Arbitral award upheld where fair opportunity was given, interest claim fell within reference, and limitation did not bar the dispute.

An arbitral award could not be set aside for breach of natural justice or misconduct where the party was given time to file written arguments, sought no further extension, and simply failed to comply. A broadly worded arbitration clause covered claims for interest on contractual dues, so the arbitrator did not exceed jurisdiction by awarding interest. The limitation objection also failed because arbitration was treated as commenced on service of the notice seeking reference, the demand was made within three years of the relevant events, and the objection had not been consistently pressed earlier. The award was therefore restored and the substantive objections were rejected.

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Issues: (i) whether the award could be set aside on the ground of violation of natural justice and legal misconduct by the arbitrator; (ii) whether the arbitrator exceeded jurisdiction in entertaining and awarding interest on the contractual claim; (iii) whether the claim was barred by limitation.

Issue (i): whether the award could be set aside on the ground of violation of natural justice and legal misconduct by the arbitrator.

Analysis: The arbitrator had granted time to file written arguments and further time was also allowed, but no compliance was made and no further extension was sought. Refusal to grant additional indulgence in these circumstances did not amount to unfairness or breach of natural justice. The reasoning adopted by the Deputy Commissioner treated misconduct as if it included conduct not supported by the law of arbitration.

Conclusion: The award could not be set aside on the ground of violation of natural justice or misconduct of the arbitrator.

Issue (ii): whether the arbitrator exceeded jurisdiction in entertaining and awarding interest on the contractual claim.

Analysis: The arbitration clause was broad enough to refer all questions, disputes and claims arising out of or relating to the contract. The clause did not exclude claims for interest on amounts due under the contract, and the award did not show any reliance on the inadmissible component relating to depreciation for purchase value of money. A claim for interest on withheld contractual dues was within the scope of reference.

Conclusion: The arbitrator did not exceed jurisdiction, and the award was not invalid on that ground.

Issue (iii): whether the claim was barred by limitation.

Analysis: Under the Arbitration Act, limitation applied to arbitration as it applied to suits, and an arbitration was treated as commenced when a notice requiring reference was served. The demand for reference was made within three years of the relevant events, and the objection of limitation had not been raised consistently at earlier stages. On the material before the Court, the claim was prima facie within time.

Conclusion: The claim was not barred by limitation.

Final Conclusion: The award stood restored and the appellants succeeded on all substantive objections considered by the Court.

Ratio Decidendi: An arbitral award cannot be set aside for misconduct where the party was given a fair opportunity and merely failed to use the time granted, and a broadly worded arbitration clause will encompass a claim for interest on sums due under the contract unless such claim is expressly excluded.

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