The arbitral tribunal's interpretation of a contract clause is generally within its jurisdiction and not subject to judicial review unless it is wholly contrary to law.

D. MURUGESAN, J.

1. O.S.A.No.463 of 2009 is filed by Southern Railway represented by its Chief Engineer (Construction), Bangalore and O.S.A.No.464 of 2009 is filed by South Western Railway represented by its Chief Engineer (CN)/Central, Bangalore Cantonment, Bangalore questioning the common order dated 8.6.2007 dismissing the original petitions filed by the appellants. The parties are referrred to as arrayed in these original side appeals.

2. The controversy arose under the following set of facts. By an agreement dated 4.8.99 entered into between the appellants and the first respondent, the contract for construction of road under bridge near Lottegollahalli, between Yeshwanthpur and Yellahanka was awarded in favour of the first respondent. Clause 24.6 of the special conditions of contract relates to vitiation clause and the same reads as under:-

"24.6. When ever vitiation of contract is likely to occur either due to increase or decrease in the quantities of certain item(s) the tenderer/contractor shall be paid for such items at a rate which being the one quoted by the other tenderer(s) whose offer would become the lowest due to the vitiation."

The above clause was subsequently modified as under:-

"In the event of vitiation occuring due to increase or decrease in quantities amongst the first, second and third lowest tenderers, the total value of the work as done shall be calculated at the rates offered by the three lowest tenderers and the amount payable shall be limited to the lowest aggregate value as worked out."

3. In terms of the above vitiation clause, the appellants started to recover monies from the bills of the first respondent by placing reliance on that clause. The first respondent approached this Court by filing O.A.No.535 of 2000 under Section 9 of the Arbitration and Conciliation Act, 1996 and sought for an order of injunction restraining the railway administration from invoking the vitiation clause and recovering monies from their bills pending conclusion of arbitration proceedings. That application was dismissed on 12.7.2000. The first respondent filed an appeal in O.S.A.No.233 of 2000 before a Division Bench of this Court and the Division Bench by order dated 28.9.2000 directed interim payment of a sum of Rs.10 lakhs to the first respondent and also directed the arbitral tribunal to enter upon the reference within a period of one week with a further direction that the tribunal should consider the matter of dispute framed in terms of the reference and in addition to the same, to consider the scope and applicability of vitiation clause. The tribunal was appointed by order dated 22.9.2000 constituting respondents 2 to 4. The arbitral tribunal made an interim award dated 27.2.2001 only in regard to the vitiation clause and held that the recoveries made towards the vitiation from the contractor for the work done so far to be refunded without interest. That interim award was questioned by the railway administration in O.P.No.469 of 2002.

4. Subsequently, by reason of poor performance of the contract by the first respondent, the contract was terminated at their risk and cost on 26.6.2001. A risk tender was also signed and the remaining work was entrusted to Modern Engineering Works, Nellore under letter of acceptance dated 12.9.2001. The unfinished portion of the work, calculated according to the rate quoted by the first respondent, worked out to Rs.1,35,50,685.94, whereas the risk tender for the same quantum of work was Rs.1,02,78,521.51. The arbitral tribunal passed a final award dated 21.5.2005 for a total sum of Rs.8,83,085.00 in respect of nine claims raised by the first respondent. In respect of scope and applicability of the vitiation clause, the tribunal held that the interim award formed part of the final award as well.

5. The appellants, though had accepted the final award for a sum of Rs.8,83,085.00, questioned that part of the award of the tribunal relating to the scope and applicability of