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Issues involved: Challenge to an arbitration award u/s 30 and 33 of the Arbitration Act, 1940.
Summary: The appellant (referred to as 'ONGC') entrusted a construction work to the respondent under a contract dated 11.10.1983 with arbitration clause. Disputes arose, and the arbitrator awarded amounts under various claims, totaling to &8377; 25,26,270/-. ONGC challenged the award under sections 30 and 33 of the Arbitration Act, 1940. The civil court dismissed the petition, and the High Court upheld it with a reduction in interest rate. ONGC appealed to the Supreme Court. The Supreme Court clarified that while reviewing an arbitration award, the court does not act as an appellate court and will not reappreciate the evidence. The court will only interfere if there is an error on the face of the award or misconduct by the arbitrator. The award in question dealt with various claims, with the main focus on claim No.(1) related to compensation for delay in completion due to fault on both sides. The arbitrator awarded compensation despite a contract clause barring claims for damages due to delays caused by ONGC. Citing precedents, the Court held that the arbitrator exceeded jurisdiction by ignoring the contract terms. The Court set aside the award of &8377; 9.5 lakhs under claim No.(1) and interest, while upholding the rest of the award. Therefore, the appeal was allowed in part, with the judgment of the High Court and civil court being partly set aside concerning the award under claim No.(1), while the rest of the award was upheld.
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