Arbitral award interference is limited to patent errors on the face, while a damages clause may exclude ordinary contractual damages.

An arbitral award will not be disturbed unless a patent error or error of law appears on its face; a court cannot reappreciate contractual construction merely because another view is possible. The damages clause was treated as a special contractual provision limiting recovery to the additional cost of substitute equipment and, where applicable, liquidated damages, so the ordinary measure under the Contract Act did not apply. The claimants also failed to prove substitute purchases linked to the short supply or any actual loss. On that basis, interference was refused and the damages claim was rejected.

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Issues: (i) Whether the arbitral award disclosed any patent error or error of law on its face so as to justify interference under Section 30 of the Arbitration Act, 1940. (ii) Whether clause 14(ii) of the contract displaced the ordinary measure of damages under Section 73 of the Indian Contract Act, 1872 and required proof of additional purchase and loss.

Issue (i): Whether the arbitral award disclosed any patent error or error of law on its face so as to justify interference under Section 30 of the Arbitration Act, 1940.

Analysis: Interference with an arbitral award is confined to cases where the legal error is apparent on the face of the award. A court cannot reappreciate the construction placed by the arbitrators on the contract merely because another view is possible. The exercise of testing the contractual clause and the arbitral reasoning to see whether a different legal conclusion could follow would involve a detailed process of construction and is not enough to establish an error apparent on the face of the award.

Conclusion: No patent error or error of law on the face of the award was made out, and interference was not warranted.

Issue (ii): Whether clause 14(ii) of the contract displaced the ordinary measure of damages under Section 73 of the Indian Contract Act, 1872 and required proof of additional purchase and loss.

Analysis: Clause 14(ii) was construed as a special contractual provision governing damages, under which liability was confined to additional cost of substitute equipment and, where applicable, liquidated damages. On that construction, the ordinary measure under Section 73 was not attracted. The claimants also failed to establish that, after cancellation, they had made purchases referable to the alleged short supply or that any loss had in fact been suffered.

Conclusion: Clause 14(ii) excluded recourse to Section 73 on the facts found, and the claim for damages was rightly rejected.

Final Conclusion: The arbitral view and the High Court's refusal to interfere were upheld, and the petitions failed.

Ratio Decidendi: A court will not set aside an arbitral award on the basis of a supposed legal mistake unless the error is patent on the face of the award, and a special contractual clause governing damages may exclude the ordinary measure under Section 73 of the Indian Contract Act, 1872 when so construed by the arbitrators.

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