Contractual bar on labour wage escalation prevails; arbitral award granting reimbursement for increased minimum wages was set aside.

A clear contractual bar against escalation or reimbursement for increased labour wages must be enforced according to its plain terms. The contract expressly excluded claims for wage increases arising from local factors or regulations, so statutory or governmental revisions during execution were not reimbursable. The High Court's attempt to read the clause with another provision was rejected because that provision dealt with a different subject and did not make the wage bar subordinate to it. The arbitral award allowing escalation on this head could not stand and was set aside.

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Issues: Whether the contractor was entitled to reimbursement of increased minimum wages despite Clause 19 and Clause 6.3 of the contract, and whether the arbitral award and the High Court's interference with it were legally sustainable.

Analysis: The contract expressly barred escalation or reimbursement for increase in the wages of labour and stated that the contractor would have no claim if, because of local factors or regulations, wages had to be paid above the stipulated minimum. On the plain language of Clause 19 read with Clause 6.3, the parties had agreed that even statutory or governmental wage increases during execution would not be reimbursable. The High Court's approach of reading Clause 19 with Clause 25 was rejected because the clauses dealt with different subjects and Clause 25 could not override the clear bar contained in Clause 19. In the absence of any contractual expression making Clause 19 subject to another clause, the award granting escalation on this head could not stand.

Conclusion: The contractor was not entitled to claim escalation in minimum wages, and the arbitral award as upheld by the High Court was set aside.

Ratio Decidendi: A clear contractual bar against escalation or reimbursement for increased labour wages must be given effect according to its plain terms, and it cannot be diluted by reading it with another clause dealing with a different subject unless the contract itself so provides.

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