Arbitrator's jurisdiction over exchange fluctuation claims upheld where contract lacked a specific prohibition against compensation.
A claim for compensation due to exchange rate fluctuation was not barred where the contract contained no specific prohibition and also contemplated disclosure of a foreign exchange component with payment in foreign currency or its equivalent. Because the reference covered disputes arising from the contract, including its construction, the arbitrators were competent to decide whether such compensation could be granted. The court could not reappraise the contractual construction in a non-speaking award merely because another view was possible, and it could take into account the Government circular and the parties' conduct. The award was therefore not liable to be set aside for want of jurisdiction under section 30, though interest was modified.
Issues: Whether a claim for compensation on account of exchange rate fluctuation was barred by the contract and, therefore, beyond the arbitrator's jurisdiction under section 30 of the Arbitration Act, 1940.
Analysis: The contract contained a firm-price stipulation, but it also required the bidder to disclose any foreign exchange component and contemplated payment of the corresponding portion in foreign currency or its equivalent. The arbitral reference expressly covered disputes arising out of the contract, including its construction. In the absence of any specific contractual prohibition against such a claim, the question whether exchange fluctuation compensation could be granted was an issue of contractual interpretation that the arbitrators were competent to decide. The court's interference with a non-speaking award is limited, and it cannot re-construe the contract merely because another view is possible. The arbitrators were also entitled to consider the Government circular and the surrounding conduct of the parties while construing the agreement.
Conclusion: The claim was arbitrable, the arbitrators did not act beyond jurisdiction, and the award could not be set aside under section 30 on the ground urged.
Final Conclusion: The award was restored with modification of the interest rate, and the appellant succeeded on the core jurisdictional challenge.
Ratio Decidendi: An arbitral award on contractual interpretation cannot be set aside for want of jurisdiction unless the contract or governing law specifically prohibits the claim; absent such a bar, the arbitrator's construction of the contract is not open to reappraisal under section 30 of the Arbitration Act, 1940.
TaxTMI 
AI Drafter ✕
TaxTMI 
