TARAPORE & COMPANY versus COCHIN SHIPYARD LTD. COCHIN & ANR.

TARAPORE & COMPANY versus COCHIN SHIPYARD LTD. COCHIN & ANR.

Where parties specifically refer a question of law, including arbitrator’s jurisdiction, to arbitration, the arbitral decision is binding and not subject to being set aside on the mere ground that it is erroneous. The compensation claim for increased equipment costs was within the wide arbitration clause, as resolution required reference to the contract.

Parties
Appellant: Tarapore & Company; Respondent: Cochin Shipyard Ltd.
Jurisdiction
India
Judgment Date
06 March 1984
Procedural Posture
Civil Appeal / Supreme Court: Appeal by Special Leave Against Judgment of Kerala High Court
Outcome
Appeal allowed; High Court judgment set aside; Judgment and order of Subordinate Judge restored with costs throughout.
Legal Topics
Arbitration Clause Interpretation, Jurisdiction of Arbitrator, Award—error on Face of Award, Works Contract Compensation Claims, Reference of Law Questions to Arbitrator
Arbitration Construction Law Contract Law Arbitration Clause Interpretation Jurisdiction of Arbitrator Award—error on Face of Award Works Contract Compensation Claims Reference of Law Questions to Arbitrator

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Parties

Tarapore & Company

Appellant

Cochin Shipyard Ltd.

Respondent

Procedural Posture

Civil Appeal / Supreme Court: Appeal by Special Leave Against Judgment of Kerala High Court

Legal Issues

  1. 1 Whether a specific question of law referred to the arbitrator is binding, and the award immune from being set aside for error of law on the face of award
  2. 2 Whether the compensation claim for increased costs falls within the scope of the arbitration clause

Ratio Decidendi

Where parties specifically refer a question of law, including arbitrator’s jurisdiction, to arbitration, the arbitral decision is binding and not subject to being set aside on the mere ground that it is erroneous. The compensation claim for increased equipment costs was within the wide arbitration clause, as resolution required reference to the contract.

Court Disposition

Appeal allowed; High Court judgment set aside; Judgment and order of Subordinate Judge restored with costs throughout.

Orders

  • Judgment of Kerala High Court set aside
  • Judgment and order of Subordinate Judge, Ernakulam dated March 30, 1979 restored