Jyotsna Rewal Dua, Judge

Objections preferred by the appellants under Section 34 of the Arbitration and Conciliation Act, 1996 (in short ‘the Act’) against the award passed by the learned Arbitrator on 15.09.2017 were dismissed by the learned District Judge on 15.06.2022. Feeling aggrieved, recourse has been taken by the appellants to Section 37 of the Act.

2. Relevant factual matrix of the case is that:-

2(i). An agreement was executed on 28.04.2007 between the respondent/claimant and the appellants for construction of balance work of Tara Devi Gumber Road in Km 0/0 to 11/720 (SH: Formation cutting including R/walls, Soiling, M/T cross drainage, side drain and parapets). The agreement contained Clause No.25 for referring the dispute/differences, which may arise between the parties, to arbitration.

2(ii). Differences arose between the parties. Accordingly, the Superintending Engineer, Arbitration Circle, HPPWD Solan was appointed as the Sole Arbitrator for deciding and making the award regarding claims and disputes made by the respondent/claimant and also the counter claim preferred by the appellants.

2(iii). The respondent/claimant preferred three claims, viz. Claim No.1 for Rs.17,99,012/- on account of price escalation; Claim No.2 for Rs.1,46,540/- on account of illegal recovery of stones; and claim No.3 towards interest @ 18% per annum on the overdue payment. The appellants preferred counter claim for Rs.9,46,280/- on account of compensation for the delay in execution of the work.

2(iv). Learned Arbitrator passed the award on 28.11.2013, allowing Rs.13,75,233/- on account of price escalation under Claim No.1 of the respondent/claimant. The respondent/claimant did not press claim No.2, which was treated as withdrawn. No compensation was awarded to the respondent/claimant for claim No.3. Counter claim preferred by the appellants was also not allowed.

2(v). The respondent/claimant filed an appeal against the award dated 28.11.2013 under Section 34 of the Act before the learned District Judge. This appeal (Arbitration Case No.1-S/2 of 2014) was decided on 29.09.2016. The case was remanded back to the learned Arbitrator for decision afresh in accordance with law.

2(vi). Learned Arbitrator again entered into the reference on 17.10.2016. Award was finally passed on 15.09.2017. The respondent/claimant was awarded Rs.13,71,829/- on account of price escalation against Claim No.1.

2(vii). The appellants preferred objections under Section 34 of the Act against the award dated 15.09.2017 before the learned District Judge, Shimla. The objections were dismissed on 15.06.2022.

In the above background, the appellants have preferred the present appeal under Section 37 of the Act against the judgment dated 15.06.2022.

3. Submissions:-

3(i). Learned Deputy Advocate General contended that the learned Arbitrator as well as learned District Judge fell into error in allowing Claim No.1 of the respondent/ claimant by awarding it a sum of Rs.13,71,829/- for price escalation. The respondent/claimant had claimed price escalation in respect of the work executed in view of Clause 10(CC) of the contract executed between the parties, whereas, the respondent had itself given a written undertaking that it would not claim ‘anything extra’ on account of work executed. The words ‘anything extra’ would include the price escalation claim. Therefore, the respondent/claimant was not entitled to price escalation in view of it having given an undertaking for not claiming ‘anything extra’.

Another point urged by the learned Deputy Advocate General is that the learned Arbitrator had no jurisdiction to determine respondent’s claim under Clause 10(CC) of the contract with respect to price escalation. This claim could not have been arbitrated. Learned Arbitrator had illegally assumed the jurisdiction to determine a non- arbitral claim.

3(ii). Learned Senior Counsel appearing for the respondent/claimant submitted that the learned Arbitrator has correctly interpreted the words ‘anything