1990 (1) TMI 326 - SC - Indian Laws

Summary

Issues:
1. Validity of a non-speaking award by an arbitrator
2. Jurisdiction of the arbitrator in awarding damages for escalation of costs and expenses

Analysis:

Issue 1: Validity of a non-speaking award by an arbitrator
The case involved a dispute between a contractor and the Government of Andhra Pradesh regarding various claims made by the contractor under an agreement. The arbitrator issued a non-speaking award in favor of the contractor, awarding a consolidated amount of &8377; 19.39 lakhs. The contractor sought to enforce the award, but the petitioner challenged it, arguing that a non-speaking award is invalid. The High Court dismissed the appeal, stating that a non-speaking award cannot be set aside. The Supreme Court held that the validity of a non-speaking award had been settled in previous cases and was no longer a sustainable contention. The Court emphasized that in matters of challenging an award, one must differentiate between errors on the face of the record and the arbitrator exceeding jurisdiction. In this case, as the award did not exceed the arbitrator's jurisdiction, the challenge based on it being a non-speaking award was dismissed.

Issue 2: Jurisdiction of the arbitrator in awarding damages for escalation of costs and expenses
The petitioner argued that the arbitrator exceeded jurisdiction by awarding damages based on escalation of costs and prices, which were not within the parties' agreement. However, the Supreme Court analyzed the award and found that the arbitrator had considered the claim of escalation but did not expressly award any amount for it. The Court clarified that unless an item or amount awarded by the arbitrator was beyond their jurisdiction, it cannot be considered an error on the face of the record. The Court stated that the arbitrator's consideration of the claim did not automatically make the award invalid. As the arbitrator did not explicitly award any amount for escalation, the Court held that there was no error apparent on the face of the record. Therefore, the contention that the arbitrator exceeded jurisdiction in awarding damages for escalation was dismissed.

In conclusion, the Supreme Court upheld the non-speaking award and rejected the challenges raised by the petitioner regarding its validity and the jurisdiction of the arbitrator in awarding damages for escalation of costs and expenses. The special leave petition was dismissed, and the petitioners were allowed to withdraw the awarded sum without the need for security.