The court affirmed that arbitrators can adjudicate claims unless explicitly barred by applicable clauses, emphasizing the necessity of fair interpretation in arbitration agreements.

ORDER :

D.N.RAY, J.

1. Heard Ms. Prutha Bhavsar, learned advocate for Mr. Ankit Shah, learned advocate appearing for the appellant and Mr. S.H. Sanjanwala, learned Senior advocate with Mr. Dilip L. Kanojiya, learned advocate appearing for the respondents.

2. Brief facts of the case are as under:-

2.1 The appellant herein, representing the Union of India, had entered into a contractual agreement with respondent no.1, M/s Kalyanmal Madan Mohan, for execution of certain works for a contract value of Rs.1,92,66,359/-. The said contract was formalized vide Agreement No. CE(AF) A/JAM/14 of 1993-94, with the stipulated time for completion being 18 months. The work commenced on 27.11.1993 and was eventually completed on 02.08.2000. Upon completion, respondent no.1, by way of communication dated 06.11.2000, raised certain disputes pertaining to the contract and sought appointment of an arbitrator.

2.2 Pursuant thereto, an Arbitrator was appointed vide letter dated 26.04.2004, namely Brig. Amarjeet Singh. However, the said Arbitrator tendered his resignation vide letter dated 30.01.2005. Thereafter, Mr. K. Ravi Kishore (arrayed as respondent no.2 in Civil Miscellaneous Application No. 16 of 2007) was appointed as the Sole Arbitrator, vide communication dated 19.07.2005.

2.3 The Arbitrator entered upon the reference on 13.08.2005. Subsequently, on 27.03.2006, the Union of India filed an application requesting the Arbitrator to adjudicate upon the issue of arbitrability of the claims raised. Thereafter, the Arbitrator proceeded to pass an award on 15.12.2006, wherein he held that the claims were arbitrable and awarded a sum of Rs.86,899/- in favour of the Union of India, as against its claim of Rs.9,63,318/-.

2.4 Aggrieved by the arbitral award dated 15.12.2006, the appellant/original petitioner preferred Civil Miscellaneous Application No. 16 of 2007 under Section 34 of the Arbitration and Conciliation Act, 1996, seeking to set aside the said award. However, the said application came to be dismissed vide judgment and order dated 04.10.2007.

2.5 Challenging the judgment and order dated 04.10.2007, the appellant has preferred the present appeal under Section 37 (1)(b) of the Arbitration and Conciliation Act, 1996 as it stood on the date of filing, seeking the following reliefs:—

“a) This Hon’ble Court may be pleased to admit and allow this appeal;

b) The Hon'ble Court be pleased to set-aside the impugned judgement and order rendered below Exh.16 dated 04.10.2007 by the learned Principal Sr. Civil Judge, Jamnagar in C.M.A. No. 16/2007 and further be pleased to allow the appeal throughout by allowing the reliefs as set out in C.M.A. No.16/2007 preferred under Section 34 of the Act. Consequently, this Hon'ble Court be pleased to quash and set-aside the judgement and award of the sole arbitrator.

c) Such other and further reliefs as this Hon'ble Court may deem just and expedient be granted in favour of the appellant d) Costs of this appeal be provided for to the appellant.”

3. Ms. Prutha Bhavsar, learned advocate appearing on behalf of Mr.Ankit Shah, learned advocate for the appellant submitted that the claim No.1 was wrongly decided by the learned Arbitrator where, under the head of “non-payment of the final bill” an amount of Rs.17,88,683/- was awarded to the respondent. Ms. Bhavsar made a pointed reference to condition No.65 of IAFW -2249, which reads as under:-

“No further claims shall be made by the contractor after submission of the final bill and this shall be deemed to have been waived and extinguish”

3.1 She further submitted, based upon the aforesaid Clause 65, that once the contractor had accepted the final bill, these claims were not even arbitrable and therefore, the Arbitrator lacked the jurisdiction to enter upon the adjudication process an