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2015 (5) TMI 1194 - SC - Indian LawsArbitral Award - Sub-contract - privity of contract - HELD THAT:- While the Award in the SIPCOT arbitration is not immediately an appellate subject herein, yet it is still part of the record and therefore merits our consideration. Until an order to the contrary be adduced before this Court, this Award must be assumed to be standing and valid. Its validity and legitimacy in law, insofar as it has depended on the earlier Award qua the adjudication of claims, would only be justifiable by the validity of the earlier Award in the Respondent’s favour. The earlier Award must, therefore, be presupposed to be valid, when the validity of the later Award has not been disproved or rebutted - the Award in favour of the Appellant is positively valid, and its unsettlement an uninviting prospect. Law on subcontracts - Primary liability - employer liability - HELD THAT:- In the absence of covenant in the main contract to the contrary, the rules in relation to privity of contract will mean that the jural relationship between the employer and the main contractor on the one hand and between the sub-contractor and the main contractor on the other will be quite distinct and separate. No such clause to the contrary, existent in the main contract between Appellants and SIPCOT, has been highlighted before us by the Appellants, which would persuade us towards a deviation from the presumption of distinct and sole liability of the Appellant-Contractor as employer viz. a. viz. the Respondent-Sub Contractor. The Appellant exercised care to make this concession by conjoining therewith its demand for adjustment in the Second Arbitration. To that extent the concession could be called a conditional one. At the heart of the concession however, the admission itself, taken alone, was not conditional. The Appellant thereby admitted an unconditional contractual liability on its part to pay the Respondent’s contractual claim, albeit dressing the same in the shroud of conditionality, by the expedient of making the concession dependent upon a consequent favourable outcome in the Second Arbitration. We cannot subscribe to the argument on behalf of the Appellant that it was merely a Consultant and therefore could not be fastened with liability or was imperious to claims preferred by the Respondent for work contractually carried out, or, in respect of claims founded on the bedrock of quantum meruit. Appeal dismissed.
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