KERALA STATE ELECTRICITY BOARD Vs. WEBUILD PRIVATE LTD

JUDGEMENT

(1.) THE appellant in a petition to set aside an arbitration award, is the appellant. THE appellant is hereinafter referred to as KSEB. THE respondent herein, who is hereinafter referred to as the claimant, entered into a contract with KSEB in respect of the work of "widening and improving the jeep read from Idukki to Neriamangalam-Balance works-Between chainage 14600 and 29450 M-Neriamangalam Road end Hydro Electric Project. " certain disputes arose between the KSEB and the claimant in respect of the execution of this contract. THEse disputes were referred to the arbitration of two joint arbitrators. THEy appointed an Umpire. THE Arbitrators passed their award on 8-8-1975, Although that award was made a rule of court by the Sub court, Trivandrum, it was set aside by the judgment of this Court in M. F. A. 118 of 1977. This Court remitted the dispute to the Arbitrators for passing a fresh award as directed therein. Since the Arbitrators could not agree, the disputes were referred to the Umpire. THE Umpire passed the award dated 19-7-1980 awarding a sum of Rs. 4,38,047/. When this award was filed in Court the KSEB challenged the award on various grounds. THE lower court overruled those objections and passed a decree in terms of the award. This appeal is filed by the KSEB against the order and decree of the court below.

(2.) THE main contention on behalf of the KSEB is that the umpire travelled beyond his jurisdiction and the award is contrary to the directions of this Court in M. F. A. No. 118 of 1977. Learned counsel for the claimant submitted that the direction in the remand order will bind only the arbitrators and when the proceedings are referred to the Umpire, the entire case is at large and therefore the Umpire can decide the disputes without reference to the remand order of this Court. We do not think that the contention of the claimant can be accepted. Under S. 16 of the Arbitration Act, the court is empowered to remit the award to the arbitrator, upon such terms as it thinks fit if the award had left undetermined any of the matters referred to arbitration or where it determines any matter not referred to arbitration or where the award is so indefinite as to be incapable of execution, or where an objection to the legality of the award is apparent upon the face of it. Sub-s. (3) of S. 16 of the Arbitration Act provides that an award remitted under sub-s. (1) thereof shall become void on the failure of the arbitrator or Umpire to reconsider it and submit its decision within the time fixed. When an award is remitted for reconsideration, with specific directions on certain points, it is the duty of the arbitrator to hear such further evidence as the parties may wish to produce. However, the arbitrators will have to comply with all the directions of the remand order while passing the fresh award. If the court remits an award, but the arbitrators fail to reconsider it, the award becomes void under S. 6 (3) see Armada Prasad v. Jogesh Chandra (A. T. R. 1964 Calcutta 497 ). So much so, subsequent to an order of remand the power of the arbitrator is circumscribed by any limitation or direction in the remand order see atchavva v. Venkata (A. T. R 1915 Madras 1223 (F. B) at page 1231), Premchand hira v. Bai Galal (A. I. R. 1927 Bombay 594, at page 599), Nainsingh v. Koonwarjee (A. I. R. 1970 S. C. 997) and Achuthan Nair v. Raman (1979 K. L. T. 119 ). See also the following passage in Russell on Arbitration, 20th Edn. , page 456. "powers and duties of arbitrator when award remitted when an award is remitted to the arbitrator, all bis original powers, so far as they are not affected by the order remitting the award, or the provisions of the Arbitration Act, are, it would seem, revived. But his powers and duties cannot exceed those which are necessary to give effect to the order of (he court. "suppose an award good as to three points, and bad as to the fourth, and sent back as to that alone, as at present advised, I am of opinion that the arbitrator is functus officio as to the three and cannot alter bis judgment as to them And he has only power, it would seem to reconsider the matters referred to him in some way which does not amount to a redetermination of matters already decided by his award. THE arbitrator must carry put and abide by the order remitting the matters to him. " THErefore the powers and duties of the arbitrator subsequent to the award cannot exceed those which are necessary to give effect to the order of the court and the arbitrator must carry out and abide by the order remitting the matter to him. THE term 'umpire' has not been defined in the Arbitration Act. In Madanlal Gangaram v. Ramaji Bondarji (A. I. R. 1966 M. P. 177) the term'umpire' is held to mean a third person who is to decide a controversy or question submitted to arbitrators in case of their disagreement. An Umpire when called upon to act is generally invested with the same powers as the arbitrators and bound by the same rules and has to perform the same duties-see Wharton's Law Lexicon, 14th Edition, page 1021. It is an implied condition of arbitration agreements that if the arbitrators cannot agree, the Umpire shall forthwith enter on the reference in lieu of the arbitrators see Clause. 4 of the I Schedule to the Arbitration Act. THE words 'in lieu of the arbitrators' mean that the Umpire has to act instead of the arbitrators. THErefore the umpire will get only whatever power or authority the arbitrators had. It the jurisdiction of the arbitrators after remand is conferred and restricted by the remand order the Umpire will also get only the same power and not anything more than that. THErefore the contention on behalf of the claimant that the Umpire's powers are not restricted by the directions in the remand order cannot be accepted.