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Issues Involved:
1. Jurisdiction of the Arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996. 2. Legality of the damages awarded by the Arbitrator. 3. Appropriateness of the interest awarded. 4. Arbitrability of the disputes. Detailed Analysis: 1. Jurisdiction of the Arbitrator: The appellant contended that Clause 29 of the agreement was not an arbitration clause, thereby questioning the jurisdiction of the Arbitrator appointed by the Court. The respondent argued that this contention was not raised before the Arbitrator or the lower court, and thus, could not be raised for the first time in this appeal. The Court emphasized the importance of Section 16 of the Arbitration and Conciliation Act, 1996, which empowers the Arbitral Tribunal to rule on its own jurisdiction. The Court noted that objections to the jurisdiction must be raised at the earliest stage, ideally before the submission of the statement of defense. The appellant's failure to raise this issue earlier indicated acquiescence to the Arbitrator's jurisdiction. The Court also highlighted that the appellant had waived its right to object to the Arbitrator's jurisdiction by participating in the proceedings without objection, as per Section 4 of the Act. The Court concluded that interpreting Clause 29 of the agreement to determine its nature as an arbitration clause was not within its purview at this stage. The Court referenced several Supreme Court judgments to support its stance that it could not undertake the interpretation of contractual clauses in an appeal. Consequently, the Court dismissed the appellant's jurisdictional challenge. 2. Legality of the Damages Awarded: The appellant argued that the Arbitrator acted illegally by awarding Rs. 2,85,000 towards overhead charges and another Rs. 2,85,000 towards loss of profits, contrary to Clause 15(a) of the agreement, which barred such claims. The respondent countered that this issue was not specifically raised before the lower court. The Court examined Clause 15(a) of the agreement, which precluded claims for profits or advantages not derived due to incomplete work. The Court found that the appellant's argument was not explicitly presented before the lower court, making it inappropriate to raise it for the first time on appeal. Moreover, the Arbitrator's award was based on established legal precedents, including judgments from the Supreme Court and the High Court, which justified the awarded amounts. The Court affirmed that the Arbitrator's decision to award overhead charges and loss of profits was legal and supported by evidence, thus rejecting the appellant's contention. 3. Appropriateness of the Interest Awarded: The appellant contended that the interest awarded by the Arbitrator was excessive and not justified by the terms of the agreement. However, the Court noted that this issue was not specifically addressed in the appeal, nor was it raised before the lower court. The Court reiterated that issues not raised at the appropriate stages of the arbitration or lower court proceedings could not be introduced for the first time on appeal. The Court found no basis to question the interest awarded by the Arbitrator, as it was consistent with the terms of the agreement and the legal principles governing such awards. 4. Arbitrability of the Disputes: The appellant argued that the disputes were not arbitrable under the terms of the agreement. The Court, however, found that this issue was not substantively argued before the Arbitrator or the lower court. The Court emphasized the principle of "Kompetenz-Kompetenz," which allows the Arbitral Tribunal to rule on its own jurisdiction, including the arbitrability of the disputes. The appellant's failure to raise this issue at the appropriate stages precluded it from being considered on appeal. Conclusion: The Court dismissed the appeal, affirming the Arbitrator's award and the lower court's judgment. The appellant's challenges regarding the Arbitrator's jurisdiction, the legality of the damages awarded, the appropriateness of the interest, and the arbitrability of the disputes were all rejected. The Court emphasized the importance of raising such issues at the earliest stages of the arbitration process to ensure efficient dispute resolution. The appellant was also ordered to pay costs, with the Advocate's fee fixed at Rs. 1000.
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