Appeal No 2418 of 1966
Appeal by special leave from the judgment and order dated February 19 1963 of the Punjab High Court Circuit Bench at Delhi in FA0
Appeal No 123 D of 1961
R L Agarwal K L Mehta section K Mehta P N Chadda
M G Gupta and K R Nagaraja for the appellant
L M Singhvi Badri Dass Sharma and section P Nayar for the respondent
The Judgment of the Court has delivered by Shelat J
By this appeal under special leave the appellantcompany challenges the correctness of the judgment of the High Court of Punjab dated February 19 1963 refusing to set aside an umpire s award dated March 22 1958
The award was in respect of certain disputes between the company and the Union of India in the matter of disposals of the United States surplus war materials left by the Government of the USA at the end of the last World War
These surplus materials called the US Surplus Stores consisted of vehicles and other stores
It was said that these were sold to the company by the Director General Disposals through correspondence and sale notes
These contracts of sale were subject to the General Conditions of Contract Form Con 117
Cl 13 of these General Condi tions provided that In the event of any question or dispute arising under these conditions or any special conditions of contract or in connection with this contract the same shall be referred to the award of an arbitrator to be nominated by the Director General and an arbitrator to be nominated by the contractor or in the case of the said arbitrators not agreeing then to the award of an Umpire to be appointed by the arbitrators in writing before proceeding on the reference 
Upon every and any such reference the assessment of the costs incidental to the reference and award respectively shall be in the discretion of the arbitrators or in the event of their not agreeing of the Umpire appointed by them
 285 Disputes having arisen between the parties both as regards the contents and the quantity of the vehicles delivered under the contracts they were referred in the first instance to two arbitrators nominated by the parties and ultimately to an umpire
The disputes were crystallized into nine claims by the appellant company totalling Ks
67334500  and several counterclaims by the Government of India
At the end of the arbitration the umpire by his said award disallowed all the claims made by the company except one for which he awarded RS
694000 and held in respect of the counter claims filed by the Government of India that the appellant company was liable to pay to the Government in all Rs 362368250 P and costs amounting to Rs 540544 
In the result after deducting the claim allowed to the appellant company the company was held liable to pay to the Government Rs 347022650 P
The award having been filed by the umpire in the Court of the District Judge Delhi and the Government of India having thereupon applied for a decree in term of the award the company applied to the Court for setting aside the award urging several grounds for so doing
The District Judge by an elaborate judgment declined to set aside the award
He however held that the award suffered from an error apparent on the face of the award in respect of the appellant s claim No 111a and further held that the counter claims 11 IV V and VI made by the Government were not covered by the reference and consequently the umpire had no jurisdiction to go into them
Declining however to set aside the award he remitted it for reconsideration of the aforesaid items and also for readjustment of the amount of costs in the evert of enhanced compensation being awarded to the company in respect of its claim No 111a
Dissatisfied with the judgment of the court the company filed an appeal before the High Court
The Union of India also filed certain coss objections
The High Court heard the appeal and the cross objections together and by its aforesaid juggment dismissed both the anneal and the cross objections and upheld the judgment of the District Judge
In support of the claim that the award was liable to be set aside counsel for the company submitted the following six propositions for our acceptance  1 that the contracts of sale entered into by the company were misconstrued by the umpire and such misconstruction appears on the face of the award 2 that the umpire
as also the High Court failed to take into consideration several documents while deciding the scope of the sales 286 3
that in respect of claim No VI and counter claim No VI of the Government the umpire acted beyond his jurisdiction as those question did not fall within the scope of the reference 4
that the umpire did not act according to law but acted as a conciliator and based his award on mere conjectures and surmises 5
that his conclusion on ground rent awarded to the Government was based on no evidence and 6
that the costs awarded to the Government were altogether disproportionate
Before we proceed to consider these propositions it is necessary to ascertain the scope of section 30 of the and the principles underlying that section
The general rule in matters of arbitration awards is that where parties have agreed upon an arbitrator thereby displacing a court of law for a domestic forum they must accept the award as final for good or ill
In such cases the discretion of the court either for remission or for setting aside the award will not be readily exercised and will be strictly confined to the specific grounds set out in sections 16 and 30 of the Act
In Hodgkinson vs Fernie1 Williams J stated the principle as follows  where a cause or matters in difference are referred to an arbitrator whether a lawyer or a layman he is constituted the sole and final judge of all questions both of law and fact 
