The main legal point established in the judgment is that the court should not interfere with an arbitral award unless the arbitrator's conclusions are arbitrary, capricious, or perverse. The court's role is limited to specific grounds for setting aside the award under Section 34 of the Act.

JUDGMENT :

1. This petition is preferred under Section 34 of the J&K Arbitration and Conciliation Act, 1997 (for brevity “Act of 1997”) for setting-aside the Award dated 30th November 2020, passed by the Arbitrator in Arbitration Application titled as J&K Economic Reconstruction Company v. M/s Tarmac Road and Roof Builders, to the extent it rejected the claims of petitioner and allowed the claims of respondent-contractor.

2. The grounds of challenge, inter alia, taken by petitioner, are that Arbitrator has held respondent-contractor to be entitled to the claim of price escalation/variation for extension in time of completion beyond completion period of twelve months provided in the contract; that the parties to the contract were strictly governed by the terms and conditions the general conditions of the contact and the particular conditions of the contract; that the said general conditions of contract and/or particular conditions of contract nowhere provide for a price escalation clause in favour of respondent-contractor; that in fact petitioner vehemently pleaded before the Arbitrator that in view of clause 13.8, i.e., adjustments for change in cost, was applicable only if table of adjustment data is provided in the appendices, but no such data is provided in the appendices in the contract, the clause was not applicable; that the Arbitrator on the basis of an opinion of the Team Leader, PMC, for MRIRJK (ADB LOAN -2151 -IND) has held the respondent entitled to additional payments on account of increase in cost of material and labour for balance work beyond period of original of completion of one year not attributable to the contractor; that thereafter the Arbitrator has himself in the summary of arbitral award provided the standard price adjustment formula, even though the same was neither pleaded nor argued before the Arbitrator even otherwise the Arbitrator has not quantified any specific amount, which otherwise he was supposed to; that Arbitrator held respondent-contractor entitled to reduce liquidated damages to be charged by petitioner by reducing number of days of delay attributable to respondent from 131 days to 92 days and as such, the Arbitrator has held that liquidated damages chargeable to the claimant is Rs.1685552.00 as against Rs 2400079.00 as had been assisted by petitioner, but the Arbitrator has not provided any cogent reason as to why delay attributable to respondent has been reduced from 131 days to 92 days, in fact at page 3.11 of Chapter VIII (Conclusion and Award) the Arbitrator has clearly stated that the claimant’s pace of work reflects purely on his performance; that Arbitrator has also erred in directing that in case the award is not settled beyond December 2020, the same shall carry interest @ 6% per annum on the award; that claimant/respondent, even though wrongly directed to submit revised claim on the basis of formula referred to by Arbitrator, did not submit any revised claim to petitioner-ERA, as such, any delay beyond December 2020, which was attributable to respondent-contractor ought to have been taken care of by the award; that once Arbitrator has held claimant liable for delay of 92 days, it was obvious that supervisory staff of Consultant and Staff associated with PIU JKERA had been kept idle solely on account of omission of respondent-contractor to complete the work within time granted.

3. On the other hand, it is contention of respondent-contractor in his objections that the work was to be completed within 365 days with no specific provision for price adjustment, which was, however, completed within 1731 days with most of the delay on the part of petitioner inasmuch as petitioner has admitted in its statement of defence filed before the Arbitrator that out of 136 days of delays, 1235 days of delays were not attributed to respondent. In arbitral award, it has been made clear that petitioner, in statement of defence filed before the Arbitrator, admitted that in view of very long delay, the Pr