1989 (1) TMI 357 - SC - Indian Laws

Summary

Issues Involved:
The issues involved in this case include arbitration clause in the contract, appointment of arbitrator, jurisdiction of the arbitrator, award of escalation charges, and objections raised against the award.

Arbitration Clause in the Contract:
The contract had a clause (Clause 70) providing for settlement of disputes by arbitration. The appellant invoked this clause by addressing a letter to the Chief Engineer seeking arbitration if disputes were not settled to his satisfaction within a specified time frame.

Appointment of Arbitrator:
After various correspondences and legal proceedings, the Court appointed a former retired Judge as the Arbitrator to resolve the disputes between the parties. The Arbitrator examined documents, heard parties, inspected sites, and made an award based on the claims presented by both parties.

Jurisdiction of the Arbitrator:
The Arbitrator's award included various claims made by the appellant contractor and the respondent. The respondent objected to the award, particularly regarding the escalation charges granted by the Arbitrator, alleging that it was outside the scope of the contract and exceeded the Arbitrator's jurisdiction.

Award of Escalation Charges:
The Arbitrator awarded escalation charges to the appellant based on the delays in the completion of the contract and the increase in prices of materials and labor during the extended period. The respondent objected to this award, arguing that it was beyond the Arbitrator's authority.

Objections Raised Against the Award:
The objections raised by the respondent regarding the escalation charges were dismissed by the Court. It was held that the Arbitrator had jurisdiction to consider the delays in the contract, the increase in prices, and to award escalation charges as part of the contract. The Court upheld the award and directed the respondent to pay the arbitrator's remuneration and advocate's fees and costs.

This summary provides a detailed overview of the legal judgment, highlighting the key issues, the appointment of the Arbitrator, the jurisdiction of the Arbitrator, the award of escalation charges, and the objections raised against the award.