Judges : VARGHESE KALLIATH,RAMAKRISHNAN
State of Kerala - Appellant
Versus
Mythiri Constructions - Respondent
Case No : M.R.A. No. 711 of 1988
Decided On : 08/09/1990
Advocates Appeared :
Government Pleader (M.C. John) For Appellant MA. George For Respondent
Arbitration - Dispute over Dam Project - Arbitration Act - S.20, S.30 - Interest on Award - Jurisdiction of Arbitrator - Pendente Lite Interest
Fact of the Case:
The State of Kerala appealed the decree in O.P. (Arb.) No. 60 of 1986, challenging the appointment of an arbitrator and the subsequent award in favor of the contractor for the Chimoni Dam Project. The appellants contested the arbitration provision in the agreement, but the court appointed an arbitrator and upheld the award.
Finding of the Court:
The court found that the arbitrator had jurisdiction to adjudicate the matter, and the non-speaking award could not be challenged on the grounds of reasonability. The court also addressed the issue of interest on the award, determining the periods for which interest could be awarded.
Issues: The issues included the validity of the arbitration provision, the jurisdiction of the arbitrator, and the award of interest on the disputed amount.
Ratio Decidendi: The court held that the arbitrator had jurisdiction to adjudicate the matter, and the non-speaking award could not be challenged on the grounds of reasonability. The court also clarified the periods for which interest could be awarded, based on the date of reference and the date of award.
Final Decision: The court confirmed the award, deleted interest for certain periods, and modified the award to specify the applicable interest rates for different periods.
VargheseKalliath, J.
This is an appeal by State of Kerala, represented by the Secretary to Government, Water & Power Department and the Superintending Engineer, Irrigation Central Circle, Trichur, challenging the decree in O.P. (Arb.) No. 60 of 1986 of the Sub Court, Irinjalakuda. Respondent herein was the contractor for the work of Chimoni Dam Project - Construction of Masonry Dam Block No. 15 upto 73 M and Block Nos. 16 & 17 up to 81 MSL. The agreement in question is dated 24-1-1979.
2. When disputes arose, respondent herein filed O.S.226/81 before the Subordinate Judge's Court, Irinjalakuda under S.20 of the Arbitration Act, hereinafter referred to as 'the Act', for filing the agreement and also to refer the dispute to an arbitrator appointed by court. This suit was contested by the appellants. In their written statement it was contended that clause 3 of the main agreement and clause 24 of the notice inviting tenders, which are the relevant arbitration clauses have been specifically deleted from the agreement and there is no arbitration provision for the concerned contract. The court relying on the decision reported in 1983 KLT 583 (State of Kerala v. Joseph) held that the contentions raised by the appellants herein are untenable and the agreement also provides for arbitration if disputes have to be settled between the contracting parties. Accordingly, the court appointed Shri P. V. Joseph (Retired Chief Engineer) as the sole arbitrator.
3. Respondent raised several claims numbering 26. All the claims were seriously disputed before the arbitrator by the Department. A non-speaking award was passed by the arbitrator. The arbitrator allowed certain claims and rejected certain other claims. He allowed claim Nos. 1,4,7,11,13,14,21,23,24 and 25. The award was filed before the court. Appellants objected the award and also prayed for setting aside the award. The court below negative the contentions raised by the appellants and passed a judgment and decree in terms of the award. Appellants are aggrieved. They appeal.
4. Several contentions were raised before us including the contention that reference by the court itself is bad, since the decision relied on by the learned judge, viz., 1983 KLT 583 has been subsequently overruled by a Full Bench of this court in M.F.A No. 789/87. Anyhow, it has to be noted that the judgment in O.S. No. 266/81 was not challenged and it became final. Not only it became final, but also the directions in the judgment were implemented. An arbitrator was appointed and he has passed the award. In these circumstances, it is not possible to challenge the award itself on the ground that the arbitrator lacked jurisdiction to adjudicate the matter.
5. In regard to the reasonability of the amount awarded on the various claims, being a non-speaking award, the appellants were not able to persuade the court below to set aside the award. It is now well settled by the decisions of the Supreme Court that in a non-speaking award, the court cannot go into the question of reasonability of the amount awarded. It has to be noted even in a reasoned award, the Supreme Court had occasion to say that the court cannot go into the question of reasonability of the reasons given in the award. The court below found that there is no error apparent on the face of the award and only if the appellants were able to satisfy the court that there is some error apparent on the face of the award, the award can be set aside. No ground which would satisfy the court under S.30 of the Act was pointed out before the court below to convince the court that the award is liable to be set aside. The court below rightly passed a judgment and a decree on the terms of the award.
6. Before us, counsel for the appellants submitted that the award provides for interest and the provisions regarding interest in the award are not justifiable and the main argument advanced before us was confined to the correctness of the interest awarded by the arbitrator.
7.
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