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1986 Supreme(Del) 130

High Court Of Delhi
EM AND EM ASSOCIATES - Appellant
Versus
DELHI DEVELOPMENT AUTHORITY - Respondent
Suit 294A of 1984
Decided On : 03/11/1986

Advocates Appeared:
L.M.Sanghvi, M.L.Jain

An Award must contain intelligible and comprehensible reasons for the claims awarded. The Arbitrator is bound by the criteria provided for in the agreement between the parties for determining claims and cannot resort to any other criteria.

Headnote:

ARBITRATION - AWARD - REASONS - SUFFICIENCY - AWARD HELD TO BE NON-SPEAKING AND UNREASONED - AWARD REMITTED TO ARBITRATOR FOR GIVING REASONS.

Fact of the Case:

The claimant, M/s. EM and EM Associates, filed a claim against the respondent, Delhi Development Authority (DDA), for additional work carried out and other expenses incurred during the execution of a contract. The Arbitrator awarded the claimant certain amounts under various claims. The DDA filed objections to the Award, contending that it was bereft of reasons and liable to be set aside.

Finding of the Court:

The Court held that the Award was indeed bereft of reasons and was, therefore, non-speaking and unreasoned. The Court found that the Arbitrator had failed to provide intelligible and comprehensible reasons for the various claims awarded to the claimant. The Court also held that the Arbitrator had erred in resorting to criteria other than those provided for in the agreement between the parties for determining certain claims.

Issues: 1. Whether the Award is liable to be set aside on the objections filed by respondent-DDA? 2. Relief.

Ratio Decidendi: The Court held that an Award must contain intelligible and comprehensible reasons for the claims awarded. The reasons must provide a precise link between the question/problem and the conclusion reached in regard thereto. The Court also held that the Arbitrator is bound by the criteria provided for in the agreement between the parties for determining claims and cannot resort to any other criteria.

Final Decision: The Court remitted the Award to the Arbitrator for giving reasons within four months from the date of the judgment and submit the same to the Court by 20-8-1986.

JAGDISH CHANDRA

( 1 ) -AWARD was filed in this case and notice was given to both the parties regarding the Award having been filed in Court and they were called upon to file objections, if any, against the same. Respondent, Delhi Development Authority (in short the DDA) filed objections against the Award which were resisted by the claimant M[s. EM and EM Associates. From the pleadings of the parties the following issues were framed :-

1. Whether the Award is liable to be set aside on the objections filed by respondent-DDA ? 2. Relief.

( 2 ) THE controversy under this issue was ordered to be reaolved upon affidavits. One affidavit each was filed by way of evidence by both the parties.

( 3 ) CLAUSE (25) is the arbitration clause in the agreement between the partics and this clause provides that in all cases where the amount of the claim in dispute is Rs. 50,0001- and above, the Arbitrator will give reasons for the Award.

( 4 ) THE basic and the fundamental contention raised by Dr. L. M. Singhvi counsel for the respondent/objector-DDA is that even though the Award purports to be a reasoned one the same is bereft of reasons and consequently, the same is liable to be set aside on that ground alone. This contention is challenged by Mr. D. K. Sayal, counsel for the claimant who has contended that the reasons given by the Arbitrator in support of the Award need not be in the form of an elaborate judgment as is given by the Judges in the litigation pending in Courts, and further more that the reasons given by the Arbitrator cannot be assailed in Courts which deal with the objections. preferred against the Award as the Courts do not sit in appeat on the Awards.

( 5 ) IN thin case reasons were required of the Arbitrator in support of his Award and he has given reasons, but the only question calling for determination is whether the reasons given by him are in fact reasons and not only trappings of reasons. The reason, in order to be so, must necessarily he intelligible and comprehensible, even though not unnecessarily lengthy or elaborate. It has to provide a precise link between the question/ problem and the conclusion reached in regard thereto.

( 6 ) UNDER Claims Nos. 1, 2, 6, 7, 8, 10 and 11 the following uniform reasons was given in the Award by the Arbitrator :-

"from the discussions, it was revealed that the claimants communicated the rates for the additional work and in fact the additional work was carried out by the claimants and the same was duly accepted by the respondents. "on this reasoning, the various claims put-forth by the claimant were allowed. It would be seen that the awarding of the money claims of the plaintiff under these claims is necessarily dependent upon the rates for the additional work which was in fact carried out by the claimant. It was contended by Dr. Singhvi learn. ed counsel for the Objector-DDA that the due acceptance on the part of the respondent-DDA was only in respect of the factum of the carrying out of the additional work by the claimant and not in respect of the rates communicated by the claimant for the aforesaid additional work and consequently, the reason aforesaid given by the petitioner lacked the most important factor regarding the rates communicated, This contention of Dr. Singhvi has all force inasmuch as if the rates for additional work communicated by the claimant to the DDA had been accepted, the acceptance in respect thereof too ought to have been mentioned in the Award, and if the rates remained not objected to by the DDA during the carrying out of the additional work for a sufficiently long time, it could be said that the DDA had thereby impliedly consented to those rates, communiceted by the claimant. But this does not appear in the reason given by the Arbitrator in his Award under the aforesaid claims. It would be further noted that the phrase duly accepted by the respondents is preceded by the singular verb was and not the plural verb were . If this "acceptance" was to pertain t













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