Judges : P.A.MOHAMMED,P.SHANMUGAM
Joseph Vilangadan - Appellant
Versus
F.A.C.T. - Respondent
Case No : M.F. A. No. 650 of 1990
Decided On : 11/28/1997
Advocates Appeared :
K.L. Varghese For Appellant C.M. Devan (Sr. Advocate) & A.M. Shaffique For Respondent
Arbitration - Dispute between Contractor and Respondent - Ss.14,15, 30 and 33 of the Arbitration Act, 1940 - Summary of Acts and Sections: Ss.14, 15, 30, 33 of the Arbitration Act, 1940 - The court discussed the scope of the power of the court to interfere with a non-speaking award, the grounds for setting aside an award, and the jurisdiction of the arbitrator. The court found that a non-speaking award can be challenged on the grounds based on jurisdiction and can be set aside if the arbitrator has exceeded his jurisdiction. The court also examined the written statement filed by the first respondent and concluded that the arbitrator had sufficient jurisdiction to deal with the counter claim filed by the first respondent.
Fact of the Case:
The appellant, a contractor, entered into a contract with the first respondent for a construction project. Disputes arose between the parties, and the matter was referred to arbitration. The appellant filed a petition to set aside the award, particularly the provision directing the appellant to pay liquidated damages to the respondent.
Finding of the Court:
The court found that the arbitrator had sufficient jurisdiction to deal with the counter claim filed by the first respondent and concluded that the appeal was without merit. The judgment and decree under appeal were confirmed, and the appeal was dismissed.
Issues: The main contention was the award of liquidated damages claimed by the first respondent, and whether the arbitrator had exceeded his jurisdiction.
Ratio Decidendi: The court discussed the grounds for setting aside an award, the scope of the power of the court to interfere with a non-speaking award, and the jurisdiction of the arbitrator. It concluded that a non-speaking award can be challenged on the grounds based on jurisdiction and can be set aside if the arbitrator has exceeded his jurisdiction.
Final Decision: The judgment and decree under appeal were confirmed, and the appeal was dismissed. No order as to costs.
P.A. Mohammed, J.
This appeal has been tiled against the judgment and decree dated 20.6.1989 in O.P. (Arb.) No. 40 of 1987 on the file of the Principal Subordinate Judge, Parur. The appellant before us is the petitioner in the above O.P. and the respondents are the respondents before the court below.
2. The above petition has been filed under Ss.14,15, 30 and 33 of the Arbitration Act, 1940 (for short 'the Act'). In that petition the petitioner, inter alia, prayed for setting aside the award dated 15.7.1987 published by the arbitrator in the matter of dispute between the petitioner and the first respondent. It is alternatively prayed to modify the award deleting or dispensing with the provision in the award directing the petitioner to pay liquidated damages of Rs. 2 lakhs to the respondent under para 2 of page 6 of the award.
3. The case of the appellant can be summarised thus: The appellant who is a contractor doing Engineering Construction Works entered into a contract with the first respondent for the work of " ASCL Project - Site levelling construction of roads, drains, temporary security offices, etc." under work order No. 66113 dated 7.12.1985. Due to the breach of the terms of contract committed by the first respondent on various heads, particularly in the matter of rendering facilities for the work the appellant could not perform his part of the contract. However, the Bank guarantee furnished by the appellant in lieu of security deposit was sought to be encashed. In view of the aforesaid situation, dispute and differences arose between the parties to the contract and those disputes will have to be settled in arbitration in the light of the arbitration clause contained in the agreement. Appellant filed O.S.(Arb.) No. 224 of 1985 before the Principal Sub Court, Parur praying for a direction to the first respondent for filing the agreement before the court and appointing an arbitrator to settle the disputes between the parties and also to restrain the first respondent from encashing the Bank guarantee. While so, the Chairman and Managing Director of the first respondent company appointed Sri. T. Thanickachalam, the then Chief Engineer (Civil) Cochin Shipyard Ltd., Cochin-15 as the sole arbitrator as conveyed to the appellant. In view of this communication he filed a memo intimating to the court as to the appointment of the arbitrator and expressing his consent to .the said appointment for adjudication of the dispute. In view of the said memo the suit was dismissed without costs.
4. Consequently the arbitrator, second respondent, entered upon the reference and called upon the appellant to submit the claim statement with exhibits. Accordingly, the appellant submitted statement of facts and claims along with exhibits in support thereof. First respondent also submitted counter statement and documents in support thereof. In the counter statement first respondent had put forth certain claims including the claim of liquidated damages. Finally by proceedings dated 29.1.1987 the arbitrator notified the parties of preliminary hearing of the case on 22.2.1987, The second respondent finally made and published the award dated 15.7.1987. Being dis-satisfied with the award the appellant filed the present O.P. with the prayers aforesaid. Before the court below, the first respondent filed counter statements, inter alia, contending that' the petitioner had committed breach of contract causing delay in the performance of contract and hence it suffered damage. It is further pleaded that respondent was forced to invoke the Bank guarantee as envisaged in the terms of agreement and that, the arbitrator was within his powers to award liquidated damages. After the inquiry the court below refused to set aside the award dated 15.7.1987 but passed a decree according to the terms of the said award. Being aggrieved by the said judgment this appeal 'has been tiled.
5. There is no dispute that the award passed by the second respondent arbitrator
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