Sanjib Banerjee, J. - (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. The parties estimate that they have spent a tidy sum on either side on the conservative estimate of about Rs.5,000/- per side per sitting. In addition, the parties have shared the remuneration of Rs.9 lakh over a long period of almost 15 years. There must have been other expenses, particularly for the Kerala based contractor to attend arbitration in Calcutta and bring his witnesses. This is just to put in perspective the net amount that the contractor would have obtained upon being the more successful in the reference. The petitioner assails the award on the ground of non- application of mind and on error apparent on the face of the award in the arbitrator having apparently held that the arbitrator had no jurisdiction to entertain the claim on account of the interest bearing loans that were made the subject-matter of the petitioner's' suit; and, on the arbitrator failing to give credit to the petitioner of the sums admitted in the reference by the contractor to have been received from the employer. The petitioner says that the arbitrator derived authority to adjudicate upon the disputes pursuant to the order made on the petition under section 34 of the 1940 Act. The petitioner suggests that if the Court found that the claim in the suit was covered by the arbitration agreement and, thus, stayed the suit and directed a reference, it was not open to the arbitrator to revisit the matter or find that the interest bearing loans were not covered by the arbitration agreement. The petitioner refers to the statement of claim carried by the contractor to the reference. The employer points out that the quantum of LD 665,233 that figures in the principal relief in the statement of claim of the contractor has been arrived at on the basis of the sum of three heads of claim and the adjustment of the amount received from the petitioner. The petitioner to demonstrate that the award covered only the third head of claim and did not deal with the other two heads of claim (implying a rejection thereof) or the adjustment that had been given by the contractor on accounts of payments already received. It is urged that the award is fundamentally flawed both in its rejection of the major head of the petitioner's counter-claim and in the failure to perceive that there was an admission of the contractor having received LD 487,723.830 from the petitioner.
(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. The petitioner begins by referring to one of the paragraphs in the award after the contractor's claim had been considered and the petitioner's claim had been taken up. The relevant paragraph from the award reads as follows: "These submissions are not acceptable to me as no jurisdiction can be created by admission and/or consent of parties, particularly when it is patent to the Arbitral Tribunal that it has no jurisdiction to entertain claim not within the scope of the contract. Nor is the Arbitral Tribunal concerned with any loan taken by the respondent from the Slate Bank of India, London, nor concerned with the hardship faced by the respondent, if any, in not receiving any payment from its principal as alleged." ;