Continental Enterprires vs National Acmf
1991 Latest Caselaw 45 Del

JUDGMENT

P.K. Bohri, J.

(1) [ED. facts : 20 years back on 9.1.81, respondent agreed to sell to pff. 10,000 M.T. of rice It was to be supplied Fob stowed liner at Kandla port. Average rate of loading was 750 M.T. per day during Jan. & Feb. Petitioner could not bring the ship in time though Deft had stacked rice in Jute bags. Petitioner could bring the ship only on 18.4.91 and was given berth on 26.4.81. Agreement was accordingly modified. Rice was to be loaded on bag selection method which meant Checking 10%. The checking was done by independent surveyors who insisted on 100% checking and due to this and non working for 24 hours about half of the agreed weight of 760 M.T. could be loaded in a day. For this pff. was asked to pay demurrage who claimed that Deft. was liable for this. The dispute was referred to arbitration who gave award in favor of Deft. Pff. filed objections for setting aside of the award.]

(2) The short question which arises for decision is whether arbitrator ignored any material evidence to give a finding that the respondent was not at fault in not loading the cargo @ 750 M.T. per day. It is true that the surveyor in evidence had mentioned certain facts which could show that the surveyor could not function for 24 hours because additional labour was not provided at the Port and even lighting was poor. The arbitrator has appraised the evidence and has stated in his award that even sufficient cranes were not available during the night and lights were defective at the Port and thus, no loading could be done in the night. It is true that according to the contract, 750 M.T. were to be loaded in 24 hours but the conditions had been such the respondent could not have carried out the surveyor could clear only 300 to 400 hours per day and thus, the petitioner had to pay demurrage charges to the shipper. The contract did not say that the Seller would not have to pay half of the demurrage rate in case delay was to occur on the part of the independent surveyor. The contract clearly provided that if Seller failed to load the said quantity the Buyer shall be entitled to demurrage on prorata basis and in case Seller was to gain time, the Buyer would pay half the demurrage rate. So, the finding of the arbitrator that the petitioner was at fault for the delay occurring in loading the cargo in the ship is not based on any evidence and is perverse. It is also true that the finding of the arbitrator that the delay has not occurred due to any fault of the respondent cannot be said to be perverse because evidence clearly indicated that independent surveyor could clear only 300 bags or so per day because the independent surveyor was to carry out cent percent bags selection If that is the position, arbitrator was, in my opinion, bound to give some interpretation to the contract in order to determine whether in such a situation the respondent was liable to pay the demurrage charges to the petitioner or not.

(3) The learned counsel for the respondent has referred to certain judgments in support of his contention that the court has limited jurisdiction to examine the findings of the arbitrator. The legal proposition, in fact, is not in dispute. If the findings of the arbitrator are based on evidence the court is not to sit over those findings and appraise the evidence and come to any different finding. In M/s. Hindustan Tea Co. vs. M/s. K. Sashikant & Co. , it has been laid down that arbitrator is made the final arbitrator of the disputes between the parties and the award is not open to challenge on the ground that the arbitrator has given a wrong conclusion or has failed to appreciate facts. However, in K.P. Poulose vs. State , it has been held that if relevant evidence is not considered by the arbitrator, the same would amount to judicial misconduct and the award can be set aside. So, it is a question of fact to be seen in each case whether the arbitrator has ignored any material evidence or not in giving a finding. It is true that if the arbitrator has appraised the evidence and given the findings then the same are final and cannot be challenged. In the present case, the arbitrator had given the findings ignoring the material evidence which could clearly show that the delay in loading could not be imputed to the petitioner. Even if the delay in loading could not be imputed to the respondent, even then the arbitrator was duty bound to give his interpretation with regard to the terms of the contract as to whether the respondendent was liable to pay any demurrage. The arbitrator has not given any interpretation to the terms of the contract as amended by addendum. It is true as laid down in Sudershan Trading Co. vs. Govt. of Kerala, , that the interpretation of the contract is within the domain of the arbitrator and in case the arbitrator takes a particular view of the contract the Court cannot substitute its own decision. It is also true as laid down in M/s. Tarapore & Co. vs. Cochin Shipyard, , that if a question of law is referred to the arbitrator the finding of the arbitrator on such a question would be final. In the present case, I have gone through the award and find that the arbitrator has not given any interpretation of the contract with regard to the aforesaid terms which could be said to be final. The arbitrator had only given the findings of facts which stand vitiated in as-much as the arbitrator had ignored the material evidence discussed above. Hence, it Has to be held that there exists error apparent on the face of the record which vitiates the award. The award is liable to be set aside. Matter remanded.