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PETITIONER: SUDARSAN TRADING CO.

       Vs.

RESPONDENT: GOVT. OF KERALA & ANR.

DATE OF JUDGMENT14/02/1989

BENCH: MUKHARJI, SABYASACHI (J) BENCH: MUKHARJI, SABYASACHI (J) RANGNATHAN, S.

CITATION:  1989 AIR  890            1989 SCR  (1) 665  1989 SCC  (2)  38        JT 1989 (1)   339  1989 SCALE  (1)395  CITATOR INFO :  D          1989 SC1263  (8,10)  F          1990 SC 626  (5)  F          1990 SC1340  (8,9,11)  RF         1992 SC2192  (9,10)

ACT:     Arbitration    Act,    1940:    s.     30---Non-speaking award--Validity  of-Not  open to court to probe  the  mental process    of   the   arbitrator-Reasonableness    of    the reasons--Arbitrator  the sole judge of quality and  quantity of evidence-Interpretation of contract by  arbitrator--Court cannot   substitute  its  own  decision--Setting  aside   of award--Grounds for.

HEADNOTE:     The   appellant-contractor  undertook  construction   of certain timebound projects. The work, however, could not  be completed within the scheduled time due to various  reasons. The contract was consequently cancelled at appellant’s risk. The  disputes  arising therefrom between  the  parties  were referred  to the arbitrator named in the agreement. He  made three  awards  allowing claim Nos. 1(e), 2, 5,  7(a),  7(b), 7(c), 13, 14, and 15 preferred by the appellant  aggregating to Rs.31.15 lakhs under the several heads mentioned therein.     Upon  these awards, an application was made  before  the court for passing decrees in terms thereof. Objections  were also filed.     The trial court took the view that it could not  adjudi- cate  upon the justification for the conclusions arrived  at by  the  arbitrator unless such awards were  the  result  of corruption, fraud or there were errors apparent on the  face of  the award, that it was not necessary for the  arbitrator to  give reasons for his award, that there was no  jurisdic- tion  to  investigate  into the merits of the  case  and  to examine the documentary and oral evidence for the purpose of finding  out whether or not the arbitrator had committed  an error  of law or fact, that the arbitrator had not  incorpo- rated in the award any materials for his conclusion nor  did he  incorporate the terms of the contract between  the  par- ties.  Under such circumstances the award could not  be  set aside,  especially when there was no error apparent  on  the

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face of it and there was nothing to show that the arbitrator had misconducted the proceedings or that the award had  been improperly procured. In  appeal  before the High Court it was contended  for  the respon-  666 dents  that  there were errors apparent on the face  of  the award,  that  the arbitrator had  misconducted  himself  and travelled  beyond  the terms of the contract, and  that  the claims  allowed  were beyond and contrary to  the  agreement between  the  parties,  whereas for the  appellants  it  was contended  that  the  award was a  non-speaking  award  and, therefore,  it  was  not open to the court to  go  into  the correctness or reasonableness of the award.     The  High  Court  set out the claims,  noted  the  rival contentious  and  referred to the various  clauses  and  the conditions  of the contract, though the contract itself  was made  no  part of the award, and concluded that  there  were errors apparent on the face of the award that the arbitrator had misconducted himself and travelled beyond his power.     In  the appeals by special leave, it was contended  that the  High Court had exceeded its jurisdiction in  acting  in the manner it did on the aforesaid aspects. Allowing the appeals by special leave,     HELD: 1.1 The High Court fell into an error in  deciding the  question on interpretation of the contract. It  had  no jurisdiction  to examine the different items awarded  clause by  clause  by  the arbitrator and to hold  that  under  the contract  these were not sustainable in the facts  found  by the arbitrator. [688D,E]     1.2 Once there is no dispute as to the contract, what is the  interpretation  of that contract, is a matter  for  the arbitrator and on which the court cannot substitute its  own decision. So also, the court cannot substitute the  decision of  the  arbitrator, as to what was meant by  the  contract, once  a dispute under the contract is conceded to the  arbi- trator. [687B,D]     1.3  In  the  instant case the court  had  examined  the different  claims not to find out whether these claims  were within the disputes referable to the arbitrator, but to find out whether in arriving at the decision, the arbitrator  had acted correctly or incorrectly. This the court had no juris- diction to do, namely, substitution of its own evaluation of the conclusion of law or fact to come to the conclusion that the arbitrator had acted contrary to the bargain between the parties.  Whether a particular amount was liable to be  paid or damages liable to be sustained, was a decision within the competency of the arbitrator. By purporting to construe  the contract the court could not take upon itself  667 the burden of saying that this was contrary to the  contract and, as such, beyond jurisdiction. [686D-F]     1.4  Furthermore, if on a view taken of a contract,  the decision of the arbitrator on certain amounts awarded, is  a possible view though perhaps not the only correct view,  the award cannot be examined by the court in the manner done  by the High Court in the instant case. [688D]     F.R.  Absalom,  Ltd. v. Great  Western  (London)  Garden Village  Society,  Ltd.,  [1933] AC 592; Heyman  &  Anr.  v. Darwins, Ltd. [1942] AC 356 and Attorney General for Manito- ba v. Kelly & Ors., [1922] 1 AC 268 distinguished.     State  of Kerala v. Poulose, [1987] 1 KLT 781 and  State of Kerala v. Raveendranathan, [1987] 1 KLT 604 partly  over- ruled.     2.1  Where there are errors apparent on the face of  the

