Case Note & Summary
The dispute arose from a contract for construction work between the General Manager of Northern Railways and Sarvesh Chopra, where the respondent sought arbitration for several claims after disputes emerged. The contract, dated 27.4.1985, was governed by the General Conditions of the Contract and Special Conditions. The respondent initially had two claims referred to arbitration by a Single Judge of the Delhi High Court, but an intra-Court appeal allowed four claims to be referred. The appellants contested this, arguing that claims 3 to 6 were excepted matters under Clause 63 of the General Conditions, which excluded certain claims from arbitration. The Supreme Court examined the interpretation of Clause 63 and the nature of the claims. It concluded that claims which are explicitly excluded from arbitration due to being excepted matters cannot be referred to an arbitrator. The court emphasized that the presence of a departmental remedy is not a prerequisite for a claim to be considered an excepted matter. Ultimately, the Supreme Court restored the decision of the Single Judge, disallowing the referral of the claims to arbitration, and set aside the Division Bench's order. No costs were awarded.
Headnote
A) Arbitration Law - Excepted Matters - Definition and Scope - Arbitration Act, 1940, Section 20 - The court clarified that claims covered by specific clauses in the contract that exclude them from arbitration are considered 'excepted matters'. The court held that the absence of a departmental remedy does not negate the status of a claim as an excepted matter (Paras 7-8).
Issue of Consideration
Whether the claims made by the respondent fall within the category of 'excepted matters' and are thus not arbitrable.
Final Decision
The Supreme Court allowed the appeal, set aside the Division Bench's decision, and restored the Single Judge's ruling, concluding that the claims were excepted matters and not arbitrable.
Law Points
- Arbitration agreement
- excepted matters
- interpretation of contract
- Section 20 Arbitration Act
- 1940
- finality of decisions
