HINDUSTAN STEEL WORKS CONSTRUCTION LTD Vs. P SETHIAN

JUDGEMENT

(1.) TO begin with, some hard facts relating to the proceedings need to be recorded without any comment for the moment. The disputes between the parties relate to the construction of certain buildings in Libya and the first letter of intent was issued sometime in March - April, 1980. By April, 1984 the construction was completed and the site handed over by the contractor. The final bill was raised on April 22, 1984. In or about June, 1986 the petitioner herein instituted a suit before this Court claiming a decree for Rs.1.76 crore on account of interest bearing loans that the petitioner, as employer, had provided to the contractor.

(2.) THE contractor applied for stay of the suit under section 34 of the Arbitration Act, 1940 and succeeded. THE order, thus, implied that the claim of the petitioner herein in the suit was covered by the arbitration agreement between the parties. A reference commenced before a departmental arbitrator and thereafter before another. By an order dated February 1,1993 the reference was directed to be presided over by the arbitrator whose award has been assailed in the present proceedings under sections 30 and 33 of the 1940 Act. THE pleadings reveal that it was the petitioner herein (the plaintiff in the suit) who had started off as the claimant in the reference and had filed a statement of claim seeking a total amount of Libyan Dinar 1,203.963.564. It is also evident that the contractor filed a counter-statement putting forth his claim and also dealing with the claim made by the petitioner herein. THE status of the parties was subsequently switched at the third meeting held before this arbitrator, as is recorded as paragraph 23 of the award; the original claimant became the respondent and the original respondent the claimant. THE pleadings were thereafter corrected by hand as copies thereof reveal. THE reference meandered through more than 356 sittings (the minutes of such sitting held on January 16, 2007 appear at pages 53-60 of the petition). Several more meetings must have been held before the award came to be made on December 31, 2007, nearly years and 360 sittings after the reference commenced before the arbitrator. THE claim of the contractor was in the sum of LD 665,232 equivalent to slightly over Rs.2.66 crore; the claim of the employer was LD 1,203.963.564. THE award now made finds the contractor to be entitled to a sum of about Rs.1.46 crore plus interest. THE award finds the employer entitled to a sum of about Rs. 30.39 lakh without any interest.

(3.) IN addition, the petitioner says that the award is contrary to the minutes of the 349th sitting in the reference. At the 349th sitting the arbitrator had noticed an argument made by the petitioner that the claims carried by the contractor were well in excess of what had originally been demanded in a letter of July 9, 1984. The petitioner says that in the arbitrator having observed at the 349th sitting that the excess claims could not have been made, the consideration of the additional and inflated claims in the award is per se invalid and would amount to legal misconduct.