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award it can only be set aside if in the award there is  any proposition  of  law which is apparent on the  face  of  the award, namely, in the award itself or any document  incorpo- rated  in  the award. But where a specific question  is  re- ferred,  the  award  is not liable to be set  aside  on  the ground  of  an error on the face of the award  even  if  the answer  to the question involves an erroneous decision on  a point of law. [684D-E]     Champsey Bhara & Co. v. Jivraj Balloo Spinning & Weaving Co.  Ltd. (L 1922 1A 324; M/s Alopi Parshad & Sons, Ltd.  v. The Union of India,  [1951] S.C.R. 793; Jivarajbhai  Ujamshi Sheth & Ors. v. Chintamanrao Balaji & Ors., [1964] 5 SCR 480 and Upper Ganges Valley Electricity Supply Co. Ltd. v.  U.P. Electricity Board., [1973] 3 SCR 107 referred to.     2.2 An award can also be set aside if the arbitrator had misconducted himself or the proceedings. One of the  miscon- ducts  could be the decision by the arbitrator on  a  matter which is not included in the agreement or reference. But  in such a case one has to determine the distinction between  an error within the jurisdiction and an error in excess of  the jurisdiction. [686C]     Anisminic  Ltd.  v.  Foreign  Compensation   Commission, [1969] 2 AC 147; Regina v. Noseda, Field, Knight &  Fitzpat- rick,  [1958] 1 WLR 793 and Halsoury’s Laws of England,  4th Edn. Vol. para 622 referred tO.  668     2.3 An award may be remitted or set aside on the  ground that the arbitrator in making it had exceeded his  jurisdic- tion and evidence of matters not appearing on the face of it will be admitted in order to establish whether the jurisdic- tion had been exceeded or not, be because the nature of  the dispute is something which has to be determined outside  the award--whatever  might be said about it in the award  or  by the arbitrator. [685H; 686A-B]     Christopher  Brown Ltd. v.  Genossenschaft  Oesterreigh- ischer etc., [1954] 1 QB 8; Dalmia Dairy Industries Ltd.  v. National  Bank  of Pakistan, [1978] 2 Lloyd’s Rep,  223  and Russell  on The Law of Arbitration, 20th Edn.  427  referred to.     2.4 An arbitrator acting beyond his jurisdiction, howev- er,  is  a different ground from the error apparent  of  the face  of  the award. In the former case the court  can  look into  the arbitration agreement but in the latter it  cannot unless  the  agreement was incorporated or  recited  in  the award. In the instant case the contract in question was  not incorporated or referred to in the award. [686B-C]     2.5 However, there is a distinction between disputes  as to the jurisdiction of the arbitrator and the disputes as to in what way that jurisdiction should be exercised- There may be  a conflict as to the power of the arbitrator to grant  a particular  remedy.  The  nature of the dispute  has  to  be determined. [686F-G]     Commercial Arbitration by Sir M.J. Mustill & Steward  G. Soyd page 84, referred to.      3.1 The court look into the reasoning only in a  speak- ing  award. It is not open to the court to probe the  mental process  of the arbitrator and speculate, where  no  reasons are  given by the arbitrator, as to what impelled the  arbi- trator to arrive at his conclusion. [683G-H]      3.2  Furthermore, in any event, reasonableness  of  the reasons  given  by  the arbitrator,  cannot  be  challenged. Appraisement of evidence by the arbitrator is never a matter which the court questions and considers. If the parties have selected their own forum, the deciding forum must be conced-

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ed the power of appraisement of the evidence. The arbitrator is the sole judge of the quality as well as the quantity  of evidence  and  it  will not be for the court  to  take  upon itself the task of being a judge on the evidence before  the arbitrator. [684B-C]  669     3.3  In the instant case, the award was not  a  speaking award.  The  arbitrator had merely set out  the  claims  and given  the  history of the claims and then  awarded  certain amount.  He  had not spoken his mind indicating why  he  had done  what he had done; he had narrated only how he came  to make the award. In the absence of any reasons for making the award,  it was not open to the court to interfere  with  the award. [684A-B]     Hindustan Steel Works .Construction Ltd. v. C.  Rajasek- har Rao, [1987] 4 SCC 93 and Municipal Corporation of  Delhi v.  M/s  Jagan  Nath Ashok Kumar & Anr., [1987]  4  SCC  497 referred to.

JUDGMENT:     CIVIL APPELLATE JURISDICTION: Civil Appeal No. 840842 of 1989.     From the Judgment and Order dated 5.5.1988 of the Kerala High Court in M.F.A. Nos. 72/83,346/83 and 380 of 1983.     K.K. Venugopal, Shiv Pujan Singh and Miss Niranjana  for the Appellant. G. Vishwanath Iyer and K.R. Nambiar for the Respondents. The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. Leave granted.     These  appeals arise from the judgment and order of  the High Court of Kerala, dated 5th May, 1988. The High Court by the  impugned judgment and order in M.F.A. Nos.  72,346  and 380 of 1983 allowed the appeals of the respondent--the Govt. of  Kerala, against the judgment and decree dated 25th  Sep- tember,  1982 passed by the principal Sub-Judge,  Trivandrum in S.P. (Arbitration) Cases Nos. 184, 185 and 186 of 1982 by which  the  learned Sub-Judge had upheld the awards  by  the arbitrator  on the ground that it was not open to the  court to sit in appeal over the decision of the arbitrator and the court  could not adjudicate upon the justification  for  the conclusions arrived at by the arbitrator unless such  awards were  the  result of corruption, fraud or  when  there  were errors  apparent on the face of the award. The learned  Sub- Judge  further held that there was no error apparent on  the face of the record and there was no allegation of corruption or fraud. The High Court reversed the said decision.  670     The questions-involved in these appeals are: how  should the  court  examine an award to find out whether  it  was  a speaking  award or not; and if it be a  non-speaking  award, how  and  to  what extent the court could  go  to  determine whether  there  was any error apparent on the  face  of  the award to be liable for interference by the court. The  other question that arises in this case is, to what extent can the court  examine the contract in question though not  incorpo- rated or referred to in the award.     It  may be noted that on 23rd December, 1976 the  agree- ment  No.  25/SESPC/1976-77  was entered  into  between  the appellant  and  the respondent herein  for  construction  of masonary  dam across Siruvani river. Certain disputes  arose between  the  appellant and the respondent.  These  disputes were referred to the arbitrator named in the agreement.  The arbitrator  passed  the  awards dated 12th,  16th  and  23rd

