IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE P.B.SURESH KUMAR &

THE HONOURABLE MRS. JUSTICE C.S. SUDHA MONDAY, THE 13TH DAY OF DECEMBER 2021 / 22ND AGRAHAYANA, 1943 ARB.A NO. 38 OF 2020 AGAINST THE ORDER DATED 30.11.2019 IN OP(ARB) 664/2012 OF ADDITIONAL DISTRICT COURT-V, EKM APPELLANT/RESPONDENT:

M/S.NAVAYUGA ENGINEERING COMPANY LTD REGISTERED OFFICE, 48-917, DWARAKA NAGAR, VISHAKHAPATTANAM 530-016, REPRESENTED BY ITS AUTHORISED SIGNATORY BY ADVS.SANTHOSH MATHEW SRI.ARUN THOMAS SRI.JENNIS STEPHEN SRI.VIJAY V. PAUL SMT.KARTHIKA MARIA SMT.VEENA RAVEENDRAN SRI.ANIL SEBASTIAN PULICKEL SMT.DIVYA SARA GEORGE SMT.JAISY ELZA JOE SHRI.ABI BENNY AREECKAL SMT.LEAH RACHEL NINAN SMT.SHARAN PREM RESPONDENT/PETITIONER:

UNION OF INDIA REPRESENTED BY THE CHIEF ENGINEER (NW), NAVAL BASE P.O.,KOCHI-682 004.

BY ADV SRI.K.SHRI HARI RAO, CGC THIS ARBITRATION APPEAL HAVING COME UP FOR ADMISSION ON

30.11.2021, THE COURT ON 13.12.2021 DELIVERED THE FOLLOWING:

“C.R.”

P.B.SURESH KUMAR & C.S.SUDHA, JJ.

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Arbitration Appeal No.38 of 2020 -----------------------------------------------

Dated this the 13th day of December, 2021 JUDGMENT C.S.Sudha, J.

The Hon’ble Supreme Court in Project Director, National Highways Authority of India v. M. Hakeem, (2021 SCC Online 473) held that Section 34 of the Arbitration and Conciliation Act, 1996 (the Act) does not contemplate modification of an award by a court in a proceeding under the said Section. Now the question is what constitutes modification of an award? If the Arbitrator has awarded separate amounts on various independent claims, would setting aside some of the claims, which are separable and independent of the remaining claims, constitute a modification of the award? This is one major issue apart from the justifiability of interference made by the court below and the arbitrability of certain disputes decided by the Arbitrator, that calls for an adjudication in this case.

2. First, a brief reference to the facts of the case-

The appellant and the respondent herein entered into a contract for the provision of Parade Ground, PT Complex, Athletic Track, Swimming Pool, Covered PT and Drill Shed etc. at Ezhimala. The work was completed on 31/10/2007. Disputes arose between the parties and hence the matter was referred for arbitration. Sri.N.D.Bhagatkar, Chief Engineer (QS&C), C/o. Commander Works Engineer, Pune was appointed as the sole Arbitrator. 31 claims were raised before the Arbitrator by the claimant for a total amount of Rs.16,04,07,582/- with interest. Claims 1 to 5, 7, 8, 10, 11, 14, 15,16 to 20, 27, 30 and 31 were allowed and the remaining claims were rejected. The Arbitrator by award dated 21.5.2012 granted an amount of Rs.3,93,24,065/- with interest at the rate of 9% per annum w.e.f. 13/09/2009 to the date of award to be paid within 90 days from the date of award, failing which interest was to be paid @ 11% from the date of award till payment. The claim of the respondent for Rs.11 lakhs (Rs.5 lakhs for cost of arbitration and Rs.8,38,032/- for repair of roof) was rejected by the Arbitrator.

3. The respondent/Union of India (UoI) preferred O.P.

Arb. Appeal No.664/2012 before the District Court, Ernakulam challenging the award. The Court confirmed the award under claim no.2, 3,10,11,14,15,20 and 27 and set aside the award under claim no.1,4,5,7,8,16, and 19. The award under claim no.31 was modified. The award of Rs.3,93,24,065/- was thus reduced to Rs.22,36,380/- plus cost of Rs.28,402/-. Aggrieved, the appellant/claimant is before us.

4. Heard Sri. Anil Sebastian Pulickel, the learned counsel for the appellant and Sri.K.Shri Hari Rao, the learned Central Government Counsel for the respondent.

5. According to the learned counsel for the appellant, the court below went wrong in partly setting aside the award, which in effect, is a modification of the award. This is not permissible under Section 34 of the Act. It was pointed out that in a pr