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2013 (4) TMI 475 - HC - Companies LawJurisdiction under Arbitration & Conciliation Act, 1996 t - Held that - It is settled law that the Award is not open to challenge on the ground that the Arbitral Tribunal has reached a wrong conclusion or that the interpretation given by the Arbitral Tribunal to the provisions of the contract is not correct. The Hon‟ble Supreme Court in the case of Steel Authority of India Ltd. Vs. Gupta Brother Steel Tubes Ltd., () has summarized the law on this point, in paragraph 26 of the said judgment - An error relatable to interpretation of the contract by an arbitrator is an error within his jurisdiction and such error is not amenable to correction by Courts as such error is not an error on the face of the award. There is no error in the interpretation of the contract clauses by the Arbitral Tribunal. However, even if it were to be assumed, without admitting, that the contention of the petitioner is correct even then this Court would not interfere with the arbitral award for the reason that it is settled law that an error relatable to interpretation of the contract by an arbitrator is an error within his jurisdiction - There is no merit in the petition filed by the petitioner under Section 34 of the Act - The objections are dismissed
Issues Involved:
1. Legality of the rescission of the contract. 2. Validity of the claims under Mark A and Mark B of Claim No.1. 3. Grounds for challenging the arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996. 4. Jurisdiction and scope of the court under Section 34 of the Act. Detailed Analysis: 1. Legality of the Rescission of the Contract: The petitioner entered into a contract with the respondent for specified repair and replacement works, which was terminated by the respondent on May 7, 2008. The Arbitrator concluded that the contract was not alive after May 7, 2008, and thus, its rescission was deemed uncontractual and illegal. 2. Validity of the Claims under Mark A and Mark B of Claim No.1: The petitioner raised claims for unpaid or short-paid work under Mark A and Mark B of Claim No.1. The Arbitrator examined the evidence and submissions for each item under these claims. - Mark A: - Agreement Item No.5 and No.7: The Arbitrator rejected these claims, noting that the petitioner executed work without following the Engineer-in-Charge's instructions and without proper documentation. - Agreement Item No.42: The Arbitrator found no conclusive evidence that the malba was disposed of as claimed by the petitioner and awarded nil amount. - Agreement Item No.43: The Arbitrator upheld the respondent's recovery of dismantled G.I. pipes, awarding nil amount to the petitioner. - Mark B: - Extra Item No.2/2: The Arbitrator agreed with the respondent's interpretation of CPWD specifications, awarding nil amount. - Extra Item No.4.2: The Arbitrator awarded Rs.19,113 to the petitioner for excavating holes. - Extra Item No.4.6: The Arbitrator determined a reasonable rate for the substituted item, awarding Rs.61,356. - Extra Item No.3.1: The Arbitrator rejected the claim due to non-compliance with contractual provisions. 3. Grounds for Challenging the Arbitral Award under Section 34 of the Act: The petitioner argued that the Arbitrator failed to provide reasons for his findings, acted beyond jurisdiction, and ignored substantive law provisions. However, the court found that the Arbitrator had meticulously considered the material and provided a well-reasoned award. The court emphasized that it cannot re-evaluate the Arbitrator's findings unless they fall under the specific grounds of Section 34. 4. Jurisdiction and Scope of the Court under Section 34 of the Act: The court reiterated that its jurisdiction under Section 34 is limited to the grounds specified in the section. It cannot re-assess or re-appreciate evidence or substitute its evaluation for that of the Arbitrator. The court cited precedents emphasizing the finality and sanctity of arbitral awards, stating that errors in contract interpretation by the Arbitrator are within his jurisdiction and not subject to correction by the court. Conclusion: The court dismissed the petitioner's objections, finding no merit in the grounds raised under Section 34 of the Act. The court upheld the arbitral award, emphasizing the limited scope of judicial interference in arbitral decisions. No costs were awarded.
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