Case Note & Summary
The dispute arose from a construction contract between the appellant and the respondent, where the appellant claimed that delays in supply of materials and provision of drawings by the respondent hindered the timely completion of work. An agreement was executed on 20/11/1986, stipulating completion within 12 months, but the work was not completed on time. The matter was referred to arbitration, resulting in an award on 16/03/1990, which included a claim for loss of profit. The respondent challenged the award in the Kerala High Court, which partially disallowed the claim for loss of profit, leading to the present appeal. The Supreme Court analyzed the arbitrator's reasoning and emphasized that courts should not interfere with an arbitrator's award unless the reasoning is fundamentally flawed. The Court found that the arbitrator had acted within jurisdiction and provided adequate reasoning for the award. Consequently, the Supreme Court set aside the High Court's judgment and upheld the arbitrator's award, allowing the appeal without costs.
Headnote
A) Arbitration - Judicial Review of Award - Scope of Court's Intervention - Arbitration and Conciliation Act, 1996, Section 34 - The court held that it should not substitute its own view for that of the arbitrator unless the reasons provided are unreasonable or shocking to the conscience. The arbitrator's findings on delay caused by the respondent were upheld, leading to the conclusion that the award should be maintained (Paras 6-7).
Issue of Consideration
Whether the High Court erred in disallowing part of the claims granted by the arbitrator.
Final Decision
The Supreme Court set aside the judgment of the High Court and upheld the award of the arbitrator, allowing the appeal without costs.
Law Points
- Arbitration
- Award Enforcement
- Judicial Review of Arbitrator's Decision
