1992 (8) TMI 290 - SC - Indian Laws

Summary

Issues Involved:
1. Validity of the award on Item No. 2 (Dewatering of piers).
2. Validity of the award on Item No. 5 (Refund of Toll Tax).
3. Power of the arbitrators to award future interest (Item No. 8).

Summary:

Issue 1: Validity of the award on Item No. 2 (Dewatering of piers)
The arbitrators had accepted the contractor's claim in full for dewatering of piers by more than one pump. The High Court set aside the award on this issue, citing a violation of an express clause of the contract which stipulated specific conditions for dewatering. The Supreme Court found that the High Court erred in setting aside the award, emphasizing that the award was a non-speaking one and contained no reasoning that could be declared faulty. The Court reiterated that the scope of judicial review of non-speaking awards is extremely limited and that the arbitrators' interpretation of the contract, whether right or wrong, is binding unless it is explicitly erroneous on the face of the award.

Issue 2: Validity of the award on Item No. 5 (Refund of Toll Tax)
The High Court set aside the award on the refund of toll tax, citing violations of Clause 1.28 and Condition 32 of the contract, which excluded certain taxes from the tender amount. The Supreme Court held that the High Court had overstepped its jurisdiction by interpreting the contract terms and substituting its evaluation for that of the arbitrators. The Court emphasized that even if the arbitrators' interpretation was erroneous, it was within their jurisdiction to interpret the contract, and the award could not be interfered with unless the interpretation was explicitly erroneous on the face of the award.

Issue 3: Power of the arbitrators to award future interest (Item No. 8)
The High Court set aside the grant of future interest, holding that only the Court had the power to award future interest. The Supreme Court disagreed, referencing recent decisions, including Secretary, Irrigation Department of Orissa v. G.C. Roy, which clarified that arbitrators are competent to award interest for the period from the date of the award to the date of decree or realization. The Court found that the award on Item No. 8 should have been upheld.

Conclusion:
The Supreme Court allowed the appeals, set aside the orders of the learned Single Judge and Division Bench of the High Court, and directed the passing of a decree in terms of the award. No order was made regarding costs.