The only exceptions to that rule are cases where the award is the result of corruption or fraud and one other which though it is to be regretted is now I think firmly established viz where the question of law necessarily arises on the face of the award or upon some paper accompanying and forming part of the award
 This observation was recently cited with approval in Union of India vs Bungo Steel Furniture Pvt
Ltd 2 The principle is that the Court while examining an award  will look at documents accompanying and forming part of the award
Thus if an arbitrator were to refer to the pleadings of the parties so as to incorporate them into the award the Court can look at them
In some cases however courts extended the principle and set aside the award on a finding that the contract though only referred to but not incorporated into the award as part of it had been misconstrued and such misconstruction had 1 18573CBNS189 202
2 1967 1 SCR324
287 been the basis of the award
Thus in Landauer vs Asser1 the dispute between buyers and sellers of goods was as to who was entitled to certain sums paid upon a policy of insurance upon the goods
This was referred to arbitration and the umpire made his award basing it on the construction he placed on the contract namely that as the parties to the contract were by the terms thereof principals their interest and liability in insurance was defined to be the value of the invoice plus 5 per cent
On an application to set aside the award the Court of Appeal held that inasmuch as the umpire had referred to the contract and the terms thereof it was justified in looking at the contract and having done so found that he had based his decision entirely upon the terms of the contract
It also found that since the contract if properly construed did not justify the decision the award was bad on the face of it and was liable to be set aside
A similar view appears also to have been taken in FR Absalom Ltd vs Great Western London Garden Village Society Ltd 
2  where the award set out the relevant words and cl 30 of the contract and also the conclusion of law on the meaning of those words
Lord Russel said that since the award recited the contract and referred in terms to the provisions of cl 30 thereby incorporating it into the award and then stated the construction which the arbitrator placed upon that clause the Court was entitled to look at that clause to ascertain if the construction placed by the arbitrator was erroneous
The correctness of the decision in Landauer vs Asser1 was challenged before the Privy Council in Chempsey Bhara  Co vs Jivraj Balloo Spinning and Weaving Co Ltd2 Lord Dune din however did not expressly overrule it but rested content by observing that that decision was not binding on the Board
But he formulated the principle thus  LM15  An error in law on the face of the award means that you can find in the award or a document actually incorporated thereto as for instance a note appended by the arbitrator stating the reasons for his judgment some legal proposition which is the basis of the award and which you can then say is erroneous
It does not mean that if in a narrative a reference is made to a contention of one party that opens the door to seeing first what that contention is and then going to the contract on which the parties  rights depend to see if that contention is sound
 1 19052 KB 184
2 3 1923 AC480
288 The Privy Council upheld the award
stating that it was impossible to say what was the mistake on the face of the award which the arbitrators had made as they had not tied themselves down to any legal principle which was unsound
The mere fact that the court would have construed a document differently than the arbitrator would not induce the court to interfere unless the construction given by the arbitrator is such that it is against the well established principles of construction
see Kelanton vs Duff Development Co1 I In an illuminating analysis of a large number of earlier decisions including Landauer2 and F R Absalom Ltd3 Diplock LJ in Giacomo Costa Fu Andrea vs British Italian Trading Co Ltd 4  recorded his conclusion thus It seems to me therefore that on the cases there is none which compels us to hold that a mere reference to the contract in the award entitles us to look at the contract
It may be that in particular cases a specific reference to a particular clause of a contract may incorporate the contract or that clause of it in the award
I think that we are driven back to first principles in this matter namely that an award can only be set aside for error which is on its face
It is true that an award can incorporate another document so as to entitle one to read that document as part of the award and by reading them together find an error on the face of the award
 The question whether a contract or a clause of it is incorporated in the award is a question of construction of the award
The test is does the arbitrator come to a finding on the wording of the contract
If he does he can be said to have impliedly incorporated the contract or a clause in it whichever be the case
But a mere general reference to the contract in the award is not to be held as incorporating it
The principle of reading contracts or other documents into the award is not to be encouraged or extender
see Babu Ram vs Nanhemal  The rule thus is that as the parties choose their own arbitrator to be the judge in the dispute between them they cannot when the award is good on the face of it object to the decision either upon the law or the facts
