The main legal point established in the judgment is that in the absence of a specific provision to the contrary, all matters arising under the contract, including those concerning delayed execution of work, are arbitrable.

1. This appeal is brought by the Food Corporation of India from the Judgment of the learned Subordinate Judge, Palghat in O.S. (Arb.) No. 386 of 1982 whereby the learned Judge held that the differences between the parties were referable to arbitration. The Judge does not seem to have specifically ordered the filing of the arbitration agreement as required under section 20(4) of the Arbitration Act, 1940. The Judge also does not seem to have called upon the appellants to appoint an arbitrator as required under clause 25 of the agreement.

2. The question which directly arises in this appeal, at the instance of the Food Corporation of India, is whether the learned Judge rightly held that the disputes between the parties were referable to arbitration. Counsel for the appellants Sri P. C. Chacko submits that clause 25 which contains the arbitration agreement excludes matters otherwise provided. The matters in dispute relate to compensation payable for delayed execution of work. These are matters, counsel points out, which are specifically provided under clause 2. Accordingly, counsel submits, the court exceeded its jurisdiction in holding that the disputes between the parties were arbitrable.

3. The material portion of the arbitration clause reads:

"Clause 25.- Except where otherwise provided in the contract all questions and disputes relating to the meaning of the specifications, designs, drawing and instructions herein before mentioned and as to the quality of workmanship or materials used on the work or as to any other question, claim, right, matter or then whatsoever, in any way arising out of or relating to the contract, designs, drawings, specifications estimates, instruction, orders or these conditions or otherwise concerning the works, or the execution or failure to execute the same whether arising during the progress of the work or after the work or after the completion or abandonment thereof shall be referred to the sole arbitration of the person appointed by the Managing Director, Food Corporation of India.........."

(emphasis supplied)

The effect of this clause is that, in the absence of a provision to the contrary, all matters arising under the contract, including those concerning delayed execution of work, are arbitrable. Delayed execution of work, as we stated earlier, is precisely what is provided under clause 2. That clause says:

"Clause 2.- The time allowed for carrying out the work as entered in the tender shall be strictly observed by the contractor and shall be deemed to be of the essence of the contract on the part of the contractor and shall be reckoned from the 7th day after the date on which the order to commence the work is issued, to the contractor. The work shall throughout the stipulated period of the contract be proceeded with all due deligence and the contractor shall pay as compensation an amount equal to one percent, or such smaller amount as the Superintending Engineer (whose decision in writing shall be final) may decide on the amount......."

(emphasis supplied)

4. The argument of the appellants is that, in so far as clause 2 says that the decision of the Superintending Engineer shall be final, that is a matter which is provided otherwise than under clause 25 relating to arbitration. The appellants' counsel relies on the decision of the Delhi High Court in F.A.O. (O.S.) No. 74 of 1975 which dealt with an agreement in which there was an exclusion in the following words:

"All disputes and differences arising out of or in any way touching or concerning this agreement whatsoever (except as to any matter the decision of which is expressly provided for in the contract shall be referred to the sole arbitration of any person appointed by the Managing Director of the Food Corporation of India."

(emphasis supplied)

It was held that matters relating to demurrage and wharfage came within the words "expressly provided for in the contract" and were therefore excluded from the purview of the arbitration agreement.