The main legal principle established in the judgment is that the arbitrator's role is to arbitrate within the terms of the contract and not to interpret or rewrite the contract. The arbitrator cannot rework the bargain between the parties and must decide and pass an award within the conditions of the contract.

JUDGMENT :

(N.V. ANJARIA, J.)

1. The present First Appeal under Section 37 of the Arbitration and Conciliation Act, 1996 arises out of order dated 5.5.2016 of learned Additional District Judge, Gandhinagar passed in Civil Miscellaneous (Arbitration) Application No.115 of 2011. Thereby, the court below dismissed the said application and confirmed the award dated 29.6.2011 passed by the arbitral tribunal.

2. In the final award dated 29.6.2011 of the sole arbitrator, the following was the operative part,

“(i) Claim of the claimant for Rs.24,85,897/- (Rs.Twenty four lac eighty five thousand eight hundred and ninety seven) for deduction by respondent from bill nos.1 to 23 is allowed and the respondent – ONGC is directed to pay this amount with interest at the rate of 12% from the date of declaration of this award till realization.

(ii) The claim of Rs.10,70,000/- (Rs. Ten lac seventy thousand) for extra work and the claim of Rs.11,31,368/- (Rs. Eleven lac thirty one thousand three hundred and sixty eight) for alleged insufficient supply of effluent are rejected.

(iii) In the facts of the case, as success is almost equally divided between the parties, there should be no order as to costs.”

3. The appellant Oil and Natural Gas Corporation Limited (ONGC) had entered into agreement dated 25.5.2007 with the respondent for operation, maintenance and management of ONGC Installation Effluent Treatment Plant, GGS-III, Navagam and Water Injunction Plant, Vasna. The contract was for the period of two years commencing from 4.5.2007, and to expire on 3.5.2009. It was stated that the contract specifically provided the mode and manner in which the respondent was required to operate the effluent treatment plant. It also provided about the manner for making payments to the respondents. All the specifications of the effluent were mentioned in the contract.

3.1 The contractor completed the contract work on 3.5.2009. The respondent raised for the first time certain claims on 5.5.2009 thereunder various amounts were claimed from the appellant corporation. Before the arbitrator in the statement of claim the claims which were raised, included the first claim for Rs.24,85,897/- on the ground that the deduction was wrongly made by the appellant ONGC from the bill Nos.1 to 23 raised by the claimant. The second claim was in relation to extra work as per the bill No.24 dated 5.5.2009 for Rs.10,70,000/-. Third claim was Rs.11,31,368/- as per the bill No.25 in relation to short supply of effluent by ONGC on the ground that it was less than the contractual specific average quantity of the effluent per day. Fourth claim was regarding interest on the claims at the rate of 18% per annum.

3.2 In the written statement filed on 14.2.2011 before the Arbitrator it was inter alia contended that the claimant was bound to act in accordance with the contract and perform the contractual terms and conditions. It was contended that the claimant had failed to achieve the requisite standard specified in the contract and the level of Total Soluble Solids (TSS) was in excess of

3.3 In the final arbitral award dated 29.6.2011, the sole arbitrator found that the claim Nos.2 and 3 since were belatedly raised, were not tenable. The tribunal therefore rejected the claim No.2 which was for Rs.10,70,000/- and claim No.3 for Rs.11,31,368/-. The arbitral tribunal, however accepted the claim No.1 of the respondent by holding that the appellant was liable to pay the amount of Rs.24,85,897/- towards the amount of deduction made from the bill of the respondents for non-compliance of the parameters required to be met regarding the effluent.

3.4 It is in against and in respect of the said award passed for the said claim by the arbitrator holding the ONGC liable to pay the amount towards deduction made for not meeting with the effluent parameters, that the present appeal is addressed. The question