Therefore
even when an arbitrator commits a mistanke either in law or in fact in determining the matters referred to him but such mistake does not appear on the face of the 1 1 1923 AC395 2 1905 2 KB184 3 4 19622 All ER 53 62 5 C A NO
1 07 of 1966 Decided on 5 12 1968
289 award or in a document appended to or incorporated in it so as to form part of it the award will neither be remitted nor set aside notwithstanding the mistake
In the light of the principle above stated the first question calling for determination is is there an error apparent on the award in the sense that the umpire misconstrued the contracts of sale inasmuch as though those contracts were contained in sale notes as well as in several letters he considered the sale notes only as containing the contracts of sale disregarding the corres pondence which had taken place between the company and the Director General Disposals and his officers  Such a question would undoubtedly be one of law
But the disputes referred to the umpire contained disputes both of fact and law
Ordinarily the decision of the umpire even though it be on a question of law would be binding on the parties
The court would only interfere if the case falls within the exceptions mentioned by Williams J in Hodgkinson vs Fernie1 and reaffirmed by Diplock L J in Giacomo Costa Fu Andrea  vs British Italian Trading Co Ltd2
There were in all three separate sales to the appellant company which according to the respondents were incorporated in sale notes Nos 160
161 and 197
Before the sale note 160 was issued on July 11 1946 it is a fact that the company had written a letter dated July 10 1946 which was also endorsed by two officers of the Director General Disposals
The letter contained three clauses the first of which stated that Ms Allen Berry will buy the Moran Vehicles Depot as is where is for Rs 18000000
The two other clauses provided the manner and time of payment of the sale price
But the letter commenced
with the following words Pending detailed record of terms tomorrow the following are the broad heads of agreement which will form the basis of sale of surplus vehicles
 The next day ie July 11 1946 the Department issued sale note 160 which in clear terms stated that what was purchased were all vehicles and trailers lying in Moran Depot which meant that the vehicles sold were only those that were actually lying in that depot on July 11 1946 and not those outside it or those borne on the records of that depot as contended by the company
It however appears from the judgment of the Trial Court para 206 that on receipt of sale note 160 the company wrote a letter on July 11 1946 in which it contended that We have purchased the entire vehicle depot of Moran
1  202
57 2 1962 2 All ER 53 68
7SupCI71 290 It appears that in view of this difference of opinion a meeting of representatives of the parties was held on July 23 1946 the minutes of which as recorded by the Assam Controller USASS read as follows 2 a The vehicles and trailers sold to Messrs Allen Berry and Co Ltd are deemed to include all vehicles which were or should have been held in Moran Depot on the 10th July also those which have been issued on a Memorandum Receipt as follows  i To the Americans left behind by them in various camps and depots and not yet turned in by us
ii Vehicles issued on Memorandum Receipt to military units assisting the USASS Organisation
iii Any surplus vehicles originally allotted to USASS Units for operational purposes and now no longer required by them
 On September 17 1946 a secraphone message was sent from New Delhi to Calcutta which stated We have sold US Army surplus vehicles presumed to be borne on Moran list that is those actually in Moran Vehicle Depot or those that were intended to be moved to that depot which was meant to be parking depot for surplus US vehicles in Assam area
 On September 26 1946 the Director General Disposals wrote to the company that The vehicles sold to you in Assam are those US Army surplus
vehicles actually in Moran Vehicle Depot or those that were intended to be moved to Moran Vehicle Depot
Any mobile engineering equipment such as mobile cranes tracked tractors are excluded from the sale to you
 On December 10 1946 the Controller issued a release order in respect of 1
All vehicles and trailers lying in Moran Depot on 10th July 1946 including all United States Army Surplus Stores excluding land and buildings lying within Moran Depot and transferred to the Government of India from the Government of the United States
Vehicles in operational use in Calcutta and Assam as and when no longer required by the USASS Organisation
 291 The question raised by counsel is that the umpire failed to consider all these documents while considering the scope and content of the contract of sale and relied on only sale note No 160 dated July 11 1946 that the contract was not contained in the said note 160 alone and that therefore he misconstrued the contract and that that misconstruction which is a point of law is apparent on the face of the award as it was made the very basis of the award
The first three issues raised by the umpire were 1 whether the appellant was entitled to prove that any vehicles stores etc
other than those mentioned in the sale notes were sold to it 2 whether the Government was bound by the clarifications representation explanations or assurances made or given by any officer or officers of the Department regarding the subjectmatter of the contracts of sale except those necessarily implicit in the sale notes and 3 whether the Government sold any vehicles except those lying in Moran Depot on July 11 1946 or those intended to be moved thereto
