ARABIAN JACKING ENTERPRISES FOR CONTRACTING & TRADING COMPANY Vs. MUNICIPAL CORPORATION OF GREATER BOMBAY, CONSTITUTED UNDER THE PROVISIONS OF MUMBAI MUNICIPAL CORPORATION ACT, 1888

JUDGEMENT

(1.) The challenge is to a judgment dtd. 31/3/2017 under Sec. 34 of the Arbitration & Conciliation Act, 1996 ("the Arbitration Act"). The Appeal is under Sec. 37 of the Arbitration Act. The judgment in question was a common judgment in two arbitration petitions under Sec. 34. The Appeal is only in one of these. To explain: Arbitration Petition No. 162 of 2009 was filed by one Angerlehner Structural and Civil Engineering Company ("Angerlehner") against the MCGM. The second Arbitration Petition No. 925 of 2012 was by the Municipal Corporation of Greater Mumbai against the present Appellant, Arabian Jacking Enterprises for Contracting and Trading Company ("AJECT"). The contracts in both cases were different. The Awards in both cases were different. But both contracts had an identical price escalation clause and a formula for its application. On an identically worded price escalation clause in two separate contracts, two different three-member tribunals took diametrically opposite views.

(2.) Both petitions were heard together. The learned Single Judge dismissed the Angerlehner petition and allowed the MCGM petition against AJECT. The result was an acceptance of the Angerlehner Award and its interpretation of the price escalation clause with its formula, and a rejection of the AJECT Award, which took the opposite view.

(3.) In the AJECT case, the learned single Judge held that the AJECT Tribunal side-stepped the question of interpretation of the formula in the price escalation clause arbitration, abdicated its decision-making responsibility, did not consciously apply its mind and created an artificial barrier against its interpretive mandate. There was, thus, the learned single Judge held, a failure by the arbitrators to exercise their jurisdiction to interpret the terms of the contract.