UNION OF INDIA Vs. ARCTIC INDIA

JUDGEMENT

(1.) THE present petition is challenging an award dated 27-3-2004 under section 34 of Arbitration and Conciliation Act, 1996. Some of the few facts in the present case are as under :

(2.) A contract was executed by and between the Petitioner and Respondent in respect of the work of replacing of A. C. placed at INS Karanja. Under the terms of the contract stipulated date for commencement of the work was 30-7-1996 and stipulated date for completion was 20-1-1998. The work however was completed on 1-10-1999. In view of certain disputes and differences between the parties an arbitration Clause being Clause No. 17 of IAFW 2249 was invoked on 27-8-2002 by the respondent herein. On 28-8-2002 letter was addressed to the engineer-in-Chief for appointment of arbitrator by the Respondents enclosing therewith the claims which are required to be referred to an Arbitrator. On 21-11-2002 an application under section 11 for appointment of arbitrator was filed before this Court being Application No. 211 of 2002. On 31-1-2003 this Court directed the petitioner to appoint arbitrator in accordance with Clause 17 of the arbitration Clause within the period of six weeks therefrom. Accordingly on 27-3-2003 Shri T. K Saha CE was appointed as arbitrator to decide the dispute between the parties. On 16-4-2003 the arbitrator entered upon the reference. After various meetings and hearings the Arbitrator has published the award on 27-3-2004. On 23-4-2004 the learned Arbitrator amended the award by carrying out certain corrections therein. By the present petition, petitioners are challenging the award of the arbitrator dated 27-3-2004 as amended by further amending the award on 23-4-2004. The learned Counsel Mr. Sureshkumar appearing for the Petitioner has placed before me three contentions. Firstly he contended that the Arbitrator has wrongly granted the award of claim of escalation under Item No. 2. It is contended that claim for escalation made by the Respondent partially pertains to the period subsequent to the date of completion stipulated in the contract. According to him under Clause 1 l (c) of the General Terms and Conditions of the contract, the arbitrator is not entitled to grant such claim. The learned counsel appearing for the respondents has drawn my attention to the said Claim No. 2. It was an admitted position before the arbitrator and also before me that the petitioner Union has worked out the claim for escalation upto the date of contract to be Rs. 8,23,817. 56. Mr. Sureshkumar appearing for the Petitioners have accepted that the said figure of Rs. 8,23,817. 56 mentioned in the award as correct figure for the claim if escalation upto the date of contract and according to him there is no objection in the said amount being granted to the Respondent herein. However, he contends that the Arbitrator has granted claim of Rs. 8,76,795. 48 which includes the claim of escalation subsequent to the date of the completion of the contract. The learned counsel for the respondent has stated before me that he gives up the claim over and above the claim of Rs. 8,23,817. 56 and accepts the claim as worked out by the Petitioner. In view thereof, the award to that extent will be required to be modified.

(3.) IN view of the aforesaid position in Law, in my view the contention raised by the Petitioner that the current rate of interest being lower, the Arbitrator could not have granted the interest at the rate of 18% requires to be rejected.