The dispute between the parties thus clearly was that whereas the company claimed that the sale was of all vehicles borne on the records of Moran Depot irrespective of whether they were actually lying there on July 11 1946 or not the Government claimed that the company was entitled to those actually lying in the Depot
According to the respondents the contract of sale was to be found in the sale note and therefore any subsequent explanations or assurances given by any officer or officers of the Department could not vary or alter the terms of the contract
These expanations and assurances were given only to remove the misunderstanding of the company over the question of the scope and extent of the sale made to it
The umpire set out part of the sale notes 160 and 197 in the award and then observed the language used in these sale letters is to my mind perfectly clear explicit and unambiguous and excludes the possibility of any vehicles trailers or stores lying on the dates in question outside the locations specified in the sale letters having been included in the two sales
The contention that they in fact include all vehicular stores in Assam in one case and in Bengal area in the other has been made in all seriousness and a good deal 292 of evidence both oral and documentary has been produced in support of or against such contention
The point has also been argued at great length by learned counsel for the parties
I have given the whole matter my most serious and earnest consideration and my view is that apart from the language of the two saledeeds  being against such a contention the evidence too considered as a whole does not support it
Accordingly I hold that the stores sold to the claimants in the case of Assam were those actually located in Moran Depot on July 101946 and in the case of Bengal those actually located in Jodhpur and other depots specified in the sale letter on July 31 1946 He next held  The alleged clarifications or representations made or explantions or assurances given by any officer or officers of the Disposals Department either verbally or in writing have been very carefully examined by me and I am of opinion that neither are they considered as whole capable of the interpretation sought to be put upon them by the claimants nor are the respondents bound by them
They are not in accordance with law and do not amount to legal contracts binding the respondents
 These passages clearly show that the umpire had considered besides the sale notes the oral and documentary evidence led by the parties as also the contentions urged on and as regards them by counsel for the company
It is impossible therefore to uphold the contention that the various documents ie the letter of the company dated July 10 1946 the subsequent correspondence minutes of the meetings which too place after the salenote 160 was issued etc were not taken into consideration by the umpire while coming to his conclusion as to what actually was sold to the company
The dispute amongst other disputes referred to the umpire and crystallized by him in the form of issues on the pleadings of the parties involved as already stated the question first as to what was sold and secondly arising out of that the question whether besides the said sale notes 160 and 197 the subsequent clarifications or explanations were binding on the Government
These were no doubt questions partly of fact and partly of law
But questions both of fact and law were referred to the umpire and prima facie his findings on them would bind the parties unless as explained earlier the umpire has laid down any legal proposition such as a construction which is made the basis of the award and is on the face of the award an error
293 The point is is this such a case  True it is that this is not a case where a question of law is specifically referred to
It is clearly a case falling in the category of cases like Kalanton vs Du Development Co Ltd 1 wherein deciding the questions referred to him the umpire has to decide a point of law
In doing so the umpire no doubt laid down the legal propsition that the clarifications or assurances given subsequent to the dates of the said sale notes by an officer or officers of the department were not binding on the respondents nor could they affect the scope of the sales
That answer the umpire was entitled to give
But the fact that he answered a legal point does not mean that he has incorporated into the award or made part of the award a document or documents the construction of which right or wrong is the basis of the award
The error if any in such a case cannot be said to be an error apparent on the face of the award entitling the court to consider the various documents placed in evidence before the umpire but not incorporated in the award so as to form part of it and then to make a search if they have been misconstrued by him
This in our understanding is the correct principle emerging from the decisions which counsel placed before us
In any event this is not a case where the umpire in the words of Lord Dunedin tied himself down to a legal proposition which on the face of the award was unsound
The award makes it clear in so many words that he took into
account the entire evidence including the documents relied on by counsel and then only came to the conclusion that it did not assist the company in its contention as to the scope of the sales
Contentions 1 and 2 raised by Mr Agarwal therefore cannot be upheld
