ALSTOM PROJECTS INDIA LIMITED Vs. GALAXY ENGINEERING CONTRACTORS

JUDGEMENT

(1.) The petitioner seeks to have the principal part of an award set aside on the ground that it is perverse and that the arbitrator has misconducted himself and the proceedings in awarding an amount despite recording that there was no evidence to substantiate the extent of loss suffered by the respondent. Under a purchase order of October 12, 1989 the respondent was required to take up the job of fabrication, erection and commissioning of two electrostatic precipitators for the Madhya Pradesh Electricity Board in Korba. It was the respondent-claimant's case before the arbitrator that despite such contractor having completed all work, the commissioning could not be done on account of default on the part of the petitioner herein. The claimant complained in its statement of claim that it had suffered loss and damage on account of such inordinate delay and sought an amount of Rs.51 lakh on the ground that the petitioner herein could not arrange for the commissioning to be completed despite the claimant being ready and willing to do the same by December, 1992. The contractor said that it had to wait till the middle of 1994 to complete the commissioning work and its men and material were uselessly detained at site when they could have been gainfully engaged elsewhere. The arbitrator considered such claim under issue no. 3. The arbitrator recorded the basis of the claim and concluded, on the basis of the material before him, that the head of claim was justified since the job that remained outstanding was negligible and was equivalent to five per cent of the work assigned to the contractor. The arbitrator found that by July, 1992 the contractor had indicated that it would finish the entirety of the work by December, 1992, but no effective steps were taken for shutting down the plant to enable the new precipitators to be commissioned. The award records that the contractor had to wait at the Korba site needlessly and that it was the petitioner herein who was responsible for the delay.

(2.) The arbitrator noticed the claim for the 17 months' delay made by the contractor at Rs.3 lakh per month and the petitioner's contention that the contractor was not entitled to such amount and the contractor should have taken appropriate steps for mitigation of damages. After nearly four pages of discussion on such aspect, the arbitrator held as follows:

(3.) The petitioner argues that the present challenge to such aspect of the award is not on the basis of any mistake of fact or reasonableness of the reason in support thereof or of inadequate evidence. The petitioner says that the assessment of the quantum of damages is based on no evidence at all and is, as such, perverse. The petitioner concedes that in a matter of such nature there is an element of guesswork or the application of a thumb rule, but once the arbitrator recorded that there was no certainty as to whether the contractor could have obtained alternative work of such value during the period, it was not open to the arbitrator to conjure up another figure without any material in support thereof.