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2016 (2) TMI 1257

..... WE has also a power to decide if there was any delay attributable to the execution of the contract within the control of the Arbitrator, in which case, the amount claimed as increase in prices in materials would not be claimed. To the extent to which the redressal mechanism was also provided and the failure of the contractor to lead any evidence or make a statement that he had applied to CWE for such payment, the award by the Arbitrator was truly on a head of claim that must only be reckoned as 'improperly procured or otherwise invalid'. There is no error in the intervention made by the court in the light of the Supreme Court judgment in State of Rajasthan Versus Ferro Concrete Construction Pvt. Ltd. [2009 (4) TMI 997 - SUPREME COURT] where it qualified the award of interest at 18% by the arbitrator as constituting an error apparent on the face of the record. The court guided for future awards that reference to interest for pendente lite or future interest should always be 9% in light of the provisions of the Interest Act, 1978. The civil revision partially succeeds in restoring the award passed by the Arbitrator - the rejection of the claim to Clause No.2(L) by the two cou .....

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..... er Court Judgment:- 3. Raising the issue of whether Award dated 19.02.2001 was liable to be set aside, the court of first instance had held Award of claim No.2(K) relating to damages for alleged unlawful cancellation of the contract and claim No.2(L) relating to additional costs incurred for increase of prices of materials were not permissible and set aside. Claim No.2(M) was modified as under: Instead of ₹ 4,55,860/-, it was reduced to sum of ₹ 2,18,657.12 and accordingly, made rule of Court. All other claims were upheld. Both parties appealed against lower Court judgment. III. Lower Appellate Court:- 4. Dismissing the appeals, the Appellate Court reasoned that; i) In light of clause 70 of contract, Cause of action was taken to arise on 15.11.1983 when work was completed. ii) Entertainment of claim by the arbitrator on disputes which were not permissible under the conditions and adjudication amounted to exceeding jurisdiction and could be interfered while considering the question of making the award rule of the Court. iii) As regards unreasoned award, limited jurisdiction of the Court in this case permitted it to lift the veil and to see whether arbitrator acted agains .....

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..... his case, the arbitral award makes plain and simple references to amounts which are awarded for the claims under various heads. No reasons have been given. Both the court of first instance and the Appellate Court have concurrently held, by making reference to the provision of the Arbitration Act and the decisions thereunder that the agreement between parties required no reasons to be given. If no reasons were given by the Arbitrator to the claims under various heads, the examination by a court could be only to ensure that the Arbitrator has not misconducted himself or that the award had been improperly procured or otherwise invalid. Clause No.30 (b) referred to above is admittedly not applicable, for, there was no order by a court to supersede an arbitration. 7. So considered if claim No.2(K) is for damages on account of wrongful cancellation and the Arbitrator has actually admitted such a claim to ₹ 50,000/- as against the claim of ₹ 2,94,000/- made by the contractor, then it must be understood that the Arbitrator was holding a cancellation of contract to be wrong and he was scaling down the quantum by a calculation, which though not revealed was applied by the Arbitra .....

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..... s to decide about amount to be allowed to the contractor on account of increase in prices) held that since the contractor did not lead evidence to show that he applied to C.W.E. for such payment of difference due to increase in price, the arbitrator was not competent to pass the award, his jurisdiction being barred under condition 63 of the agreement. (ii) The Lower Appellate Court in upholding the trial court reasoning and rejecting the claim passed by the Arbitrator, relied upon certain requirements under condition 63 that the contractor was required to fulfill to seek the reimbursement, but did not. The Claim was therefore rejected as being not permissible under the terms and conditions of the contract. I have gone through Condition No.63. It sets out an elaborate process that requires the contractor to furnish the details of variation in prices and the CWE would take a decision whose decision shall be final and binding. The CWE has also a power to decide if there was any delay attributable to the execution of the contract within the control of the Arbitrator, in which case, the amount claimed as increase in prices in materials would not be claimed. To the extent to which the re .....

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