Contention No 3 relates to 547 vehicles said  to have been sold to the company under sale note 197 dated August 26 1946
There is no dispute that out of these vehicles the company removed 291 vehicles alleging that the delivery of the balance of 256 vehicles was withheld
The company made a claim being claim No VI for the price of these 256 undelivered vehicles
The respondents contention was that the sale to the company was confined only to the USA Surplus Stores that these vehicles did not fall within that category but were Reverse Land Lease vehicles belonging to the Government of India under an agreement between the USA and India
On these allegations the respondents laid counter claim No VI claiming the price of the 291 vehicles admittedly removed by the company when they were lying in Jodhpur Depot Calcutta
The umpire found that the expression Reverse Land Lease related to the reciprocal aid articles referred to in the said agreement
A reciprocal aid article according to that agreement 1 294 meant an article transferred by the India Government to the US Government under reciprocal aid under para 4 C of that agreement 
The USA Government was deemed to have acquired as on September 2 1945 full title over such articles except that such reciprocal aid articles incorporated into installations in India were deemed to have been returned to India Government from the date when the USA forces relinquished possession of such installations
From the inventories produced before him the umpire held that these 547 vehicles were incorporated into installations in India and therefore ownership in them vested in India Government on and after the USA forces relinquished possession of those installations
They could not therefore be regarded is US Surplus Stores which alone were and could be the subject matter of sale note 197
Consequently the company was not entitled to remove the said 291 vehicles which it did much less could the company claim compensation for 256 vehicles which it alleged were not delivered to it
In the result the umpire allowed the Government s counter claim No VI which was for the price of 291 vehicles unauthorisedly removed by the company from Jodhpur Depot
The argument in connection with this part of the award was firstly that the findings of the umpire were vitiated as there was total lack of evidence on which they could be based and secondly that in any event the umpire had no jurisdiction to award compensation to the Government in respect of counterclaim No VI
The first part of the argument need not detain us as the finding that these vehicles formed part of reciprocal aid articles the ownership in which vested in the Government of India and were therefore not USASS was based on the agreement between the two Governments and the inventories produced before the umpire from which he could hold that they belonged to the Government of India from the date when the installations in which they were incorporated were relinquished by the US forces and that therefore they could not form the subject matter of sale note 197 which related only to the US Surplus St ores
The second part of the argument however requires conside ration
The question is whether the arbitration clause included
a dispute relating to compensation in respect of the said 291 vehicles unauthorisedly removed by the company
Cl 13 of the General Conditions of Contract quoted earlier provides for reference to arbitration of all questions or disputes arising under these conditions or in connection with this contract
Dr Singhvi referred us to cl 10 of these Conditions also but it is clear that it can in no sense apply to the dispute relating to compensation
But the words arising under these conditions  295 and in connection
with this contract are undoubtedly wide and comprehensive
it is nonetheless a question whether the dispute as to compensation on the ground of unauthorised appropriation of these vehicles by the company falls within cl 13
In Vidya Sagar Joshi vs Surinder Nath Gautam1 the words expenditure in connection with election used in section 77 of the Representation of the People Act 1951 were construed to mean having to do with
An arbitration clause wherein the words in relation to or in connection with the contract were construed not to contemplate a dispute raised by a contractor that he could avoid the contract on the ground that it was obtained by a fradulent misrepresentation
see Monro vs Bognor Urban District Coun cil2
But a claim for damages on the ground of negligence on
the part of the defendant in re moving the plaintiff s furniture against a clause for due diligence in removing it was held to fall within the arbitration clause
Woolf vs Collis Remo val Service 3 Counsel conceded that a dispute as to the interpretation of sale note 197 would fall under the arbitration clause
If that is so it must follow that the umpire was competent to decide whether the said 547 vehicles fell within the purview of the sale note or not
If in determining that question he came to the conclusion that they did not the obvious conclusion would be that the company was not entitled to take away 291 vehicles admittedly removed by it from the Depot
If the company did that would the question as to the return or of compensation in lieu of such vehicles to which it was not entitled under the sale be a question which arises out of or in connection with the contract  Counsel went as far as to say that the umpire in deciding the company s claim No VI and the Government s counter claim No VI could decide that the company was not entitled to those vehicles but could not take the next step either to direct the return of them or payment of compensation in lieu of those vehicles
