1991 (7) TMI 369 - SC - Indian Laws

Summary

Issues Involved:
1. Jurisdiction of the arbitrator in awarding claims.
2. Validity of the High Court's interference with the arbitrator's award.
3. Specific claims under the contract and their adherence to contractual provisions.

Summary of Judgment:

Issue 1: Jurisdiction of the Arbitrator in Awarding Claims
The Supreme Court examined whether the arbitrator exceeded his jurisdiction by awarding claims not supported by the contract. The High Court had set aside Claim Nos. III, VI, and IX on the grounds that these claims were not supported by the agreement between the parties and that the arbitrator had traveled outside the contract. The Supreme Court upheld this view, stating that the arbitrator acted outside the contract in awarding these claims, thus exceeding his jurisdiction.

Issue 2: Validity of the High Court's Interference with the Arbitrator's Award
The Contractor argued that the High Court exceeded its jurisdiction by interfering with a non-speaking award. However, the Government contended that the award was a speaking one, with sufficient reasons provided by the arbitrator. The Supreme Court agreed with the Government, noting that the arbitrator's references to the contract and the reasons given for the awards made errors of law and fact apparent on the face of the award, justifying the High Court's interference.

Issue 3: Specific Claims Under the Contract
- Claim No. III (Escalation on Napa Slabs): The High Court set aside this claim, stating there was no provision in the contract for escalation of the cost or price of napa-slabs. The Supreme Court agreed, noting that the contract specifically prohibited price adjustment for napa-slabs.
- Claim No. VI (Payment of Extra Lead for Water): The High Court set aside this claim, noting that the contract did not provide for any payment for water lead. The Supreme Court upheld this view, emphasizing that the contract required the Contractor to make its own arrangements for water supply.
- Claim No. IX (Extra Expenditure Due to Flattening of Canal Slopes): The High Court set aside this claim, stating that the contract did not provide for any payment for the maintenance of canal slopes. The Supreme Court agreed, noting that the contract placed the responsibility for maintaining haul roads on the Contractor.

Claims Upheld by Both Courts:
- Claim No. II (Labour Escalation): The High Court upheld this claim, but the Supreme Court found that the arbitrator had used a formula different from the one prescribed in the contract, thus acting outside his jurisdiction. The Supreme Court reversed the High Court's decision on this claim.
- Claim No. IV (Refund of Excess Hire Charges of Machinery): The Supreme Court upheld this claim, agreeing with the High Court that the Government was bound to compensate the Contractor for excess hire charges due to poor performance of department machinery.
- Claim No. VII(4) (Sand Conveyance): The Supreme Court upheld this claim, agreeing with the High Court that the arbitrator was correct in his decision regarding the diesel oil requirement for sand conveyance.

Conclusion:
The Supreme Court affirmed the High Court's judgment except in respect of Claim No. II. The appeals of the Contractor were dismissed, and the appeals of the Government were allowed in respect of Claim No. II. No order as to costs was made.