any question, (claim), right, matter or thing whatsoever in any way arising out of or relating to the contract, designs, drawings etc or the execution or failure to execute the work whether arising during the progress of the work or after the work or after the completion or amendment thereof has to be referred to arbitration. Thus the question of the interpretation of the terms of the contract is also a question which is very much within the jurisdiction of the arbitrator. The abitrator is competent to interpret and to see the effect of the portion of clause 10 as relied on by Mr. Narsimhan. The question as to whether in view of that clause the petitioner-contractor is entitled to claim any compensation or damages on account of the delay in supply of or on account of non-supply of the cement or not is accordingly for the arbitrator to decide in the reference and it is not for this court to interpret the contract including the said term, thereof. The only proper course for the Court to do at this stage is to refer the matters in dispute as provided by the petitioner in the petition to the arbitration of the arbitrator to be appointed by the Managing Director of the respondent- corporation. In support of his above submission Mr. Narsimhan referred to a decision of the Division Bench of the Calcutta High Court in the case of Hindustan Milk Food Manufacturers Ltd. v. G. Atherton and Co. . a short note of which is reported in AIR 1985 Cal 30 (Calcutta ). This judgment is of no help to the case of the respondent. In that case the plaintiff was appointed the sole selling agent of the defendant for a number of years. The sole selling agreement was, however, terminated and a new agreement was entered into between the parties. The plaintiff sought reference of certain disputes that had arisen between the parties under the new agreement. He, however, also claimed reference of the disputes relating to the sole selling agency. That was, however, not referred to arbitration. It was held that the dispute relating to the sole selling agency was not a dispute about the breach of any of the terms of the agreement that was got filed by the court and the disputes that had arisen under the new contract were only directed to be referred to arbitration. Such is not the situation in the case before us. It is also stated here that there is no clause in the agreement as arrived at between the parties specifically excluding the jurisdiction of the arbitrator from entertaining and deciding any claim of the contractor for compensation or damages on account of any delay in the supply of any material or on account of non-supply of the material.
( 2 ) MR. Narsimhan raised another objection, namely, that the disputes as
Login now and unlock free premium legal research
Login to SupremeToday AI and access free legal analysis, AI highlights, and smart tools.
Login
now!
India’s Legal research and Law Firm App, Download now!
Copyright © 2023 Vikas Info Solution Pvt Ltd. All Rights Reserved.