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Issues: (i) Whether the arbitral reference was confined to the overrun claim of Rs. 2 crores or extended to all disputes and claims arising out of the collaboration agreement; (ii) Whether the award could be interfered with under Sections 30 and 33 of the Arbitration Act, 1940 on the ground of want of evidence or excess of jurisdiction.
Issue (i): Whether the arbitral reference was confined to the overrun claim of Rs. 2 crores or extended to all disputes and claims arising out of the collaboration agreement.
Analysis: The pre-reference correspondence showed that no specific heads of claim were formally enumerated at the time of nomination of arbitrators. The expressions used in the correspondence, including reference to the disputes and any other dispute that might arise, and the broad language concerning overrun amount and losses sustained, were sufficient to show that the reference was not limited to a single quantified head. The construction adopted by the umpire was a plausible reading of the entire correspondence and could not be replaced by a different interpretation in an application under Sections 30 and 33 of the Arbitration Act, 1940.
Conclusion: The reference was not confined to Rs. 2 crores and all the disputes and claims were within the scope of arbitration.
Issue (ii): Whether the award could be interfered with under Sections 30 and 33 of the Arbitration Act, 1940 on the ground of want of evidence or excess of jurisdiction.
Analysis: The umpire had examined the evidence and made reasoned findings on each head of claim. The Court reiterated that it cannot sit in appeal over an arbitral award, reassess evidence, or interfere merely because another view is possible. Interference is justified only where the award is outside the contract, vitiated by misconduct, improperly procured, or unsupported by any evidence. No such ground was made out, and the umpire had acted within the permissible bounds of the reference and the contract.
Conclusion: The award was not liable to be set aside or curtailed.
Final Conclusion: The challenge to the umpire's award failed, the award was restored in full, and the contrary findings restricting the claim were set aside.
Ratio Decidendi: Where the scope of reference is to be gathered from contemporaneous correspondence, a plausible construction by the arbitrator on the ambit of the disputes will not be disturbed, and an arbitral award cannot be interfered with on a reappraisal of evidence unless it suffers from jurisdictional error, misconduct, or absence of any evidence.
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