FOOD CORPORATION OF INDIA v. SURENDRA, DEVENDRA AND MAHENDRA TRANSPORT CO

Aggrieved against the order of the High Court the present appeal has been filed. Counsel appearing for the Corporation relying upon the judgment of this Court in Rajasthan State Mines & Minerals ltd. v. Eastern Engineering Enterprises and Anr., [1999] 9 SCC 283, contended that the arbitrator acted in excess of his jurisdiction in entering upon a dispute and making an award of a claim which was not permitted to be referred to the arbitrator under the contract. According to him, the claim made and given by the arbitrator under issue Nos. 3 and 5 regarding transit loss and demurrage and wharfage charges could not be made as the same had been specifically excluded under Clause XX read with Clause XII of the agreement. We find substance in this submission. Arbitration Clause XX provided that all disputes and differe.nces arising out of or in any way touching or concerning the agreement whatsoever cou Id be referred to the sole arbitration of a person appointed by the Managing Director except "as to any matter the decision of which is expressly provided for in the contract". Clause XII of the agreement provided that the contractor would be liable for all costs, damages, demurrages, wharfage charges and expenses etc. or transit loss suffered by the Corporation and the Sr. Regional Manager shall be the sole authority to determine the said failures on the part of the contractors or the loss caused thereby, thus excluding the reference to the arbitrator for the decision of these disputes. This Court in Rajasthan State Mines & Minerals ltd. 'case (supra) has held: "(f) To find out whether the arbitrator has travelled beyond his .#: ... ~ ,, "' . ..._ t ii- B c D E F G H .. F.C I "SURENDRA. DEVENDRA AND MAHENDRA TRANSPORT CO [BHAN. J] 845 jurisdiction, it would be necessary to consider the agreement between A the parties containing the arbitration clause. The arbitrator acting beyond his jurisdiction is a different ground from the error apparent on the face of the award. (g) In order to determine whether the arbitrator has acted in excess of his jurisdiction what has to be seen is whether the claimant could B raise a particular claim before the arbitrator. If there is a specific terri1 in the contract or the law which does not permit or give the arbitrator the power to decide the dispute raised by the claimant or there is a specific bar in the contract to the raising of the pa11icular claim then the award passed by the arbitrator in respect thereof would be in C excess of jurisdiction.'' High Court issued a direction by order dated 16th June, 1988 referring the disputes for arbitration in terms of Clause XX. The maners which were excluded from the reference to the arbitrator therefore could not be referred to or decided by the arbitrator. Entrance of reference by the arbitrator on D disputes which were excluded from reference and the adjudication thereupon would a1nount to exceeding in the exercise of the jurisdiction as held by this Court in Rajasthan State Mines & Minerals Ltd 'case (supra). Since there was a specific bar to the raising of a claim regarding transit, demurrage and wharfage charges, the award made by the arbitrator in respect thereof would be in excess of the jurisdiction. E Accordingly, the appeal is paitly allowed. Order of the High Court confirming the award regarding the aforesaid two amounts as well, is set aside. Award of the arbitrator on issues 3 and 5 relating to the refund of Rs. 67,149.65 paise towards the transit loss and the refund of Rs. 1,68,500 towards de1nurrage and wharfage charges is set aside. Corporation would not be liable to pay these amounts. There is no infirmity in the award regarding other claims made by the respondents. There shall be no order as to costs. F K.K.T. Appeal partly allowed.