S. Ravindra Bhat, (Open Court)-This petition under Section 34 of the Arbitration and Conciliation Act 1966, seeks orders for setting aside an Award of the Arbitrator dated 30.1.2007.

2. The facts necessary for deciding the controversy in the present case are that the plaintiff, which engages itself in the business of transportation of bulk Liquefied Petroleum Gas (LPG) using trucks for such purpose answered a tender inquiry issued by the respondent on 14.5.1999. The respondent sought for tenders in a two-bid system i.e. credential and price bid for award of transportation contract for two years with an option for extending it by one year. The petitioner had agreed to the tender conditions. Clause 4 of the Standard Terms and Conditions, contained an escalation clause which stipulated that revisions in the contracted freight rate would be applicable subsequent to the issue of the offer letter against the tender.

3. It is not in dispute that the petitioner was declared successful and its offer of Rs. 1.32 per k.m. M.T., was accepted by the respondent. The respondent was unable to finalise the rates and, therefore, not in a position to enter into final and formal contract within