Broad arbitration clauses cover the substance of disputes; discretionary remission of an award should not be disturbed lightly.

A broad arbitration clause covering disputes arising out of or in relation to the agreement was construed by looking at the substance of the claim, not technical objections. On that approach, the claim for reimbursement of plant loss and related interest was treated as within the arbitration reference, so the arbitrators had jurisdiction to decide it. The Civil Judge's discretionary remission of the award under section 16(1)(c) of the Arbitration Act, 1940 was also upheld because an apparent legal error and failure to consider relevant material justified remission rather than setting aside the award. The appellate interference was therefore not sustained, and the remission order was restored.

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Issues: (i) Whether the claim for reimbursement of Rs. 107.54 lakhs and interest thereon fell within the scope of the arbitration reference; (ii) Whether the Civil Judge was justified in remitting the award to the arbitrators under section 16(1)(c) of the Arbitration Act, 1940.

Issue (i): Whether the claim for reimbursement of Rs. 107.54 lakhs and interest thereon fell within the scope of the arbitration reference.

Analysis: The arbitration clause covered any question, dispute or difference arising out of or in relation to the agreement. The claim raised by the appellant in the notices, the pleadings before the arbitrators, and the framed issues all showed that the dispute regarding loss on the plant and the related interest was part of the controversy submitted to arbitration. In construing an arbitration clause of wide amplitude, the substance of the claim must be seen and not defeated by a technical or hair-splitting approach.

Conclusion: The claim was within the scope of the arbitration reference and the arbitrators had jurisdiction to decide it.

Issue (ii): Whether the Civil Judge was justified in remitting the award to the arbitrators under section 16(1)(c) of the Arbitration Act, 1940.

Analysis: Section 16(1)(c) confers a discretionary power to remit an award when an objection to legality is apparent on its face. The Civil Judge had found an apparent error and a failure to consider relevant material, and in those circumstances chose remission rather than setting aside the award. That discretion was judicially exercised and did not warrant interference. The High Court erred in treating part of the award as beyond the arbitrators' jurisdiction.

Conclusion: The remission order was justified and the High Court ought not to have interfered.

Final Conclusion: The judgment of the High Court could not stand, and the order remitting the award to the arbitrators was restored.

Ratio Decidendi: Where an arbitration clause is couched in broad terms, the court must examine the substance of the dispute to determine jurisdiction, and a properly exercised discretionary order remitting an award under section 16(1)(c) of the Arbitration Act, 1940 should not be disturbed in appeal.

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