VISHWANATH SOOD versus UNION OF INDIA & ANR.

VISHWANATH SOOD versus UNION OF INDIA & ANR.

Disputes regarding compensation for delay as stipulated under Clause 2, to be determined by the Superintending Engineer, are excluded from reference to arbitration under Clause 25. The arbitrator cannot award compensation under Clause 2 and the compensation determined is not open to challenge before arbitration.

Parties
Appellant: Vishwanath Sood; Respondents: Union of India and State of Himachal Pradesh
Jurisdiction
India
Judgment Date
24 January 1989
Procedural Posture
Civil Appeal / Supreme Court Decision on Appeal
Outcome
Appeal allowed
Legal Topics
Arbitrability of Penalty Clauses, Compensation for Delay, Jurisdiction of Arbitrator
Arbitration Contracts Arbitrability of Penalty Clauses Compensation for Delay Jurisdiction of Arbitrator

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Parties

Vishwanath Sood

Appellant

Union of India and State of Himachal Pradesh

Respondents

Procedural Posture

Civil Appeal / Supreme Court Decision on Appeal

Legal Issues

  1. 1 Whether compensation for delay under Clause 2 of contract can be questioned before an arbitrator under Clause 25.
  2. 2 Whether Clause 2 compensation is excluded from arbitration by the wording of the contract.
  3. 3 Whether the arbitrator exceeded jurisdiction in awarding compensation to the Government.

Ratio Decidendi

Disputes regarding compensation for delay as stipulated under Clause 2, to be determined by the Superintending Engineer, are excluded from reference to arbitration under Clause 25. The arbitrator cannot award compensation under Clause 2 and the compensation determined is not open to challenge before arbitration.

Court Disposition

Appeal allowed

Orders

  • The amount of compensation of Rs.20,000 awarded by the arbitrator in favour of the Government is deleted from the award.
  • The amount of interest payable to the contractor, if any, will be worked out on the basis of the award as modified.