The court upheld the principle that delays attributable to a party render the levy of compensation under the agreement inequitable and redundant. The court also affirmed the Arbitrator's authority to determine the interest rate and award the cost of arbitration.

1. The present objections have been filed by the petitioner under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the “Act”) against the Award dated 20th November, 2009. The respondent raised certain disputes which were referred to the sole Arbitrator before whom the respondent filed its statement of claim.

In response thereto the petitioner filed its statement of defence together with Counter claims. The respondent then filed its rejoinder and defence to the counter claims of the petitioner, where both the parties led their respective evidence after which the learned Arbitrator passed the impugned award wherein he also awarded interest @ 12% per annum on the awarded amount with effect from 3rd May, 2002 to the date of award. The learned Arbitrator has awarded Rs. 50,000/- as cost of proceedings in favour of the respondent without giving any reasons also major parts and claims of the claimants have been rejected by the learned Arbitrator.

2. The relevant facts are that the respondent was awarded the work “C/O Link Road Under Pass” across Ring Road i/c slip road retaining wall for a tendered amount of Rs.1,16,56,344/- by the Executive Engineer on 14th August, 1995. The entire work was to be completed within eight months starting from 24th August, 1995. The stipulated date of completion was 23rd May, 1996.

3. It was the case of the respondent that due to various breaches on the part of the petitioner, the work could be completed on 28th March, 2000, after a delay of 1435 days. Thereafter, the dispute which arose between the parties was referred to the sole Arbitrator as mentioned above.

4. The respondent raised in all 16 claims and later on claim No.14 was withdrawn. The learned Arbitrator allowed as per award claim No.1, 6, 7, 8, 9, 10, 12, 13, 15 and 16 and claim No.2, 3, 4, 5, 11 and 12 have been rejected. The respondent did not challenge the award for rejection of his claims.

5. The findings of the learned Arbitrator, claimwise arrived after considering the rival submissions of parties, pleadings and evidence of the parties. Details are as follows :

a) Claim No.1 : Initially the respondent has claimed Rs.6,00,000/- for electric welding, for weight of I-Sections remained outside of the ground level and 5% wastage. Later on this claim was revised to Rs.2,21,829.73 for welding of plates to I-Sections and Rs.1,89,540/- for M.S. Girders that remained outside. The learned Arbitrator did not allow the claim for electric welding, however as stated in the award, rejecting claim of 5% wastage, portion of I-Section remained above the driven portion was allowed to be paid and accordingly an amount of Rs.1,80,516/- was awarded for undisputed quantity of 257.88 quintal @ the rate of Rs.700 quintal.

b) Claim No.2 : Rejected.

c) Claim No.3 : Rejected.

d) Claim No.4 : Rejected.

e) Claim No.5 : Rejected.

f) Claim No.11 : Rejected.

g) Claim No.6 : Under this claim an amount of Rs.1,00,000/- was claimed on account of portion of steel struts that remained embedded in the raft portion and was not fully measured and paid.

Allowing this claim partly, the learned arbitrator stated as under : “Admittedly, lower portion of the struts weighing 28 quintal was embedded into raft, which was duly measured and recorded. Since the respondent had recorded the measurements of the buried portion, it clearly implied that they were in full agreement with the process followed by the claimant, and they need to be paid and compensated for all such work done by them. As regards contention of the claimant regarding non measurement, the quantity of the struts buried in the second operation, I am not inclined to agree, as the claimant was equally responsible for ensuring correct and timely record of measurements”. Accordingly an amount of Rs.57847/- was awarded against this claim.

h) Claim No.7 : Whether action of the Superintending Engineer for levying of compensation under clause 2 is legally justified and valid. The learne