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April,  1982, which were filed before the Sub-Judge and  the appellant  prayed  for  passing of decree in  terms  of  the awards. The respondents filed petitions seeking to set aside the  awards.  The  learned Judge refused to  set  aside  the awards and passed decrees in terms of the awards. The  Trial Court held that there was no merit in the contention regard- ing limitation; and that the claims under the award were not barred  by  limitation. It was further held by  the  learned Trial Judge that the arbitrator had not incorporated in  the award any material for his conclusion nor had he incorporat- ed  the  terms of contract between the parties.  Under  such circumstances  the award could not be set aside,  especially when there was no error apparent on the face and that  there was  nothing to show that the arbitrator  had  mis-conducted the  proceedings or that the award had been improperly  pro- cured.  So  the objection to the passing of  the  award  was turned down.     Aggrieved  thereby, the respondent filed appeals  before the  High  Court. The High Court by  the  impugned  judgment dated  5.5. 1988 set aside the awards and the decree of  the Trial  Court  on the ground that there were  errors  of  law apparent on the face of the awards. It is contended that the High Court in the circumstances of this case and in view  of the settled principles of law, exceeded its jurisdiction  by acting  in the manner it purported to do. It is,  therefore, necessary  to  refer to the award to determine how  has  the arbitrator  proceeded and what actually the  arbitrator  has decided.  The arbitrator has noted in the first  award  that the dispute related to the work of ’Siruvani drinking  Water Supply  project--Construction of an Intak Tower  and  allied structures’; and observed that an estimate amounting to  Rs. 17.45 lakhs was sanctioned for the work and it was entrusted on contract to the   671 claimant--appellant  herein,  on tenders. The value  of  the work  arranged  on contract was Rs. 14.45 lakhs as  per  the departmental  estimate  which the  appellant  undertook,  as understood by the arbitrator, to carry out works at a  total amount of Rs. 19.15 lakhs as per their tender. The  contract was  embodied  in  agreement  No.  18/SC/SPS/1977-78   dated 17.3.78  between the claimants on the one side and  the  re- spondent  No.  2 on behalf of the State of Kerala  cited  as respondent  No.  1 on the other, in these  proceedings.  The work had been taken up as part of the scheme for  augmenting the drinking water supply to Coimbatore city from the  yield of the Siruvani river and due to acute scarcity of water  in the city, work was taken up on an urgent footing and it  was understood  by  both  the parties that time  was  of  utmost importance  in the execution of work. The site for the  work was handed over to the claimants on 17th December, 1977  and the  work had to be completed by 15.6.1978.  Accordingly  to the  arbitrator, however, it was clear that the  work  could not be completed within the stipulated period due to various reasons for which each party blamed the other. It was  noted in the award that according to the respondents, after carry- ing  out  the work to the tune of  Rs.3.46  lakhs  (approx.) against  the accepted probably estimate of contract  of  Rs. 19.15  lakhs,  the appellant refused to  proceed  with  the. balance work in spite of specific notices to them and so the respondents  were constrained to terminate the  contract  at the  risk  and cost of the appellant. Several  efforts  were made to re-arrange the balance works and finally as per  the situation obtaining then these works were to be expected  to be  completed  at an excess cost of Rs.0.97 lakhs  over  the amount that would have been payable to the appellant as  per

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the terms of the original contract. The arbitrator, thereaf- ter,  noted that the appellant had raised in respect of  the dispute  which  is the subject-matter in  the  first  award, specific claims for an amount of Rs. 5.97 lakhs in  addition to  release  of their retention sum of Rs.  32,139  and  the security deposit of Rs.38,400 payment of final bill for  the work  done including the above claims, interest  on  amounts awarded and cost of the arbitration proceedings.     It  seems  from  the award of the  arbitrator  that  the contention of the respondents had been that as per the terms of  the contract, they were entitled to realise  the  excess cost  on  re-arrangement of the balance works  estimated  at Rs.0.87  lakhs  from the claimant and so  they  proposed  to appropriate  the retention sum of Rs.32,139 lying  in  their hands, the Security Deposit of Rs.38,400 and the sums due to the claimant by way of final bill on other works as well. It was  noted by the arbitrator that there was a prayer by  the appellant  for inspection of the site and the same  was  in- spected on 9.12.80. It was contended on behalf  672 of  the claimant that the site of work was situated  on  the Western Ghats far away from human habitation in dense forest infected  with wild animals at an elevation of about  600  M and subject to heavy precipitation of upto 400 cms. annually and that access to the site was only from Coimbatore side in Tamil  Nadu. Several obstacles for access to the  site  were highlighted  before the arbitrator. Another important  point on  which considerable stress was laid was the  compensation for losses occasioned to them on account of the  unsatisfac- tory  law  and order situation coupled with  labour  unrest, stoppages  and  threats and even physical  violence  on  the agents of the appellant. It was further highlighted that the termination of the contract at their risk despite the  frus- tration and impossibility of performance was clearly illegal and  unjustified. In the premises compensation was  demanded for  loss of equipments. The arbitrator noted that the  main point of defence of the respondent was that the time for the completion  of the work forming part of the time-bound  pro- gramme  was  six months from the date of  handing  over  the site.  As the site was handed over on 16.12.77, the date  of completion  should have been 15.6.1978. Of the  difficulties arising out of the location of the site of the work, it  was emphasised by the respondent that the conditions under which the  contract had to be performed were within the  knowledge of the parties, and there could not be any ground for claim- ing any addition than those contemplated in the contract. It was  definitely further stated that the  additional  haulage was  due  to the alternate route via Thachampara  which  was opened  on  15.2.1977  and that any claim  on  this  account subsequent  to the above date was unjustified.  Furthermore, that  materials like sand, cement and steel were all  issued in time and there could hardly be any justification  regard- ing  delays  on these account.  Regarding  interruptions  in power  supply the respondents’ case was that such  interrup- tions were not unexpected at a site to which the power lines passed  through  virgin reserve area, and at  any  rate  the claimants  were not assured by the respondents  of  uninter- rupted  power  and there was hardly any items  of  machinery belonging to the appellant which had remained idle for  want of power.      It  was further stated that the various extra items  of works including the work on the quarries had been adequately paid  for  by them and no further payments were due  to  the appellant;  that there was no serious deterioration  of  the law and order situation; and that the losses were due to the

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conduct  of the claimant and the materials left over by  the claimant  at the end of the second working seasons that  had been  taken over by them, duly accounted for and the  credit thereof  given in the final bill. It was further  reiterated by the respondent that the work  673 was  not completed within the period agreed and,  therefore, the  respondent issued notice to resume the work and on  the failure  of the claimant to re-start the work, there was  no other  alternative except to terminate the contract  as  the work itself was part of a time-bound programme; and they had to  make  alternate arrangements and that  would  have  cost Rs.0.87 lakhs additionally which was sought to be  recovered from  the  appellant appropriating the retention  money  and security deposit. It was, therefore, claimed that the claims of the appellant should be rejected.     Considering all these contentions and noting the several respective claims, the arbitrator awarded as follows:               "Claims  Nos. (1), (2) (a & b) and  (3)  These               claims are declined.               Claim  No.  4 The Respondents  shall  pay  the               Claimants a sum of Rupees Ninety Six  Thousand               only (Rs.96,000) in satisfaction of this claim               including  the  various Sub Claims  under  the               same.               Claims  No. 5(a), (b) &  (c)--The  Respondents               shall pay an amount of Rs. five thousand  only               (Rs.5,000) to the Claimants in satisfaction of               this claim.               Claims Nos. (6), (7), (8) and (9)--These  four               Claims are declined.               Claim No. (10)--The retention moneys recovered               from  the  Claimants in regard  to  this  work               shall be refunded to them by the  Respondents.               Claim No. 11--The f.oo. for the work shall  be               paid  to Claimant for the sums  awarded  under               Claims  (4) and (5) Supra resulting in  a  net               payment  of Rupees one Lakh and  One  thousand               only (Rs. 1,01,000).               Claim No. 12--The Respondents shall refund the               security  deposit  held by the  Claimants  for               this  work subject to the rules regarding  tax               clearance.               Claim  No. 13--The Claim for interest  is  de-               clined.               Claim  No. 14--The parties shall suffer  their               respective costs in these proceedings."  674     Regarding the counter-claims it was held that the  order of the 2nd respondent terminating the contract in favour  of the  appellant was valid and as such, the  respondents  were free  to  arrange for the balance work in  the  manner  they thought fit. The counter claim for costs of the  respondents was  also  held  by the arbitrator to be  covered  by  other claims. The award was passed on 12th April, 1982.     There was another award dated 16th April, 1982 which was with  regard to the dispute that arose for  controlling  the work of "Siruvani Drinking Water Supply  Project--Construct- ing a Masonry dam across Siruvani River Block Nos. I, II and III from Ch. 13 to 60 up to level + 883.00 metres and  Block No.  III  from  ch. 60 to 82 upto level +  870  metres".  In respect  of the aforesaid, an estimate amounting to  Rs.71.5 lakhs had been sanctioned for the work and it was  entrusted on  contract to the appellant. It appears that the value  of the  work arranged on contract was Rs.67,72,760 as  per  de-

