VINCO PRINTERS AND CO. Vs. COCHIN SHIPYARD LTD

JUDGEMENT

(1.) The respondent, namely the Cochin Shipyard Ltd., entered into a contract with the appellant on May 11, 1987 for painting, in the year 1987-88. Clause.23 of the General Conditions of the Contract provided that all disputes and differences arising between the parties cut of, or in relation to, the contract shall be referred to arbitration of an arbitrator to be appointed by the Chairman and Managing Director of the respondent. The respondent recovered an amount of Rs, 46,551-41 from the appellant on account of damages caused to their staging materials. On the appellant disputing the liability, the Chairman and Managing Director of the respondent appointed one Dr. C. P. Kuriakose as arbitrator under Clause.23 aforesaid to decide whether the recovery of Rs. 46,551-41 was sustainable in law. We shall extract the letter of reference Ext. C1 in entirety.

(2.) The appellant had some claim against the respondent under two other heads. Though the actual reference Ext. C1 related only to the legality or otherwise of the recovery of Rs. 46,561-41, the appellant contended before the arbitrator that the other points of difference between the parties should also be gone into by him. The respondent objected to the consideration of these claims on the ground that they were not the subject of reference to the arbitrator and he had therefore no jurisdiction to deal with them. The arbitrator heard the arguments of both sides on the preliminary Issue of jurisdiction but did not pass any order. On the other hand, he proceeded to pass an award on December 27, 1989 in which, apart from dealing with the dispute actually referred, he made award of certain amounts in favour of the appellant under two heads of claim set up by them. The award was filed in the Sub Court, Ernakulam under S.14 of the Arbitration Act, 1940 and the appellant filed O. P. No. 16 of 1990 to pass a decree in terms of the award, while the respondent filed O. P. No. 34 of 1990 to set aside the award on the ground of the Arbitrator's misconduct, under S.30 and 33 of the Act. The lower court held that the award, in so far as it related to disputes other than the claim for damages for the staging materials, was beyond the jurisdiction of the Arbitrator, and set it aside in so far as it related to them. A decree was passed only for the amount awarded in respect of the staging materials. The original petitions were disposed of accordingly. The appellant has filed these two appeals challenging the common order of the Sub Court.

(3.) The lower court held that the only point referred to the Arbitrator related to the recovery of Rs. 46,551.41 from the appellant for the damages caused to the staging materials of the respondent. Therefore, consideration of other disputes or differences between the parties was outside the scope of the reference and beyond the jurisdiction of the Arbitrator. Therefore, the award was void in law to that extent