Arbitrator’s Views With Another Must Not Be Substituted By Courts By Reappreciating Evidence: Orissa HC
The Orissa High Court said that when reappreciation of evidence is not permissible under the Arbitration and Conciliation Act, 1996 (A&C Act), the views of the Arbitrator with another must not be substituted by courts.
The Court said thus in an appeal under Section 37 of A&C Act preferred against the judgment of the District Judge by which it set aside the award of the Arbitrator.
A Single Bench of Justice D. Dash remarked, “The learned Arbitrator, as it appears, from the award has gone for detail examination of available evidence in the backdrop of the rival statement and their evaluation. A careful reading being given to the discussion of evidence made by the learned Arbitrator on the heads of the claim, this Court is not at all in a position to say that the same does not stand on the base of evidence. The basis on which those have been rendered by the learned Arbitrator cannot be said to be wholly erroneous. Therefore, when reappreciation of evidence is not permissible, at this stage so as to substitute another view with that of the view of the learned Arbitrator, the views taken by the learned Arbitrator as afore-stated have to be said to be possible views on the factual settings.”
Additional Standing Counsel S.N. Das appeared for the appellants while Advocate Pratik Parija appeared for the respondent.
Brief Facts -
The respondent/claimant, a Superclass Contractor was awarded to execute the work of construction of Jambhira Earth Dam Reach-IV(B) under Subarnarekha Irrigation Project (SIP), Odisha. It entered into an agreement with the appellant at a contract price of Rs. 2,50,68,948/-. The contract contained execution of 11 items of work as per the schedule of quantity given in the agreement. When the work was in progress, the Chief Engineer influenced upon all the Contractors including the respondent to complete the work by end of March 1997 although the stipulated date of completion was November 28, 1997. Accordingly, the respondent completed all the items of work including the extra ones by March end.
However, the final bill was not settled and the respondent was paid only part of his dues for the work executed in respect of 11 items. The appellant countered the claim of the respondent and the respondent having not received his dues, filed an application under Section 11 of A&C Act before the High Court. The High Court appointed the Sole Arbitrator who passed the award on different heads of claim. Being aggrieved by the award, the appellant filed an application under Section 34 of A&C Act but the same was rejected by the District Judge. Hence, the appellant approached the High Court.
The High Court in view of the facts and circumstances of the case observed, “The Respondent-Claimant having claimed payment for extra work @ Rs.79/- per CUM, the learned Arbitrator having found that the Project Level Committee (PLV) having recommended as per the rate in the Booklet that has to be accepted. Accordingly, the entitlements of the Respondent-Claimant has been decided. Similarly, the claim of the score of price escalation (price adjustment), the learned Arbitrator has taken note of the revised calculation given by the Appellant. Then taking rival stand as to the extra items of work into account has ascertained the entitlement on that account.”
The Court noted that the Arbitrator made detailed discussion of the obtained materials from every angle and decided the entitlement of the respondent under the issues and answered the issues framed touching upon each head of the claim.
“The learned Arbitrator, having decided the issues as aforesaid has very rightly denied the claim of the Respondent-Claimant as to the compensation for the man and machinery remaining idle from 05.02.1996 till 15.03.1996 for the local resistance as that has not been duly substantiated with reference to evidence as acceptable”, it said.
The Court added that the contentions raised from the side of the appellant that the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission of the arbitration and that the composition of Arbitral Tribunal was not in accordance with the Agreement of the parties, are no more entertainable.
“Now coming to the rate of interest as has been awarded by the learned Arbitrator, i.e., 18% per annum; the same appears to be without any reason and in the facts and circumstances as disproportionate which thus is pegged at 9% per annum being reasonable”, it concluded.
Accordingly, the High Court disposed of the appeal and modified the rate of interest on the awarded amount.
Cause Title- Principal Secretary to the Govt. of Odisha & Others v. M/s. Jagannath Choudhury