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partmental  estimate which the appellant undertook to  carry out  at a total amount of Rs.76,55,300 as per their  tender. The contract was embodied in the aforesaid agreement of 23rd December,  1976. The arbitrator recited the  original  claim and  noted that the work could not be completed  during  the scheduled time and the respective contentions of the parties were,  more  or  less, identical with the one  made  in  the previous case.     There  was inspection of documents and the parties  were heard  in person, it was noted. After noting the  respective contentions the arbitrator awarded as follows:               "Claim  No. (1)(A)--The Claim  for  additional               payment on account of aslar work is declined.               Claim  No. (1)(B)--The Respondents  shall  pay               the  Claimants an additional amount of  Rupees               One  Lakh only (Rs. 1,00,000) in  satisfaction               of  this claim over and above the amounts  al-               ready paid by them in the various part bills.               Claim No, (1)(c)--This claim for  compensation               on account of loss in hire charges and  short-               age of rubble is declined.               Claim  No.  2--The Respondents shall  pay  the               Claimants  a  sum of Rupees  three  lakhs  and               thirty  six  thousand  only  (Rs.3,36,000)  in               satisfaction of this claim.               Claim  Nos.  3 & 4--These two claims  are  de-               clined.                675               Claim  No.  5--The Respondents shall  pay  the               Claimants  an increase of forty (40) per  cent               in the agreed rates for agreed items and rates               derived from the agreement for the extra items               for all work paid for after CC2 and part, such               increase  being worked out on the cost of  the               work  excluding  the value  of  the  materials               supplied by the Respondents.               Claim No. 6--The Claimant shall be entitled to               a payment of Rupees twenty five thousand  only               (Rs.25,000) in satisfaction of this claim  and               the Respondent shall pay it accordingly.               Claim  No. 7(a)(b) & (c)--The Claimants  shall               be  entitled  to  a  consolidated  payment  of               Rupees  fifty thousand only  (Rs.50,000)  from               the  Respondents  in  satisfaction  of   these               claims and the same shall be paid  accordingly               in addition to the payments already made.  The               Claimants  on  receipt of such  payment  shall               have no lien whatsoever on the sheds, goods of               whatever  description and materials  lying  at               the  site  of the work and said to  belong  to               them.  Claims  8, 9, 10, 11 &  12--These  five               claims are declined.               Claim  No. 13--The retention amounts from  the               bills  of the Claimants lying in the hands  of               the Respondents shall be released to them.               Claim  No. 14--An amount of Rupees  two  lakhs               only (Rs.2,00,000 shall be paid to the  claim-               ants in settlement of the final claims on  the               work  in  addition to the specific  items  re-               ferred  to  in the other claims  as  per  this               award.               Claim  No.  15--The Security  offered  by  the               Claimants  for this work shall be released  to               them subject to the rules regarding tax clear-               ance.

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             Claim  No. 16--The claim for interest  is  de-               clined.               Claim  No. 17--The parties shall suffer  their               respective costs in these proceedings."     Regarding  the counter claims, it was reiterated by  the arbitrator that the respondents were entitled to arrange for the balance work in any manner they deemed fit on the termi- nation of the contract by  676 them.  But the appellant should not be responsible  for  any loss  that might be sustained for this  re-arrangement.  The counter  claim for costs of the respondents was  also  dealt with.     There  was  a third award dated 23.4.1982 which  was  in respect  of the sum due to Blocks Nos.7, 8 & 11. In  respect thereof an estimate of Rs.69.7 lakhs had been sanctioned for the work and it was entrusted to the appellant. The value of the work arranged on that contract was Rs.63.68 lakhs as per the  departmental estimate which the claimants undertook  to carry  but at a total amount of Rs.71.96 lakhs as per  their tender.  After reiterating that time was of the  essence  of the  contract, the difficulties that arose in  carrying  out the  contract  and the respective  contentions,  which  were identical  with those in respect of the first two  contracts were discussed. In respect of interruptions in power  supply the case of the respondent was that such interruptions  were not  unexpected  at  a site through which  the  power  lines passed through virgin reserve forest and that the  claimants had  not  been assured by the respondents  of  uninterrupted power and in any case there was hardly any item of machinery belonging to the claimant which could have remained idle for want  of power. In respect of the medical facilities it  was submitted by the respondents that according to the terms  of the  contract it was the primary, duty of the  appellant  to provide  for medical assistance to their work  force.  After setting out the rival contentions the arbitrator awarded  as follows:               "Claim  No. (1)(A)--The claim  for  additional               payment on account of aslar work is declined.               Claim  No. (1)(B): The respondents  shall  pay               the  claimants an additional amount of  rupees               seventy  five  thousand  only  (Rs.75,000)  in               satisfaction of this claim over and above  the               amounts  already paid by them in  the  various               part bills.               Claim  No. (1)(C): The claim for  compensation               on account of loss of hire charges and  short-               age of rubble is declined.               Claim  No.  2: The respondents shall  pay  the               claimants  a  sum of Rupees  three  lakhs  and               seventy  five thousand only  (Rs.3,75,000)  in               satisfaction of this claim.               Claim  Nos.  3 & 4: These two claims  are  de-               clined.               Claim  No.  5: The respondents shall  pay  the               claimants an                677               increase of Forty (40) per cent in the  agreed               rates  for agreed items and rate derived  from               the  agreement  for extra items for  all  work               paid  for after CC 2 and part,  such  increase               being  worked  out  on the cost  of  the  work               excluding  the value of materials supplied  by               the respondents.               Claim  No. 6: the claimants shall be  entitled