In our view such an argument cannot be accepted
The reason is that once it is found that he was competent to decide the dispute as to whether the said 547 vehicles were not the subject matter of the sale and 291 of them were removed unauthorisedly he must to do justice between the parties in respect of disputes referred to him order the company either to return them or to pay compensation for them
Since the first course was not possible after all these years the second was the only and the obvious course
The dispute raised by the respondents that 291 vehicles were not included in the sale was co extensive with and connected with the dispute that the com 1  3 19472AllER260
2 1915 3 KB167
296 pany was bound to return them if it was found that they were not covered by the sale
On this reasoning it is not possible to say that the umpire went beyond his jurisdiction either in rejecting the company s claim No VI or in accepting the corresponding counter claim No VI of the respondents
Contention 4 relates to 600 vehicles which had been taken out of Moran Depot for operational purposes but which the company claimed were part of the sale under sale note 160
The umpire held I that those vehicles having been taken out of the Depot for operational purposes did not fall within the sale and 2 in the alternative that the evidence disclosed that a substantial number of vehicles in operational use were delivered to the company even though strictly speaking it was not entitled to them as they were not lying in the Depot on
July 10 1946
The umpire further held that if some of them per chance were not handed over the respondents had sufficiently compensated the company by handing over several non operational vehicles from outside the depot to which the company was not entitled
Counsel argued that this part of the award was vague and without any evidence to support it and therefore the umpire behaved in this respect more like aconcilliator than as an arbitrator
Having held that sale note 160 covered only those vehicles which were actually lying in Moran Depot on July 10 1946 it was not incumbent on the umpire to decide the number of operational vehicles outside the depot
Consequently if he was satisfied that even though the company was not entitled to the said 600 vehicles claimed by it yet the authorities had delivered a substantial number of them and for any deficiency had also delivered non operational vehicles there would be no purpose in going into the details of vehicles delivered to the company
Even though as the judgment of the Trial Court discloses para 223 there was evidence both oral and documentary that the company had collected a number of vehicles lying at places outside the Depot and the vehicles so collected were recorded by the company yet the company had withheld the production of those records
In view of these facts it is impossible to say that the umpire had acted without evidence or that he behaved in the manner of a conciliator or gave findings on conjectures and surmises
Our interference was invited next on the question of ground rent on the ground that the amount of such rent was fixed by the umpire without any evidence
There is hardly any substance in this contention
The sites on which the various depots were situated were requisitioned by the Government under the 297 Defence of India Rules
The Government had a statutory obligation therefore to pay to the owners of those sites compensation as provided by those Rules
Under the contracts of sale the company was bound to pay to the Government ground rent and other charges which the Government in its turn was liable to pay
It is therefore not correct to say that the umpire could award only that amount which the Government had actually paid and that the umpire should therefore have taken an account from the Government
It was never the case of the company that the Government had claimed ground rent higher than the compensation it was liable to pay
The last objection was that the amount of costs awarded by the umpire to the respondents was disproportionate
It appears from the award that the umpire fixed the amount of costs after considering the statements of expenses incurred by the parties for the hearing before him tendered by the respective counsel for the parties
Considering the huge amounts claimed by the parties the volume of evidence both oral and documentary adduced by them the number of days occupied in recording that evidence and in arguing the case we are not prepared to say that the discretion which the umpire
exercised in the matter of costs was exercised in breach of any legal provision or unreasonably which can justify the Court s intervention
In our view none of the six contentions urged by counsel can be upheld
The result is that the appeal fails and is dismissed with costs
VPS Appeal dismissed


Summary:
The Director General of Disposals through correspondence and sale notes sold to the appellant company United States surplus was materials consisting of vehicles and other stores
Disputes having arisen between the parties both as regards the contents of and the quantity of the vehicles deliverable under the contracts they were referred to arbitration as per cl 13 of the general conditions of the contract between the parties
The disputes consisted of claims and counter claims and the umpire after deducting the amount of one claim allowed to the appellant held that the appellant was liable to pay to the respondent Rs 347022650 and costs amounting to Rs 54054400
