COCHIN SHIPYARD LTD. Vs. SRINIVASA RAO

JUDGEMENT

(1.) The judgment of the Court was delivered by Viswantha Iyer, J.- This appeal is filed by the Cochin Shipyard Ltd., against the judgment in O.P. 81 of 1977 filed by them to set aside an award passed by a sole Arbitrator first respondent in the dispute that arose between them and their contractor, the second respondent. The appellant entered into two contracts with the second respondent one for the construction of the Building Dock, Assembly Shop Foundation and Quay No. 3 and the other for the construction of the Repair Dock and Quay Nos. 1 and 2. The claim raised by the second respondent, which became the subject matter of the arbitration proceedings, was that they should be reimbursed the extra cost of the imported pile driving equipment and also the cost of the foreign know how for the operation of the said equipments. According to the appellant company this claim has no legal foundation on the terms of the contract and therefore they are not liable. They also denied that this is a matter covered by the arbitration clause of the agreement entered into between them and the second respondent.

(2.) The nature of the dispute between them can be understood only in the background of Clause.16, 26 and 40 of the Contract (Marked Ext. C1 before the Arbitrator) and the Works Order Clause.2 and 31 (Exts. C2 or C4).

(3.) The dispute remained unsolved for an year and then the respondent Company wrote a letter to the Cochin Shipyard on 1st March 1976 (marked Ext. C68 before the Arbitrator) which reads as follows: -