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             to  a payment of rupees twenty  five  thousand               only (Rs.25,000) in satisfaction of this claim               and the respondents shall pay it accordingly.               Claim  No. 7(a)(b) & (c): The claimants  shall               be  entitled  to  a  consolidated  payment  of               rupees  fifty thousand only  (Rs.50,000)  from               the  respondents  in  satisfaction  of   these               claims and the same shall be paid  accordingly               in addition to the payments already made.  The               claimants  on  receipt of such  payment  shall               have no lien whatsoever on the sheds, goods of               whatever  description and materials  lying  at               site of the work and said to belong to them.               Claims  Nos.  8, 9, 10, 11 &  12:  These  five               claims are declined.               Claim  No. 13: The retention amounts from  the               bills  of the claimant lying in the  hands  of               the respondents shall be released to them.               Claim No. 14: An amount of rupees fifty  thou-               sand  only  (Rs.50,000) shall be paid  to  the               claimants in settlement of the final claims on               the work in addition to the specified items as               per this award.               Claim  No.  15: The security  offered  by  the               claimants  for the work shall be  released  to               them subject to the rules regarding tax clear-               ance.               Claim  No. 16: The claim for interest  is  de-               clined.               Claim  No. 17: The parties shall suffer  their               respective costs in these proceedings."     About  the  counter claims it was also stated  that  the claimants would not be responsible to carry out the  balance work which the  678 respondents might arrange in any manner they thought fit  on termination  of  the contract, but it should not be  at  the risk of the claimants.     Upon  these awards, an application was made  before  the Court  of the Principle Sub-Judge, Trivandrum,  for  passing decrees’ in terms of the award. Objections were also  filed. The  learned  Judge  by his judgment and  order  dated  25th September,  1982 dealt with the objections. He rejected  the contention that the claims were barred. He further held that it was not necessary for the arbitrator to give reasons  for his  award;  and that there was no provision under  the  law which  required that the arbitrator should  furnish  reasons for the award. It was submitted before him that the arbitra- tor  ought  to have given separate findings for  the  issues under  claim No. 4 as the issues raised were entirely  inde- pendent of each other. It was submitted that under sub-claim (a) in claim No. 4 the appellant had claimed loss on account of  the  pressure tactics adopted by  the  labourers.  Under sub-claim (b) the appellant had claimed compensation for the extra  works done. In the statement of defence filed by  the respondents it was more or less conceded that the claim  for extra works would lie, and stated that the actuals should be accounted  and paid along with the final bill.  The  learned judge  noted that the arbitrator could only give a lump  sum award  with respect to various claims and that he  need  not quantify the sum awarded under each claim separately. It was contended  before the learned Sub-Judge that in  respect  of claim  No.  5, there was no evidence to support  the  claim. Under  that  claim the appellant had detailed the  value  of tools,  plants and materials etc. that were left by  him  at

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the  site.  In the defence statement itself  the  respondent admitted that some materials belonging to the appellant were taken  possession of by them and the value thereof would  be paid in the final bill. Therefore, according to the  learned judge, it was not correct to say that there was no  evidence at  all for allowing claim No. 5. Further,it was  held  that there was no jurisdiction to investigate into the merits  of the  case and to examine the documentary and  oral  evidence for the purpose of finding out whether or not the arbitrator had  committed  an error of law or fact. The  learned  judge reiterated  that the arbitrator had not incorporated in  the award  any materials for his conclusion nor did he  incorpo- rate  the terms of the contract between the  parties.  Under such  circumstances the award could not be set  aside  espe- cially  when there was no error apparent on the face of  it; and  there was nothing to show that the arbitrator had  mis- conducted the proceedings or that the award had been improp- erly  procured. So the objection was repelled. In the  prem- ises  the  judgment  in terms of the award  was  passed.  In respect of the three awards, three different judgments were  679 delivered incorporating more or less the same reasons.     Being aggrieved thereby the respondent preferred appeals before the High Court. The Division Bench of the High  Court by the judgment under appeal in F.M.A. Nos. 72, 346 and  380 of 1983 disposed of the appeals.     Being  aggrieved thereby, the appellant is  before  this Court.  In the judgment under appeal, the Division Bench  of the  High Court has set out the claims and noted  the  rival contentions  and  referred to the various  clauses  and  the conditions  of the contract, though the contract itself  was made  no part of the award. The Division Bench  referred  to the  decision of the learned Sub-Judge. Before the  Division Bench,  the main contention which succeeded was  that  there were errors apparent on the face of award, and further  that the arbitrator had misconducted himself and travelled beyond the  terms  of  the contract. On behalf  of  the  appellant, however,  it was contended that the award was a  nonspeaking award  and, hence, it was not open for the court to go  into the correctness of the reasons of the award. The High  Court referred  to the several decisions of this Court  and  other relevant  decisions  of  the Kerala High  Court.  In  order, however,  to appreciate the contentions, it is necessary  to refer in detail to the judgment under appeal. The High Court referred  to the various clauses of the contract which  were produced before the High Court. The submissions were made on behalf  of  the respondents .that the  claims  allowed  were beyond  and contrary to the agreement between  the  parties. The High Court noted that the arbitrator had allowed  claims Nos.  1(b),  2,  5, 7(a), 7(b), 7(c), 13, 14 2  15  and  had passed  an award for payment of an amount of Rs.31.15  lakhs to  the claimant towards his claim under the  several  heads mentioned therein. The High Court noted the judgment of  the learned Sub-Judge. It was held by the learned Sub-Judge that the  court  could set aside an award only when  it  was  the result of corruption, fraud or there were errors apparent on the  face of the award. According to the  learned  Sub-Judge there  was no error apparent on the face’ of the  award  and there was no allegation of fraud. Thereafter, the  different points  on which the learned Sub-Judge rested his  decision, were  noted by the High Court. It was contended  before  the High  Court  on behalf of the respondents  that  there  were errors  apparent  on  the face of the award,  and  that  the arbitrator had misconducted himself and travelled beyond the terms of the contract.

