1995 (9) TMI 394 - HC - Companies Law

Summary

Issues Involved:
1. Validity of the appointment of the arbitrator.
2. Validity of the references made to arbitration.
3. Allegations of misconduct and bias by the arbitrator.
4. Jurisdiction of the arbitrator.
5. Validity of the awards made by the arbitrator.
6. Merits of specific claims and counterclaims.

Detailed Analysis:

1. Validity of the Appointment of the Arbitrator:
The arbitrator was appointed by the Chief Engineer of the petitioners in charge of the work at the time of the disputes, as per Clause 25 of the contract. The court found that the appointment was in consonance with the arbitration agreement, valid, and legal. The petitioners' long participation in the arbitration proceedings indicated acceptance of the arbitrator's appointment, making their subsequent challenge to the appointment invalid.

2. Validity of the References Made to Arbitration:
The court held that the references to arbitration were properly, validly, and legally made. The petitioners' contention that the right to make further references was exhausted after the first reference was dismissed. The court noted that successive references of various disputes arising from time to time under the same contract could be made, and the disputes in the second and third references were validly referred to the arbitrator.

3. Allegations of Misconduct and Bias by the Arbitrator:
The court dismissed allegations of misconduct and bias. It referenced a previous judgment dismissing similar allegations and noted that the arbitrator's change of venue was for convenience and did not indicate bias. The court emphasized that the arbitrator's approach was fair and judicious, and the allegations against him were baseless.

4. Jurisdiction of the Arbitrator:
The court found that the arbitrator had the jurisdiction to decide preliminary objections, including those about his own jurisdiction. The arbitration agreement's wide terms allowed the arbitrator to determine his authority to proceed with the references.

5. Validity of the Awards Made by the Arbitrator:
The court held that each award contained reasons as required by the arbitration agreement. The findings and conclusions were neither contrary to the record nor internally inconsistent. No extraneous considerations influenced the arbitrator, and the awards were not perverse or bad in law. The court reiterated that it could not challenge the reasonableness of the arbitrator's reasons or re-examine the evidence.

6. Merits of Specific Claims and Counterclaims:
- First Reference: The arbitrator awarded Rs. 2,71,797.12 to the respondents for Claim No. 1 of Sub-head II up to the 34th R.A. Bill. The court upheld this award, noting that the petitioners had not finalized rates for quantities beyond the deviation limit.
- Second Reference: The arbitrator awarded Rs. 3,00,000 with interest, rejecting nine of the respondents' eleven claims. The court found this award was not ad hoc and was based on proper consideration of materials.
- Third Reference: The arbitrator awarded Rs. 20,11,984.74 for price variation and Rs. 54,76,302.34 for escalation in labor wages. The court upheld these awards, noting that the arbitrator correctly applied the contract's terms and conditions.

The court dismissed the petitioners' challenges to the awards, finding no error apparent on the face of the awards or misconduct by the arbitrator. The petitions were dismissed with costs.