Contractual finality for delay compensation excludes liquidated damages from arbitration and bars arbitrator review.

Clause 2 gave the Superintending Engineer final authority to determine liability and quantum for delay compensation, so disputes over pre-estimated liquidated damages were excluded from arbitration. Because the contract expressly made that determination final and treated such matters as excepted, the arbitrator had no jurisdiction to reopen the levy or recast it as penalty. The award was therefore rightly interfered with insofar as it examined the compensation under Clause 2, and the contractor's challenge failed.

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Issues: (i) Whether the levy of pre-estimated liquidated damages and reasonable compensation by the Superintending Engineer under Clause 2 of the contract was arbitrable. (ii) Whether the levy of liquidated damages under Clause 2 was final and an excepted matter outside the jurisdiction of the arbitrator.

Issue (i): Whether the levy of pre-estimated liquidated damages and reasonable compensation by the Superintending Engineer under Clause 2 of the contract was arbitrable.

Analysis: Clause 2 created a complete contractual mechanism for fixing compensation for delay and expressly vested the Superintending Engineer with authority to determine the liability and quantum. The clause also made that decision final. Read with the arbitration clause, the contractual scheme showed that disputes concerning levy of compensation under Clause 2 were excluded from arbitral scrutiny. The distinction drawn in cases where only quantification was reserved was held inapplicable because here the contractual text itself conferred finality on the levy.

Conclusion: The levy of liquidated damages under Clause 2 was not arbitrable.

Issue (ii): Whether the levy of liquidated damages under Clause 2 was final and an excepted matter outside the jurisdiction of the arbitrator.

Analysis: The contract expressly provided that the Superintending Engineer's decision on compensation for delay would be final, and the parties had consciously excluded such matters from arbitration. The arbitrator therefore could not reopen the correctness of the levy or treat it as penalty so as to negate the contractual finality. The Court also held that the reasoning applicable where liability itself remains open for adjudication did not assist the contractor, because the present clause itself fixed both liability and finality.

Conclusion: The levy of liquidated damages was an excepted matter and the arbitrator had no jurisdiction to decide it.

Final Conclusion: The arbitral award was rightly interfered with to the extent it had gone into the levy of compensation under Clause 2, and the contractor's challenge failed.

Ratio Decidendi: Where a contract expressly entrusts a named authority with the final determination of compensation for delay and excludes such determination from arbitration, the resulting claim is an excepted matter beyond the arbitrator's jurisdiction.

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