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1983 Supreme(Gau) 18

GAUHATI HIGH COURT
D.Pathak, K.N.Saikia, JJ.
Union of India, Represented By Commander Works Engineer, Gauhati -Appellant
Versus
Bharat Builders -Respondent
MA. (F) No. 47 of 1982
Decided On : 11-02-1983

Advocates Appeared:
J.Singh, S.N.Chetia

An arbitrator's award is final and binding on the parties and cannot be set aside unless it is shown that the arbitrator misconducted himself or that the award is erroneous on the face of it.

Headnote:

ARBITRATION - Award - Setting aside - Grounds - Misconduct of Arbitrator - Error of law on the face of the award - Interpretation of arbitration clause - Scope of judicial review.

Fact of the Case:

The appellant, a construction company, entered into a contract with the respondent, a government agency, for the construction of a school building. The contract contained an arbitration clause providing for the resolution of disputes by a sole arbitrator. Disputes arose between the parties, and the matter was referred to arbitration. The arbitrator made an award in favor of the respondent, and the appellant filed a petition under Section 30 of the Arbitration Act, 1940, to set aside the award on the ground of misconduct by the arbitrator.

Finding of the Court:

The court held that the arbitrator did not misconduct himself and that the award was not liable to be set aside. The court found that the arbitrator had jurisdiction to decide the disputes arising out of the contract and that the award was final and binding on the parties. The court also held that the arbitrator did not commit any error of law on the face of the award and that the court could not review the award and correct any mistake in the arbitrator's adjudication.

Issues: 1. Whether the arbitrator misconducted himself in making the award? 2. Whether the award was erroneous on the face of it? 3. Whether the court could review the award and correct any mistake in the arbitrator's adjudication?

Ratio Decidendi: 1. The court held that the arbitrator did not misconduct himself in making the award. The court found that the arbitrator had jurisdiction to decide the disputes arising out of the contract and that the award was final and binding on the parties. The court also held that the arbitrator did not commit any error of law on the face of the award and that the court could not review the award and correct any mistake in the arbitrator's adjudication. 2. The court held that the award was not erroneous on the face of it. The court found that the arbitrator did not commit any error of law on the face of the award and that the court could not review the award and correct any mistake in the arbitrator's adjudication.

Final Decision: The court dismissed the appeal and upheld the award.

Saikia, J.-

This is an appeal under Section 30(1) of the Arbitration Act, 1940, shortly 'the Act', from the judgment of the Assistant District Judge No. 1 at Gauhati refusing to set aside the Arbitrator's award under Section 30 of the Act.

2. The appellants having accepted on 25.8.77 the tender of the respondents, M/s. Bharat Builders, for construction of the Kendriya Bidyalaya at Khanapara under the Garrison Engineer (shortly 'G.E.'), Narengi for the lump sum of Rs. 14,82,761.93 paise, to be completed within twelve months ending 4.9.78, the work order was issued by the G.E., Narengi in 1.9.77, with the commencement date as 5.9.77. The date of completion was later extended and the work was actually completed on 29.1.80, and the final bill paid on 6.9.80. Disputes having arisen out of the contract between the parties those were referred, in accordance with the arbitration clause of the agreement, to a sole Arbitrator before whom the respondents made several claims totalling Rs. 5,02,698. 80, to which the appellants filed objections; and the Arbitrator after hearing the parties made and published the award dated 23rd July, 1981 with notice to the parties. While the respondent filed a petition in the Court of the Assistant District Judge, along with a copy of the award, for passing a decree in terms of the award, the appellants submitted a petition under Section 30 of the Act for setting aside the award contending that the Arbitrator made the award beyond the terms of the agreement between the parties and without considering all the relevant matters and thereby he misconducted himself. The Court rejected the petition and passed a decree in terms of the award. Hence this appeal.

3. Mr. S.N. Chetia, the learned Additional Central Govern­ment Standing Counsel, assailing the award in respect of Claims A. 1 and A. 3 only, submits, inter alia that to that extent the award is contrary to clause 11 (C) of the agreement between the parties to the contract; that in allowing these two claims the Arbitrator went beyond the agreement and thereby misconducted himself wherefore the award, to that extent, is liable to be set aside; and that the lower Court erred in law in rejecting the appell­ant's petition under Sec. 30 of the Act.

4. Mr. J. Singh, the learned counsel for the respondents, submits that the award being a non-speaking one and it having not referred to any agreement or appended any note or document it is not permissible for this Court to look into the terms of the agreement; that the Arbitrator has not misconducted himself; and that the learned Court below rightly rejected the petition under Sec. 30 of the Act and passed the decree in terms of the award.

5. The precise questions raised in this appeal, therefore, are whether on the facts and in the circumstances of the impugned non-speaking award it is permissible for this appellate Court to look into the clauses of the agreement and to set aside the award if found to be contrary thereto; and whether giving of the award contrary to the terms of the agreement may amount to misconduct on the part of the Arbitrator ?

6. The reference to the sole Arbitrator was made in this case under Clause 70 of the agreement, the relevant portion of which runs thus :

"70. Arbitration.-All disputes, between the parties to the Contract (other than those for which the decision of the C. W. E. or any other person is by the Contract expressed to be final and binding) shall, after written notice by either party to the Contract to the other of them, be referred to the sole arbitration of an Engineer Officer to be appointed by the authority mentioned in the tender documents.

The Arbitrator shall t be deemed to have entered on the reference on the date he issues notice to both the parties, asking them to submit to him their statement of the case and pleadings in defence.

The Aribtrator may, from time to time with the consent of the parties, enlarge the time upto but not exceeding one year from the date of his entering










































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