Waiver of contractual claim and limits on finality clauses shape arbitral jurisdiction over extended stay and additional work disputes

A claim for extended stay compensation was treated as consciously waived where the bidder quoted "NIL" for that head and accepted the letter of acceptance stating that no such compensation was payable, so it did not give rise to an arbitrable dispute. By contrast, a clause making the Engineer-in-Charge's decision final on additional works did not by itself exclude arbitration, because the underlying claim remained within the contractual arbitration framework and capable of adjudication. Arbitration was therefore confined to the claim for additional works, while the extended stay compensation claim was excluded from reference.

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Issues: (i) Whether the claim for extended stay compensation gave rise to an arbitrable dispute under the contract; (ii) Whether the claim for payment for additional works was excluded from arbitration by reason of finality attached to the Engineer-in-Charge's decision.

Issue (i): Whether the claim for extended stay compensation gave rise to an arbitrable dispute under the contract.

Analysis: The contractual scheme required the bidder to quote a rate for extended stay compensation, and the tender documents provided that if no rate was indicated, no such compensation would be payable. The petitioner had quoted "NIL" against that head and had accepted the position recorded in the letter of acceptance that extended stay compensation was not applicable. On that basis, the claim was treated as one which had been consciously foregone under the contract.

Conclusion: The claim for extended stay compensation was held not to give rise to an arbitrable dispute and was not referred to arbitration.

Issue (ii): Whether the claim for payment for additional works was excluded from arbitration by reason of finality attached to the Engineer-in-Charge's decision.

Analysis: The contract contemplated claims for additional works and provided that the Engineer-in-Chief's decision would be final. That finality, however, could not be treated as excluding all judicial scrutiny or as overriding the arbitration clause. The question whether the claim was justified remained capable of adjudication through the agreed arbitral process.

Conclusion: The claim for payment for additional works was held to be arbitrable and was referred to arbitration.

Final Conclusion: The proceedings were allowed only in part, with arbitration confined to the claim for additional works and the claim for extended stay compensation excluded from reference.

Ratio Decidendi: A claim is not arbitrable where the contract, read with the bidder's accepted quotation and the letter of acceptance, shows a conscious waiver or exclusion of that head of claim, but a contractual clause giving finality to an engineer's decision does not by itself oust arbitration for a disputed claim otherwise within the arbitration agreement.

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