Law:

Section:

Arbitration Act (X of 1940)--- ----Ss. 30 & 33---Arbitration---Award---Objections to award---Civil court---Powers of---Scope---Construction contract---Objection to the award of sole arbitrator was that amendments made in the contract did not contain an escalation clause---Parties to the contract had amended the contract so as to introduce a price adjustment formula in the contract to cater for the price hike---Company (contractor) moved the civil court to make the award rule of the court contending that the amendments were made with mutual consent and Interim Payment Certificates (I.P.C.) raised by the company were duly certified by the engineer for which partial payment was made to the company---Company further submitted that Dispute Review Expert (DRE) and sole arbitrator were justified because the purpose of introducing the price adjustment formula in the contract through amendments was to assist in mitigating the effects of the increase in the cost of the basic construction material that had occurred since the commencement of the project---Validity---Fact that parties had introduced price adjustment formula and partial payment was made to the company was not disputed but remaining amount of Interim payment certificates was withheld in view of meeting of Executive Board which decided that benefit of price adjustment was not effective retrospectively---Dispute Review Expert recommended the remaining payment declaring that Principal (authorities) could not thrust its Executive Board's decision on the company---Witnesses of Principal before sole arbitrator admitted that during the pendency of contract, substantial rise in cost of construction material was witnessed---Sole arbitrator was cognizant that the amendments were executed between the parties voluntarily---Sole arbitrator was of the view that authorities could not wriggle out of its obligations---Sole arbitrator took into consideration the fact that first amendment was stated to be retrospective, whereas other (second) amendment was in continuation of the first amendment, thus making both amendments to be an integral part of the contract from its very inception---Sole arbitrator did not find any…

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