1 arbp318-08 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ARBITRATION PETITION NO.318 OF 2008 Airports Authority of India ....Petitioner V/s. M/s.Fine Art ....Respondent Ms.Pooja Patil i/b M/s.Rajesh Kothari & Co. for the Petitioner. Ms.Shilpa Kapil for the Respondent. CORAM : S.J. VAZIFDAR, J. DATE : 4TH OCTOBER, 2010. P.C. :- 1. The petition has been filed under section 34 of the Arbitration and Conciliation Act, 1996 for setting aside an award dated 31.12.2007 made by the sole arbitrator. With the consent of the parties, the petition is admitted and heard finally. 2. The parties had entered into a contract for the work of special requirements/renovation of the existing flooring at one of the terminals of the international airport in Mumbai. 3. The work order is dated 29.4.2004.The work order provides that the date of commencement of the work be reckoned from the tenth day after the issue of the letter. Admittedly the petitioner terminated the contract even before the work commenced. The petitioner after the work order was issued directed the respondent to carry out the work at a different location which the respondent did not agree to. In these 2 arbp318-08 circumstances, the learned arbitrator awarded an amount of Rs.5,50,000/- towards the loss of profit. This part of the award is challenged on the ground that under clause 13 of the contract, such a claim is barred. The relevant part of clause 13 relied upon on behalf of the petitioner reads as under :- “CLAUSE 13. If at any time after the commencement of the work the Chairman, Airports Authority India shall for any reason whatsoever not require the whole thereof as specified in the tender to be carried out, the Engineer-in- Charge shall give notice in writing of the fact to the contractor who all have no claim to any payment of compensation whatsoever on account of any profit or advantage which he might have derived from the execution of the work in full, but which he did not derive in consequence of the full amount of the work not having been carried out neither shall have any claim or compensation by reason of any alterations having been made in the original specifications, drawings, designs and instructions which shall involve any curtailment of the work as originally contemplated.” 4. The learned arbitrator construed this clause. He came to a conclusion that the clause would not apply in the present case as the work had not even commenced. According to him, clause 13 applies to situations which may arise after the commencement of the work. This is a possible construction of the contract. Thus even assuming that the construction placed on clause 13 on behalf of the petitioner is correct the view of the arbitrator being a possible one, the award cannot be set-aside. 5. The grievance that the arbitrator did not consider the terms of the contract while construing clause 13 and especially clause 2 which contains a deemed date for commencement of the work is not justified. The point was not argued before the arbitrator. It is not specified in the grounds in the petition for challenging the award. 3 arbp318-08 6. The petitioner has also challenged the award of interest. This contention is based on clause 25 which inter-alia provides : “On dispute (disputed) claims no interest would be payable”. 7. In view of the judgment of the Supreme Court in Sayeed Ahmed & Co. v. State of Uttar Pradesh & Ors., (2009) 12 SCC 26, the claim for interest was clearly barred. The arbitrator has held “ though as per the respondent (petitioner herein), under the contract no interest is payable, I do not agree with this contention of the respondent. I feel that the claimants (petitioners) are entitled to interest on the award amount ....................”. This the arbitrator was not entitled to do. He clearly ignored the clause. The award in so far as it pertains to the grant of interest upto the date of the award is therefore unsustainable and is liable to be set-aside. 8. In the circumstances, the award is set-aside partially to the extent that the interest has been awarded upto the date of the award. The rest of the award including the grant of interest from the date of the award till payment is upheld. 9. The arbitration petition is accordingly disposed of with no order as to costs.