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   The first contention urged on behalf of the respondents, however,  was that the award was a non-speaking  award  and, there- 680 fore,  it was not open to the court to go into the  correct- ness  or  reasonableness of the award. The High  Court  held that when the arbitrator was constituted the sole and  final judge  of all questions both of law and of  facts,  normally his  decision should stand final and it was only when  there was  any  error  apparent on the face of  the  award  either because a question of law arose on the face of the award  or upon  some paper accompanying or forming part of the  award, it  could be interfered with. Thereafter, the High Court  in para 8 of its judgment observed that in the light of several decisions  it could say that there were any errors  apparent on  the face of the award, and that the arbitrator had  mis- conducted  himself and had travelled beyond his  power.  The High Court referred to the decision of the Division Bench of the Kerala High Court in State of Kerala v. Poulose,  [1987] 1 KLT 781. The High Court, thereafter, observed that it  was not  open  to the arbitrator or the umpire  to  arrogate  tO himself  jurisdiction and answer a question not referred  to him.  In  this connection, reference was made  by  the  High Court  to  several decisions, namely, Attorney  General  for Manitoba  v. Kelly and Ors., [1922] 1 AC 268;  Upper  Ganges Valley  Electricity  Supply  Co. Ltd.  v.  U.P.  Electricity Board,  [1973] 3 SCR 107; M/s Alopy Parshad & Sons, Ltd.  v. The Union of India, [1951] 2 SCR 793 and Jivarajbhai Ujamshi Sheth & Ors. v. Chintamanrao Balaji & Ors., [1964] 5 SCR480.     Regarding  claim No. 1(b) it was the contention  of  the respondent  that  the award was over and above  the  amounts already paid under various part bills. It was argued  before the High Court that the Department had measured and paid for all quantities of earth work and ruble work and the same had been  entered  in the measurement book and accepted  by  the contractor. Hence, the award of additional amount was unwar- ranted. It was also argued that as per clause 10 of Form No. 83 (Notice inviting tender) which formed part of the  agree- ment, every tenderer was expected to inspect the site of the proposed  work and quarries, and satisfy himself  about  the quality and availability of materials. It was also  notified in  the same clause that the Govt. would not, after  accept- ance of the contract rate, pay any extra charges for lead or any  other reason in case the contractor was found later  on to  have  mis-judged the materials available.  It  was  also notified  that  the Department would not be liable  for  any claim  raised later on the plea of non-access to  the  site. Ext.  R2 was a copy of extract of Clause 10 of Form No.  83. It  was argued that the award of Rs.75,000 under claim  1(b) was beyond the powers of the arbitrator. The High Court held that  the award on this aspect was beyond the provisions  of the  agreement, and therefore there were errors apparent  on the face of the award.  681     Similarly, in respect of the claim for Rs.3,75,000 under claim  No. 2, it was contended on behalf of the  respondents that  this was beyond the powers of the arbitrator  and,  as such,  there were errors apparent on the face of the  award. It was argued by him that clause No. 2 of the general speci- fication  and  special conditions of  the  contract  clearly notified  to the tenderers the site of the dam. It was  also contended by the Govt. Pleader that the period during  which the  contractor  had conveyed sand through  Madukkarai,  the claimant  had  been  actually  paid  additional   conveyance charges.  Hence, after construing clause 10 of Form No.  83,

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namely, notice inviting tender, the High Court held that  it was necessary for the contractor to have inspected the  site before  tender.  Therefore, in awarding, the amount  as  the arbitrator did on this head, there was error apparent on its face  and  such award was liable to be set aside.  The  High Court did so accordingly.     With  regard to claim No. 5, it was contended  that  the claim was beyond the powers of the arbitrator and  reference was made to clause 6(6)111 of the General Specification  and Special Conditions which stated that the Department was  not responsible for supply of uninterrupted electric supply,  so any  damage on that basis was also unwarranted. The  finding on this issue found in the award was set aside.     Similarly,  in connection with claim No. 6, there was  a claim for Rs.24,000 towards expenses for providing a  perma- nent doctor. It was held to be contrary to Clause 7 of  (IV) of  the contract dealing with camp  facilities--medical  aid etc. which, according to the high Court, indicated that  the contractor  himself  was responsible for  providing  medical facilities  to the contract labourers and that the  respond- ents were not bound to pay any additional medical  expenses. The claim on this construction and view of the contract, was held to be not sustainable.     The  arbitrator had awarded Rs.50,000 by way of  damages for sheds and other materials left by the contractor at  the site  under claim No. 7. It was held by the High Court  that it  was the duty of the contractor to remove the  sheds  and materials brought by him and, therefore, the award  allowing such  claim  was  definitely against the  provision  of  the contract.  On  this head it was held that the award  by  the arbitrator  was contrary to the provision of  the  agreement and as such bad. Regarding claim No. 14 for an additional amount of Rs.50,000 it  682 was held that it was unsustainable and due to the misconduct of  the arbitrator that it was awarded. It was  further  ob- served that it was beyond the power of the arbitrator as  it was against the provisions of the contract.     While dealing with that part of the award which  exoner- ated  the  contractor from the risk after holding  that  the termination of the contract by the respondent was valid,  it was held that the same was opposed to the provisions of  the agreement.  The direction to release the amount and  release of security deposit without taking into account the liabili- ty to account for the loss on re-arrangement of work amount- ed  to errors apparent on its face. In the aforesaid  light, the  High Court held that the award under claims Nos.  1(b), 2,  5,  6  & 7 and also the award of an  additional  sum  of Rs.50,000  under claim No. 14 over and above the  claim  al- lowed was against the terms of the contract and,  therefore, liable to be set aside.     Similarly,  in  M.F.A. No. 346/82, the High  Court  went into  the details of the claims and on the  construction  of the contract, came to the conclusion that the termination of the  contract  was  legal and that the  exoneration  of  the contractor  from  the risk and losses was  opposed  to  that finding.  In the aforesaid light, the High Court  set  aside several claims as mentioned in the judgment on the award. On similar or, more or less, identical grounds several items of MFA No. 380/83, were set aside.     One  of  the claims under claim No. 4 was the  award  of Rs.96,000.  The  High Court found that it was  under  clause 20(5) of the General Specification and Special Conditions of the contract, which stated that the Department would not  be

