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Issues: (i) Whether the contractor had proved that acceptance of the final bill and escalation bill was obtained under coercion or financial hardship so as to negate accord and satisfaction and preserve an arbitrable dispute; (ii) Whether clause 18 of the contract barred the arbitrator from granting compensation or damages for delay and, if so, whether the award could be sustained.
Issue (i): Whether the contractor had proved that acceptance of the final bill and escalation bill was obtained under coercion or financial hardship so as to negate accord and satisfaction and preserve an arbitrable dispute.
Analysis: The letters accepting the final bill and escalation bill as full and final settlement were acted upon, and the plea of coercion was raised only later. No particulars or supporting material were produced to show financial hardship or compulsion. A bare assertion was insufficient to dislodge the effect of the written settlement. On the facts, the acceptance of payment constituted accord and satisfaction, and the arbitrator's contrary finding was held to be unsupported by evidence.
Conclusion: The issue was answered against the appellant. Accord and satisfaction was established and the challenge on this ground failed.
Issue (ii): Whether clause 18 of the contract barred the arbitrator from granting compensation or damages for delay and, if so, whether the award could be sustained.
Analysis: Clause 18 expressly excluded any claim for compensation for loss arising from delay, regardless of cause. The arbitrator was bound by the contract and could not ignore a clear exclusionary stipulation. An award granting delayed compensation contrary to such a clause travels beyond the contractual limits of the reference and suffers from jurisdictional error. The appellate scrutiny under Section 37 was confined and did not justify interference with the Single Judge's view that the award was unsustainable.
Conclusion: The issue was answered against the appellant. Clause 18 barred the claim for delay-related compensation and the award could not be restored.
Final Conclusion: The award, having been set aside on grounds of accord and satisfaction and contractual bar to delay compensation, remained undisturbed and the appeal failed.
Ratio Decidendi: A party who accepts a contractual settlement without contemporaneous protest cannot later defeat accord and satisfaction by a bare, unparticularised plea of coercion, and an arbitrator cannot award compensation in direct contravention of an express contractual exclusion.
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