Liquidated damages clause does not bar arbitration where the real dispute is breach or liability, not mere quantification.

A clause authorising only assessment or quantification of liquidated damages does not by itself make the underlying dispute on breach, delay, or liability an excepted matter. The contract here contained no specific final decision-maker for determining whether the supplier was in breach or whether delay was attributable to it, so that dispute remained arbitrable. The special conditions also did not override the general conditions, because the liquidated damages provision in clause 62 expressly referred back to the general conditions for rate and mode of quantification. The contractual dispute over delay and liability for liquidated damages was therefore fit for arbitration.

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Issues: (i) Whether the levy and recovery of liquidated damages under clause 16.2 formed an excepted matter under clause 20.1 and was therefore not arbitrable; (ii) Whether clause 62 of the special conditions overrode clause 16.2 of the general conditions.

Issue (i): Whether the levy and recovery of liquidated damages under clause 16.2 formed an excepted matter under clause 20.1 and was therefore not arbitrable.

Analysis: Clause 20.1 excluded only those matters whose decision was specifically provided under the agreement. Clause 16.2 dealt with the purchaser's power to quantify liquidated damages after delay was established, but it did not provide any adjudicatory mechanism for deciding the primary dispute whether the supplier was in breach or whether delay was attributable to it. The fixing of liability for liquidated damages and the quantification of such damages were distinct. Since the contract contained no specific final decision-maker on the question of breach or liability, the dispute on delay and liability remained within arbitration. The clause making quantification final and unchallengeable was also inconsistent with the law against restraint of legal proceedings.

Conclusion: The levy of liquidated damages was not an excepted matter to the extent the dispute concerned breach and liability, and the dispute was arbitrable.

Issue (ii): Whether clause 62 of the special conditions overrode clause 16.2 of the general conditions.

Analysis: Clause 62 did not create any inconsistency with clause 16.2. It dealt both with liquidated damages and with incentives for early commissioning, and the liquidated damages portion expressly referred back to the general conditions for the rate and mode of quantification. Accordingly, clause 62 did not displace clause 16.2.

Conclusion: Clause 62 did not override clause 16.2.

Final Conclusion: The order appointing an arbitrator was upheld, and the contractual dispute over delay and liability for liquidated damages was held fit for arbitration.

Ratio Decidendi: A contractual clause that merely authorises assessment or quantification of liquidated damages does not make the underlying dispute about breach or liability an excepted matter unless the agreement specifically provides a final adjudicatory decision on that issue.

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