The court's decision emphasized the limited scope of interference with an arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996, and the requirement for findings to be supported by the materials on record.

K. Surendra Mohan, J.

1. This appeal is directed against an order dated 27/01/2011 in Arb. O.P. No. 1726 of 2009. The Original Petition was filed by the appellant herein under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act' for short) seeking to set aside an award passed by the Arbitrator on 25/08/2009. As per the order appealed against, the District Court has dismissed the Original Petition holding that there were no grounds to set aside the arbitral award. The aggrieved appellant is before us. The appellant is a fully owned Government Society. It has an Info Park at Kakkanad, Ernakulam District. The work of construction of an IT building, having an area of 2 lakhs sq. ft. and a service yard of 17600 sq.ft spread over ground plus nine floors was awarded to the respondent Contractor as per work order dated 25/08/2003, they being the lowest tenderer. Though the time limit for completion of the work was specified as nine months, the period was subsequently extended and the construction was finally completed only in October, 2005. After completion of the work, the respondent filed O.S. No. 729 of 2006 before the Sub Court, Ernakulam putting forward a number of claims against the appellant. During the pendency of the suit, the parties agreed to have the disputes settled through arbitration. Accordingly, both parties submitted the agreed terms of reference. The name of Justice K. John Mathew, a retired Judge of this Court, was suggested by both parties. The Sub Court thereupon appointed Justice K. John Mathew as Arbitrator and referred the terms agreed to by both parties, for arbitration.

2. The Arbitrator entered upon the reference, considered the respective contentions of the parties and passed an award dated 25/08/2009. As per the award, the Arbitrator found that there was initial delay on the part of the appellant in handing over the site and in supplying the drawings of the work. Therefore, the action of the appellant in levying and recovering liquidated damages from the respondent was found to be unjustified. Accordingly, the amounts so recovered were directed to be refunded. The Arbitrator further found that the Contractor was entitled to escalation of price with respect to steel and therefore held the respondent entitled to recover an amount of Rs. 30,87,655/-. It was challenging the said award under Section 34 of the Act that Arb.O.P. No. 1726 of 2009 was filed, as stated above.

3. It was contended on behalf of the appellant that, the finding of the Arbitrator holding the appellant responsible for the delay was wrong. According to the appellant, it was the respondent who was responsible for the delay. The delay was caused mainly due to the deficiency in management of the construction and the project by the respondent. There was no advance planning even for procurement of crucial items like, reinforcement steel, electrical equipments, fire fighting equipments etc. The entire work was given on sub-contract to others and the co-ordination between them was very bad. The construction equipments used were very old and resulted in break down on many occasions. The labour force was inadequate and the work was carried out only during day time though the contract had stipulated for working during the night also, since the entire work was to be completed within 9 months. A floor of 25000 sq.ft was cast in 12 or 13 pieces. A contractor with adequate resources could have cast 20000 to 25000 sq.ft in a single continuous pore. It was contended that day-to-day work of planning had no relation to the overall execution plan. Only a limited quantity was planned and executed on daily basis. On many occasions even that could not be achieved. Delay occurred in the procurement and installation of the electrical equipments, firefighting equipment and fire alarm system. There was delay in procurement of reinforcement steel. Similar delays occurred in other matters also. It was therefore contend