Contract variation does not extinguish arbitration clause; arbitral tribunal may determine damages and quantify monetary relief.

Material modifications to a contract did not rescind the original agreement where the later arrangements merely adjusted performance and were not inconsistent with the earlier bargain; the arbitration clause therefore survived and continued to bind the parties. A second arbitral tribunal constituted under the chamber rule was held validly appointed, with no legal infirmity in its authority to proceed. Where the dispute before reference already concerned breach, cover-price difference, and consequential damages, the arbitrators were entitled to assess liability and quantify the monetary claim on the materials before them, even if the pleadings were inartfully framed. The award was upheld on these objections and the challenge to set it aside failed.

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Issues: (i) whether subsequent variations in the contract had rescinded the original agreement and extinguished the arbitration clause; (ii) whether the constitution of a second arbitral tribunal under the chamber rule was invalid; (iii) whether the arbitrators had jurisdiction to award and quantify damages and a specific monetary sum.

Issue (i): whether subsequent variations in the contract had rescinded the original agreement and extinguished the arbitration clause.

Analysis: The modifications were found to be material, but they did not go to the root of the contract or alter its essential character. Mere alteration of contractual terms does not amount to rescission unless the later arrangement is so inconsistent with the earlier one that the parties must be taken to have intended to abandon it. The later arrangements were held to be adjustments made for performance of the original bargain, and the arbitration clause was not inconsistent with them.

Conclusion: The original contract remained subsisting, and the arbitration clause continued to operate.

Issue (ii): whether the constitution of a second arbitral tribunal under the chamber rule was invalid.

Analysis: The challenge to the chamber rule and the consequent reconstitution of the tribunal was rejected by reference to the earlier reasoning on the validity of such procedural rules. No legal infirmity was found in the second tribunal's constitution or authority to proceed.

Conclusion: The second tribunal was validly constituted and had authority to arbitrate.

Issue (iii): whether the arbitrators had jurisdiction to award and quantify damages and a specific monetary sum.

Analysis: The correspondence and pleadings showed an existing dispute before reference concerning breach, entitlement to the difference between contract price and cover price, and consequential damages. The prayer was inartfully framed, but the substance of the claim was for monetary relief. The arbitrators were not confined by technical pleading rules and were entitled to assess the amount on the materials before them, especially where particulars were later supplied and the opposite party had an opportunity to meet the case.

Conclusion: The arbitrators had jurisdiction to award damages and to determine the quantified sum.

Final Conclusion: The award was upheld on the substantive objections, and the challenge to set it aside failed, while the ancillary application for enlargement of time was granted.

Ratio Decidendi: A contract is not rescinded merely because its terms are materially modified; unless the later arrangement is inconsistent with the original to the point of extinguishing it, the original arbitration clause survives, and an arbitral tribunal may assess damages and grant monetary relief where the dispute on liability and quantum existed before reference.

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