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2010 Supreme(Mad) 146

High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE M. CHOCKALINGAM & THE HONOURABLE MR. JUSTICE T. RAJA
M/s.Crompton Greaves Ltd.
Versus
D.T.M.Construction (India) Ltd. & Others.
OSA No.10 of 2010 & MP No.1 of 2010
Decided on : 19-01-2010

Advocates appeared:
For the Appellant:Nageswaran Advocate, For the Respondents:R1, Dola Bash for N.Thiagarajan Advocates.

The obligation to raise jurisdictional questions before the arbitrator and the limited supervisory role of the courts in reviewing arbitral awards.

Headnote:

Arbitration - Dispute between Contractor and Sub-contractor - Arbitral Tribunal's Jurisdiction - Sec. 33 of the Arbitration and Conciliation Act, 1996 - [ARBITRATION] - [CONSTRUCTION CONTRACT] - [Sec. 25, Sec. 33, Sec. 34, Sec. 37 of the Arbitration and Conciliation Act, 1996] - The court affirmed the order of the learned Single Judge, holding that the Arbitral Tribunal had jurisdiction to arbitrate the dispute between the contractor and sub-contractor. The court emphasized the obligation to raise jurisdictional questions before the arbitrator and the limited supervisory role of the courts in reviewing arbitral awards.

Fact of the Case:

The case involved a dispute between a contractor and a sub-contractor regarding an arbitral award for a construction project at Calicut Airport. The appellant challenged the award, claiming that the Tribunal exceeded its jurisdiction.

Finding of the Court:

The court affirmed the order of the learned Single Judge, stating that the Tribunal had jurisdiction to arbitrate the dispute between the parties. The court emphasized the obligation to raise jurisdictional questions before the arbitrator and the limited supervisory role of the courts in reviewing arbitral awards.

Issues: The main issues were whether the Arbitral Tribunal had jurisdiction to arbitrate the dispute between the contractor and sub-contractor, and whether the appellant's challenge to the award was valid.

Ratio Decidendi: The court held that the appellant failed to raise jurisdictional questions before the Arbitral Tribunal and participated in the arbitral proceedings, thus affirming the Tribunal's jurisdiction. The court also emphasized the limited supervisory role of the courts in reviewing arbitral awards.

Final Decision: The original side appeal was dismissed, confirming the order of the learned Single Judge. The parties were directed to bear their own costs.

Judgment :-

M.CHOCKALINGAM, J.

This intracourt appeal challenges an order of dismissal of O.P.No.280 of 2005 seeking to set aside an arbitral award dated 27. 2003, by the arbitral tribunal consisting of the respondents 2 to 4.

2. Admittedly, pursuant to a contract for construction of a new International Terminal Building at Calicut Airport in Kerala from the National Airport Authority of India (NAAI) secured by the appellant/petitioner, the same work was awarded to the first respondent under a letter of indent dated 19. 1993. The value of the work was fixed at Rs.3,00,51,583/-, and the date of commencement of the work was fixed as 19. 1993 and the completion on 2. 1995. In view of the dispute that arose between the parties, the first respondent nominated the second respondent as their arbitrator, and the appellant nominated the third respondent as their arbitrator. The respondents 2 and 3 nominated the fourth respondent as the Presiding Officer. All of them constituted the Arbitral Tribunal. Before the Arbitral Tribunal, the first respondent made extensive claims on various heads. The appellant also filed a counter claim. The tribunal made an award directing the appellant to pay the first respondent a sum of Rs.14,89,655/-with interest at the rate of 12% per annum from 3. 99 to 22. 2003 and thereafter at the rate of 9% per annum on the said amount of Rs.14,89,655/-till the date of payment. Challenging that award, the appellant filed the instant OP.

3. Onenquiry, the learned Single Judge took the view that the OP was devoid of merits and hence dismissed the same. Thus this appeal at the instance of the appellant.

4. Advancing arguments on behalf of the appellant, the learned Counsel would submit that the appellant did not question the jurisdiction of the Arbitral Tribunal but only questioned the exercise of their jurisdiction; that originally, there was a dispute referred to the Tribunal as regards the entitlement of the first respondent herein for payment from the appellant herein, and the Tribunal clearly gave a finding on that reference; that the clear finding of the Tribunal is that the first respondent herein cannot have any payment in excess of that which is paid or payable as per the award of the sole arbitrator by the NAAII to the appellant; that while so, the Tribunal strayed beyond the scope of the reference and adjudicated the claims of the first respondent; that nothing prevented the Tribunal from directing the appellant to file the award of the sole arbitrator in respect of the dispute between the appellant and the NAAI; that the observation of the Tribunal was to the effect that the appellant undertook to pass on the benefit, if any, in their favour passed by the sole arbitrator, less their margin as agreed; that apart from that, the award itself is beyond the scope of the contract; and that in the claim petition, the first respondent has clearly admitted that all terms and conditions which were specified in the work order of NAAI given to the appellant were in turn given to the first respondent under work order dated 19. 1993.

5. Added further the learned Counsel that it is pertinent to note that the claim is not based on the terms of the contract but on law of contract; that the Tribunal has not considered that the contract between the appellant and NAAI and the contract between the appellant and the first respondent herein are back to back; that the first respondent is estopped from pleading compensation over and above the price variation agreed to and paid; that the Arbitral Tribunal awarded Rs.10,01,724/-based on a formula which is neither pleaded nor proved by the first respondent; that the Tribunal cannot undertake to provide or substitute what is not pleaded or proved; that the award itself is against the contract; that there is no contract to pay liquidated or unliquidated damages in case of delay; that as per Sec.25 of the Act, there must be evidence for every claim; that without evidence or adducing











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