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1998 Supreme(Raj) 882

RAJASTHAN HIGH COURT AT JAIPUR BENCH
D.C.Dalela, J.
Rajasthan State Electricity Board - Appellant
Versus
Gammon India Limited - Respondent
S.B. Civil Misc. Appeal No. 726 of 1996.
Decided On : 13-01-1998

The court cannot interfere with an arbitrator's award merely because an alternative view is possible. The court cannot re-appreciate the material on record or substitute its own conclusion for that of the arbitrator. The arbitrator's interpretation of the contract is binding on the court.

Headnote:

ARBITRATION - AWARD - JUDICIAL REVIEW - SCOPE - INTERFERENCE BY COURT - GROUNDS - ERROR OF LAW ON THE FACE OF THE AWARD - MISCONDUCT OF ARBITRATOR - COURT CANNOT SUBSTITUTE ITS OWN EVALUATION OF THE CONCLUSION OF LAW OR FACT - COURT CANNOT RE-APPRECIATE THE MATERIAL ON RECORD - COURT CANNOT SIT IN APPEAL OVER THE AWARD AND REVIEW THE REASONS.

Fact of the Case:

A dispute arose between the appellant, Rajasthan State Electricity Board (RSEB), and the respondent, M/s. Gammon India Limited (Gammon), regarding the construction of a chimney for the Kota Thermal Power Station. Gammon submitted 18 claims, which were adjudicated by a sole arbitrator. The arbitrator awarded certain amounts to Gammon, but the RSEB challenged the award in respect of certain claims. Gammon filed cross-objections challenging the arbitrator's decision on other claims.

Finding of the Court:

The court held that the arbitrator's award could not be set aside merely because an alternative view was possible. The court also held that the arbitrator was the sole judge of the quality and quantity of evidence and that the court could not re-appreciate the material on record or substitute its own conclusion for that of the arbitrator. The court further held that the arbitrator's interpretation of the contract was binding and that the court could not interfere with the award on the ground that an alternative interpretation was possible.

Issues: 1. Whether the court could interfere with the arbitrator's award on the ground that an alternative view was possible? 2. Whether the court could re-appreciate the material on record or substitute its own conclusion for that of the arbitrator? 3. Whether the arbitrator's interpretation of the contract was binding on the court?

Ratio Decidendi: 1. The court held that it could not interfere with the arbitrator's award on the ground that an alternative view was possible. The court reasoned that the arbitrator was the sole judge of the quality and quantity of evidence and that the court could not re-appreciate the material on record or substitute its own conclusion for that of the arbitrator. 2. The court held that it could not re-appreciate the material on record or substitute its own conclusion for that of the arbitrator. The court reasoned that the arbitrator was the sole judge of the quality and quantity of evidence and that the court could not re-appreciate the material on record or substitute its own conclusion for that of the arbitrator. 3. The court held that the arbitrator's interpretation of the contract was binding on the court. The court reasoned that the arbitrator was the sole judge of the quality and quantity of evidence and that the court could not re-appreciate the material on record or substitute its own conclusion for that of the arbitrator.

Final Decision: The court dismissed the RSEB's appeal and allowed Gammon's cross-objections. The court upheld the arbitrator's award in respect of the claims challenged by the RSEB and set aside the arbitrator's decision on the claims challenged by Gammon.

JUDGMENT

1. - Respondent-M/s. Gammon India Limited (who was claimant before the learned Arbitrator) submitted a tender for 'Construction of 180 M high three-fuel RCC Chimney for Kota Thermal Power Station, Kota, (Specification No. 3325), and, the same was accepted by the appellant-Rajasthan State Electricity Board (R.S.E.B), on 31.7.1984 for Rs. 2,80,66,500/-, and, the work was commenced on 15.8.1984 and was completed on 15.7.1988. Certain disputes and differences arose between the parties, and, the respondent claimant solicited arbitration to resolve the disputes. Shri C.S. Hukmani, (Retired Chief Engineer, Irrigation, Rajasthan), was appointed as Sole Arbitrator.

2. The respondent claimant submitted its 18 Claims and the appellant-respondent submitted its reply thereto. Both the parties submitted documentary evidence. No oral evidence was adduced before the learned Arbitrator. After hearing both the sides, and, considering the entire material on record, the learned Arbitrator made and signed the award, on 2.3.1994.

3. According to the appellant, Claims Nos. 4, 5, 6 & 7 were rejected by the learned Arbitrator. Claim No. 9 for Rs. 1,06,560/- was accepted by the learned Arbitrator, to the extent of Rs. 5,577/-, only. During the proceedings before the learned Arbitrator, Claim No. 12 was compromised by the parties. Regarding Claim No. 16, no award has been passed by the learned Arbitrator.

4. The respondent moved the learned District Judge, Kota, for making the award of the learned Arbitrator as rule of the Court. The appellant filed its objection. The matter was transferred to the learned Additional District Judge No. 1, Kota, who after hearing both the sides, vide his order dated 2.4.1996 set aside the award in respect of the Claims No. 10, 13 & 15, and, upheld the award in respect of other remaining Claims. Feeling aggrieved thereby, the learned (who was respondent before the learned Arbitrator) has preferred this appeal.

5. The appellant has challenged the award and the order of the learned Additional District Judge No. 1, Kota, in respect of the Claims Nos. 1, 2, 3, 8,11, 14 & 17. According to the appellant, the award with regard to the Claims Nos. 1,2,3,8,11, 14 & 17 is required to be set aside. While contesting the appeal, the respondent has preferred cross objection with regard to the Claims Nos. 10, 13 & 15 which were allowed by the learned Arbitrator, but, were set aside by the learned Additional District Judge No. 1, Kota.I have heard the argument of both the sides.

6. It is well-known that arbitration is the forum selected by the parties to get their disputes resolved. If the parties have selected their own forum, the deciding forum must be conceded the power of appraisement of evidence. The arbitrator is the sole judge of the quality as well as the quantity of evidence and it will not be for the Court to take upon itself the task of being a Judge on the evidence before the arbitrator. In case State of Rajasthan v. Puri Construction Co. Ltd., (1994) 6 SCC 485 , Hon'ble the Supreme Court has laid down that the Court cannot substitute its own evaluation of the conclusion of law or fact to come to the conclusion that the arbitrator had acted contrary to the bargain between the parties. Whether a particular amount was liable to be paid is a decision within the competency of the arbitrator. By purporting to construe the contract the Court cannot take upon itself the burden of saying that this was contrary to the contract and as such beyond jurisdiction. If on a view taken of a contract, the decision of the arbitrator on certain amounts awarded is a possible view though perhaps not the only correct view, the award cannot be examined by the Court. Where the reason has been given by the arbitrator in making the award the Court cannot examine the reasonableness of the reasons. In the case of B.V. Radha Krishna v. Sponge Iron India Ltd., (1997) 4 SCC 693 , Hon'ble the Supreme Court has laid down that the Court while considering t






















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