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liable to pay any damages or compensation for hold up caused by  intervention  of the court, labour strike or  any  other extraneous forces and therefore and award under claim No.  4 on the ground of labour unrest and extra work, suffered from being  erroneous and was liable to be set aside. The  clause of the contract covered only situations of labour strike and not labour unrest.     It  was  submitted  before us that the  High  Court  had exceeded its jurisdiction in acting in the manner it did  on these aforesaid aspects. The first question, therefore, that arises for consideration in this case is, whether the  award in question was a speaking award or not. In our opinion, the award  was  not a speaking award. An award can also  be  set aside  if  the arbitrator had misconducted  himself  or  the proceedings or had proceeded beyond his jurisdiction.  These are separate and district 683 grounds  for  challenging an award. Where there  are  errors apparent  on the face of the award it can only be set  aside if  in  the award there is any proposition of law  which  is apparent  on  the face of the award, namely,  in  the  award itself or any document incorporated in the award. The  Judi- cial  Committee  in Champsey Bhara & Co.  v.  Jivraj  Balloo Spinning  &  Weaving Co, Ltd., L 1922 IA 324  has  discussed this  problem. It was held that an award of arbitration  can be  set aside on the ground of error of law apparent on  the face  of the award only when in the award or in  a  document incorporated with it, as for instance a note appended by the arbitrator  stating the reasons for his decision,  there  is found some legal proposition which is the basis of the award and which is erroneous. In that case the appellants had sold cotton  to the respondents by a contract which  contained  a submission  to arbitration of disputes as to quality, and  a further clause submitting to arbitration all other  disputes arising  out of the contract. Cotton was delivered, but  the respondents objected to its quality, and upon arbitration an allowance  was awarded; the respondents  thereupon  rejected the  cotton. The appellants claimed damages for  the  rejec- tion,  and upon that dispute being referred  to  arbitration under  the further clause, were awarded damages.  The  award recited  that  the contract, the date and subject  of  which were  stated, was subject to the rules of the Bombay  Cotton Trade  Association, which were not further referred to;  and that  the respondents had rejected on the grounds  contained in  a  letter of a certain date. That letter  stated  merely that  as the arbitrators had made an allowance of a  certain amount  the respondents rejected the cotton. The High  Court set aside the award, holding that it was bad on its face, in that under one of the rules of the Association the  respond- ents were entitled to reject without liability. It was  held by  the Judicial Committee that the award could not  be  set aside;  the terms of the contract were not  so  incorporated with  the award as to entitle the Court to refer to them  as showing,  either  that the award was wrong in law,  or  that under  them the contract, and therefore the jurisdiction  of the  arbitrators,  were terminated. This  decision  and  the ratio on this proposition of law has always been accepted by the courts of this country and is well-settled.     The next question on this aspect which requires  consid- eration is that only in a speaking award the court can  look into the reasoning of the award. It is not open to the court to probe the mental process of the arbitrator and speculate, where  no  reasons are given by the arbitrator, as  to  what impelled the arbitrator to arrive at his conclusion. See the observations  of  this Court in Hindustan Steel  Works  Con-

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struction Ltd. v. C. Rajasekhar Rao, [1987] 4 SCC 93. In the in-  684 stant case the arbitrator has merely set out the claims  and given  the  history of the claims and then  awarded  certain amount.  He  has not spoken his mind indicating why  he  was done  what he has done; he has narrated only now he came  to make  the  award. In absence of any reasons for  making  the award,  it  is not open to the court to interfere  with  the award.  Furthermore,  in any event,  reasonableness  of  the reasons  given  by  the arbitrator,  cannot  be  challenged. Appraisement of evidence by the arbitrator is never a matter which the court questions and considers. If the parties have selected their own forum, the deciding forum must be conced- ed the power of appraisement of the evidence. The arbitrator is the sole judge of the quality as well as the quantity  of evidence  and  it  will not be for the court  to  take  upon itself the task of being a judge on the evidence before  the arbitrator. See the observations of this Court in  Municipal Corpn. of Delhi v. M/s Jagan Nath Ashok Kumar & Anr., [1987] 4 SCC 497.     The same principle has been stated in M/s. Alopi Parshad &  Sons,  Ltd. v. The Union of India,  (supra).  There  this Court held that the award was liable to be set aside because of  an error apparent on the face of the award. An  arbitra- tion  award might be set aside on the ground of an error  on the  face  of it when the reasons given  for  the  decision, either in the award or in any document incorporated with it, are  based upon a legal proposition which is erroneous.  But where  a  specific question is referred, the  award  is  not liable to be set aside on the ground of an error on the face of the award even if the answer to the question involves  an erroneous  decision  on a point of law. But an  award  which ignores express terms of the contract, is bad. Similarly, in Jivarajbhai  Ujamshi Sheth & Ors. v. Chintamanrao  Balaji  & Ors.  (supra),  this Court reiterated that an  award  by  an arbitrator  is conclusive as a judgment between the  parties and  the  court  is entitled to set aside an  award  if  the arbitrator  has  misconducted himself in the  proceeding  or when the award has been made after the issue of an order  by the  Court superseding the arbitration or after  arbitration proceedings  have  become invalid under section  35  of  the Arbitration  Act or where an award has been improperly  pro- cured  or is otherwise invalid under section 30 of the  Act. An award may be set aside on the ground of error on the face of the award, but an award is not invalid merely because  by a  process of inference and argument it may be  demonstrated that  the arbitrator has committed some mistake in  arriving at  his conclusion. The Court, however, went into the  ques- tion  whether the arbitrator had included  depreciation  and appreciation of certain assets in the value of the  goodwill which he was incompetent to include by virtue of the  limits placed upon his authority by the deed of 685 reference. The Court found that was not a case in which  the arbitrator had committed an error of fact or law in reaching his  conclusions  on the disputed  questions  submitted  for adjudication.  It was a case of assumption  of  jurisdiction not  possessed  by him and that rendered the  award  to  the extent to which it was beyond the arbitrators’ jurisdiction, invalid. This was reiterated by Justice Hidayatullah that if the parties set limits to action by the arbitrator, then the arbitrator  had  to follow the limits set for  him  and  the court can find that he exceeded his jurisdiction on proof of such excess. In that case the arbitrator in working out  net

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profits for 4 years took into account depreciation of immov- able  property.  For  this reason he must be  held  to  have exceeded  his jurisdiction and it is not a question  of  his having  merely  interpreted the  partnership  agreement  for himself  as to which the Civil Court could have had no  say, unless  there was an error of law on the face of the  award. Therefore, it appears to us that there are two different and distinct  grounds involved in many of the cases. One is  the error  apparent on the face of the award, and the  other  is that the arbitrator exceeded his jurisdiction. In the latter case, the courts can look into the arbitration agreement but in the former, it can not, unless the agreement was incorpo- rated or recited in the award. In Upper Ganges Valley  Elec- tricity  Supply Co. Ltd. v. U.P. Electricity Board  (supra), the respondent had taken over the appellant’s  undertakings, but as the parties were at variance on the true market value to  be  paid to the appellant, the matter  was  referred  to arbitration. As the arbitrators were unable to agree on  the question whether the appellant was entitled to  compensation for  the  ’service lines’ which were laid with the  help  of contributions made by consumers, they referred the  question to the umpire. The umpire framed an issue and gave a finding that  the appellant was not entitled to claim from  the  re- spondent  the  value of the position of  the  service  lines which  were laid at the cost of the consumers, for the  sole reason that they were laid at the cost of the consumers. The appellant  filed  an  application under section  30  of  the Arbitration Act, 1940 challenging the validity of the  award on  the  question. The lower court and the High  Court  held against  the appellant. Allowing the appeal, it was held  by this  Court  that the appellant’s  application  for  setting aside the award could succeed only if there was any error of law on the face of the award. There, it was found, that  the umpire  had made a speaking award and there was no  question of  the  construction  of any document  incorporated  in  or appended to the award. If it was transparent from the  award that a legal proposition which forms its basis is erroneous, the award is liable to be set aside. An award may be remitted or set aside on the ground that the  686 arbitrator  in making it, had exceeded his jurisdiction  and evidence of matters not appearing on the face of it, will be admitted in order to establish whether the jurisdiction  had been  exceeded or not, because the nature of the dispute  is something which has to be determined outside award--whatever might  be said about it in the award or by  the  arbitrator. See  in this connection, the observations of Russell on  The Law of Arbitration, 20th Edn. 427. Also see the observations of Christopher Brown Ltd. v. Genossenschaft Oesterreichisch- er etc., [1954] 1 QB 8 at p. 10 and Dalmia Dairy  Industries Ltd v. National Bank of Pakistan, [1978] 2 Lloyd’s Rep  223. It has to be reiterated that an arbitrator acting beyond his jurisdiction--is a different ground from the error  apparent on the face of the award. In Halsbury’s Laws of England (4th Edn. Vol. 2 para 622) one of the misconducts enumerated,  is the  decision  by the arbitrator on a matter  which  is  not included  in the agreement or reference. But in such a  case one has to determine the distinction between an error within the jurisdiction and an error in excess of the jurisdiction. See the observations in Anisminic Ltd. v. Foreign  Compensa- tion  Commission,  [1969]  2 AC 147 and  Regina  v.  Noseda, Field,  Knight & Fitzpatrick, [1958] 1 WLR 793. But, in  the instant case the court had examined the different claims not to  find out whether these claims were within  the  disputes referable  to  the arbitrator, but to find  out  whether  in