The award was filed in the District Judge s Court and the appellant applied for having it set aside on various grounds
The Court held that with respect to certain matters claimed by the respondent the umpire had no jurisdiction and remitted the award for reconsideration of those items and also for readjustment of the amount of costs
The High Court confirmed the judgment of the District Judge
In appeal to this Court it was contended that the award was liable to be set aside because  1 the contracts of sale were misconstrued and the error appeared on the face of the award 2 several documents bearing on the scope of the sales were not considered 3 the umpire went beyond his jurisdiction when he awarded compensation to the respondent because the appellant removed certain vehicles 4 that the umpire acted as a conciliator deciding matters on conjecture 5 that the umpire fixed ground rent payable by the appellants without any evidence and 6 that the costs awarded were totally disproportionate
HELD  1 When parties choose their own arbitrator to be the judge in the dispute between them they cannot when the award is good on the face of it object to the decision either upon the law or the facts
Therefore even when an arbitrator commits a mistake either in law or in fact in determining the matters referred to him
but such mistake does not appear on the face of the award or in a document appended to or incorporated in it so as to form part of it the award will neither be remitted nor set aside
Whether the contract or a clause of it is incorporated in award is a question of construction of the award
The test is did the arbitrator corn  to a finding on the wording of the contract
If be did he can be said to have impliedly incorporated the contract or the relevant clause but a mere general reference to the contract in the award is not to be held as incorporating it
288 F H 289 A Union of India vs Bungo Steel Furniture Pvt Ltd   followed
283 Champsey Bhara  Co vs Jivraj Balloo Spinning  Weaving Co Ltd  applied
Kelanton vs Duff Development Co 1923 A   395 and Giacomo Costa Fu Andrea vs British Italian Trading Co Ltd  62
referred to
2a The dispute in the present case being as to what was sold and as to whether besides the sale notes the subsequent clarifications or
explanations given by various officers of the respondent formed part of the contract and were binding on the respondent and both the questions having been referred to arbitration the umpires findings on them would bind the parties unless he laid down any legal proposition such as a construction which is made the basis of the award and is on the face of the award erroneous
The award showed that the umpire had considered besides the sale notes the oral and documentary evidence led by the parties as also the contentions urged by counsel
It could not therefore be contended that the several documents were not taken into consideration by the umpire
291 E F 292 E H b The umpire laid down the legal proposition that the clarifications or assurances given subsequent to the dates of the sale notes were not binding on the respondent and could not affect the scope of the sales but the fact that he answered a legal point which he had to decide while deciding the questions referred to him did not mean that he incorporated into the award or made part of it a document or documents the construction of which was the basis of the award
If there was an error in such a case it could not be said to an error appearent on the face of the award entitling the court to consider the various documents placed before the umpire but not incorporated in the award so as to form part of it and then to make a search if they had been misconstrued by him
293 B E 3 Once it was found that it was competent for the umpire to decide that the appellant company was not entitled to keep certain vehicles which it had removed he must to do justice between the parties order the appellant either to return them or to pay compensation for them
Since the first course was not possible because of lapse of time the second was the only obvious course
Clause 13 of the general conditions provides for reference to arbitration of all questions or disputes arising under these conditions or in connection with this co tract and these words are wide and comprehensive
Therefore the umpire did not go beyond his jurisdiction in accepting the respondent s counter claim for compensation
295 D E 4 Merely because the umpire held that even though the appellant was not entitled to some vehicles claimed by it yet the authorities had delivered a substantial number of them
without going into details it could not be said that he bad acted without evidence or that he behaved in the matter as a conciliator or gave findings on conjuncture and surmises especially when the appellant withheld relevant evidence which was in its possession
296 E F 5 Under the contracts of the sale
the appellant was bound to pay to the respondent ground rent and other charges which the respondent in its turn was liable to pay the owners and since it was not the appellant s case that the respondent had claimed a higher amount there was no sub stance in the contention that the arbitrator fixed the ground rent without any evidence
297 A C 284 6 Considering the huge amounts claimed by the parties the volume of evidence adduced and the number of days occupied in recording that evidence and in arguing the case it could not be said that the discretion of the umpire exercised in the matter of costs was exercised in breach of any legal provision or unreasonably
297 C D