The main legal point established in the judgment is that the court upheld the arbitration award, emphasizing the proper appreciation of facts and application of the law by the Arbitrators. The court also modified the interest rate from 15% to 9% but upheld the rest of the award.

S.R. Brahmbhatt, J.

1. The appellant, who happen to be the applicant in Civil Misc. Application (Arbitration) No. 216 of 2000 in the Court of District Judge at Vadodara, have taken out this Appeal under Section 96 of the Code of Civil Procedure as well as under the provisions of the Arbitration and Conciliation Act, 1996, challenging the judgment, order and decree dated 5.5.2001 passed in Civil Misc. Application (Arbitration) No. 216 of 2000 for the grounds mentioned thereunder.

2. Facts in brief, as could be culled out from the proceedings deserve to be set out in brief for appreciating the controversy between the parties.

3. The appellant being a Public Limited Company substantially owned by Union of India, engaged in Oil and Gas Exploration and has one of the offices at Ankleshwar known as 'Ankleshwar Project'. The respondent was awarded contract for the work of drilling of oil wells on meter rate basis in Gandhar belt in Gujarat. The contract was executed on 18.2.1993. On account of dispute arose between the parties in respect of contract work in the payment, the same was referred to Arbitrators, who in tern, nominated the Presiding Arbitrator, who rendered the award on 28/30.6.2000, awarding an amount of Rs. 33,19,822/- against the claim No. 1 and Rs. 1,07,18,461.99ps as regards the claim No. 2 and Rs. 71,87,638.02ps as interest on both the aforesaid claims @ 15% p.a. till the date of the award. The Tribunal also awarded interest at the rate of 18% p.a. over Rs. 2,12,25,922.10ps (total of three items aforesaid), from the date of award till the date of payment in favour of the respondent and against the appellant.

4. The said award was assailed in the proceedings of Civil Misc. Application being Civil Misc. Application (Arbitration) No. 216 of 2000, which came to be rejected by the concerned Court vide its judgment, order and decree dated 5.5.2001, which also the subject matter of challenge in the present proceedings.

5. The learned Arbitrators in their Award have summarized the gist of claim and recorded that there was no counter claim which could be seen from the following:

"The claimants filed their State of Claim on 4.7.1998. Respondents filed their reply to the Statement of Claim on 3.8.1998. The Claimants filed their rejoinder on 18.8.1998. The Claimants have made four claims in their Statement of Claim. The Respondents have not made any counter claim. Claim No. 1 pertains to deduction by the Respondents of Rs. 25,36,497/- from the invoices of the Claimants for the month of February and March, 1997 and the consequent deduction of Rs. 7,83,325/- towards reimbursement of bit cost for Well No. GNOI. The second claim pertains to increase in the price of High Speed Diesel (HSD) during the execution of the contract. The third claim is relating to interest and the fourth claim is the cost of arbitration. Thus, there were two claims which required to be adjudicated on the basis of evidence led by the parties. However, claim No. 3 and 4 would follow the determination of Claim Nos. 1 and 2. Consequently, the Tribunal, after the pleadings were completed, framed only two points for determination on 22.8.1998, which were as follows:

"1. Whether the Claimants establish that the operating cost had increased substantially because of the increase in the price of High Speed Diesel Oil after the opening of the price bid?

2. Whether the respondents establish that the complications in Well GNOI that arose between 16.2.1997 and 19.3.1997 were due to the negligence of the Claimant in drilling the Well upto 3050 meters?"

6. The Arbitrators have also recorded that though in reply, there was no plea of limitation was taken so far as claim No. 2 i.e. for HSD price increase during the course of proceedings and at the time of recording of evidence, an application came to be filed taking up the said objection and Tribunal permitted the same vide its order dated 30.10.1998. The said plea and submission thereon are articulately stated by the Tribu