Point of Law: Arbitration Agreement – Award -Scope of interference by the courts into the award is quite limited. A court considering an application under Section 30 of the Act neither sits in appeal over an award of the Arbitrator nor can it re-assess or re-appreciate the evidence or examine its sufficiency or otherwise.

JUDGMENT :

C.S. Sudha, J.

Has the Arbitrator misconducted himself by travelling beyond his jurisdiction in awarding escalation costs and interest in the absence of an escalation clause in the agreements executed between the parties, is the question that needs to be answered by us in this case.

2. The appellants and the respondent herein are the respondents and claimant respectively in the proceedings before the Arbitrator. The parties shall be referred to as described in the said proceedings. This appeal is against the judgment dated 23.3.2010 in O.P.(Arb.) No.138/1994 on the file of the Principal Sub Judge, Thiruvananthapuram. A brief narration of the facts leading to the judgment and decree of the court below:-

3. The claimant, a registered 'A' class contractor of PWD, in response to a tender notification issued by the second respondent for the work of 'Kallada Irrigation and Tree Crop Development Project -Left Bank canal formation of Poovathoor Distributory', bid in the auction and was awarded the contract, pursuant to which, he entered into an agreement dated 25.4.1986 with the respondents. The entire works as per the agreement was to be completed by 23.1.1987. The Probable Amount of Contract (PAC) was fixed at Rs.10,91,502/-. The respondent/claimant bid the auction for Rs.9,71,900/-. According to the claimant, soon after the execution of the agreement, he took all necessary steps to execute the work by making necessary arrangements for labour and materials so as to complete the work within the stipulated time. However, due to the latches and breaches on the part of the respondents, the work could not be completed in time. The work could be completed only by the end of 1992, i.e., after a delay of about 5 years, resulting in great loss and injury to the claimant. The breaches committed by the respondents are stated to be – there was inordinate delay in handing over the work site. There were electric posts, stay wire, live electric lines etc. which were not removed in time in spite of the several requests made by the claimant. Due to the existence of these obstacles, the excavation of the canal and transportation of cut earth through the site turned out to be an impossibility. When the claimant responded to the tender, he was under the impression that the respondents would be in possession of adequate vacant land near the site for dumping cut earth. Thereafter he found that they were in possession of only the minimum land required for excavation of the canal, as a result of which, he had to transport huge quantities of cut earth to far off places which was not only time consuming but also quite expensive. As per the agreement, the claimant was expected to excavate ordinary class of soil. But when the work started, he realised that at many places, after the minimum excavation was done, there was hard-rock which could not be removed with pick-axe or crowbar, as a result of which he had to resort to blasting. As some of the portions were residential areas and cutting across roads, he had to go in for controlled blasting at considerable expense. Further, as per the agreement, the construction materials like cement, M.S. items, pipe specials etc. were to be supplied by the respondents. The delay in supply and the piece meal supply of the materials also affected the progress of the work. Several communications were addressed to the respondents, but to no avail. After the work started, the claimant was compelled to carry out several extra items and excess quantity of work, which was not agreed to between the parties. The claimant was under the impression that he would be paid reasonable rates for these extra items of work. But the rates were unilaterally fixed by the respondents. Labour unrest was another factor which delayed the completion of the work and which also increased the cost of the work. There was inordinate delay in making part payments, due to which the claimant found it difficult to carry on with the work as he had borro