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arriving at the decision, the arbitrator had acted correctly or  incorrectly.  This,  in our opinion, the  court  had  no jurisdiction to do, namely, substitution of its own  evalua- tion of the conclusion of law or fact to come to the conclu- sion  that the arbitrator had acted contrary to the  bargain between the parties. Whether a particular amount was  liable to be paid or damages liable to be sustained, was a decision within  the  competency of the arbitrator in this  case.  By purporting to construe the contract the court could not take upon  itself the burden of saying that this was contrary  to the contract and, as such, beyond jurisdiction. It has to be determined  that there is a distinction between disputes  as to the jurisdiction of the arbitrator and the disputes as to in what way that jurisdiction should be exercised. There may be  a conflict as to the power of the arbitrator to grant  a particular  remedy. See Commercial Arbitration by  Sir  N.J. Mustil and Stewart C. Boyd page 84.     The High Court in the judgment under appeal referred  to the decision of the Division Bench of the Kerala High  Court in  State of Kerala v. Poulose, (supra). Our  attention  was also  drawn  to  the said decision by the  counsel  for  the respondents  that  if an arbitrator or  the  umpire  travels beyond his jurisdiction and arrogates jurisdiction that does not  vest  in  him, that would be a ground  to  impeach  the award. If 687 an arbitrator, even in a non-speaking award decides contrary to  the basic features of the contract, that  would  vitiate the  award, it was held. It may be mentioned that in so  far as the decision given that it was possible for the court  to construe  the terms of the contract to come to a  conclusion whether  an award made by the arbitrator was possible to  be made or not, in our opinion, this is not a correct  proposi- tion in law and the several decisions relied by the  learned Judge  in  support of that proposition do not  support  this proposition.  Once there is no dispute as to  the  contract, what is the interpretation of that contract, is a matter for the arbitrator and on which court cannot substitute its  own decision.     Reference  was  also made to the decision  in  State  of Kerala v. Raveendranathan, [1987] 1 KLT 604. Insofar as  the court  held  therein that an arbitrator deciding  a  dispute under  the contract, is bound by the contract, the court  is right. The court cannot, however, substitute the decision of the  arbitrator as to what was meant by the  contract,  once that dispute is conceded to the arbitrator. In so far and to the  extent the aforesaid decision of the Kerala High  Court decided to the contrary, the same is not the correct law.     The  Kerala  High Court in certain decisions  relied  on certain  authorities of England. In a decision of the  House of  Lords  in F.R. Absalom, Ltd. v. Great  Western  (London) Garden Village Society, Ltd., [1933] AC 592 it was held that the arbitrator had erred in his construction of clause 30 of the contract. But as the judgment of Lord Warrington at page 600  of the report, made it quite clear that the  arbitrator had  recited the terms of clause 32 of the contract  in  the award,  and thereafter on the construction of  that  clause, the  court decided that the arbitrator had misconstrued  the effect thereof. That was a case where dispute was not within the  contract. In Heyman & Anr. v. Darwins, Ltd., [1942]  AC 356  the controversy was entirely different.  Similarly,  in Attorney General for Manitoba v. Kelly & Ors., (supra), upon which  the High Court in the judgment under appeal  referred was  again  in a different context. There, in an  action  in Manitoba  against building contractors to recover  sums  im-

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properly  paid to them under a contract, and for damages,  a judgment  by  consent was entered whereby it  was  provided, inter  alia, that the plaintiff should recover, among  other sums,  "all  loss to the plaintiff by  reason  of  defective workmanship and materials", and that these should be set off against  the sums recovered by the plaintiff the fair  value of the work done and materials provided at fair contractor’s prices.  The  judgment, however, provided further  that  the sums to be debited and  688 credited  were to be determined by two appraisers, and  that any matter upon which they differed was to be referred to  a named  umpire  whose decision thereon was to be  final;  and that  the  Manitoba Arbitration Act should  not  apply.  The defendants moved to set aside or vary an award. It was  held that  under the words "all loss" there was  jurisdiction  to award to the plaintiff not only sums actually expended,  but also  a  sum estimated as being necessary to make  good  the defects,  and that extrinsic evidence was not admissible  to show  that the sum allowed to the defendants as set-off  had been reduced in respect of defective work for which they had also been debited. Further, it was held that the award being within  the  jurisdiction conferred by the  submission,  and there  being no error apparent on its face, it could not  be questioned either on the facts or on the law.     In the instant case, the High Court seems to have fallen into an error of deciding the question on interpretation  of the contract. In the aforesaid view of the matter we are  of the  opinion  that the High Court was in error.  It  may  be stated  that if on a view taken of a contract, the  decision of the arbitrator on certain amounts awarded, is a  possible view  though  perhaps not the only correct view,  the  award cannot  be examined by the court in the manner done  by  the High Court in the instant case.     In  light of the above, the High Court, in our  opinion, had  no jurisdiction to examine the different items  awarded clause  by clause by the arbitrator and to hold  that  under the  contract these were not sustainable in the facts  found by the arbitrator.     These appeals are, therefore, allowed. The judgment  and order of the High Court are set aside and the orders of  the learned Sub Judge are restored. In the facts and the circum- stances  of the case, however, the parties will  bear  their own costs. P.S.S.                                         Appeals   al- lowed. 689