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The learned Advocate General in this regard has referred to and relied upon the decisions of the Hon'ble Supreme Court in Bharat Coking Coal Ltd. vs. L.K. Ahuja reported at (2004) 5 SCC 109 Para 11 and State of Rajasthan & Anr. Vs. Ferro Concrete Construction Pvt. Ltd. reported at (2009) 12 SCC

1. It is submitted that the arbitrator has not given any reason for arriving at his finding that loss of business due to irregular payment/cash flow would be 10% of value of work done beyond the contractual period and in the absence of reasons being assigned by the Arbitrator for arriving at the aforesaid finding the award under this head of claim is liable to be set aside. It is submitted that by a long catena of decisions including the decisions of the Hon'ble Supreme Court in Mcdermott International Inc. Vs. Burn Standard Co. Ltd. reported at (2006) 11 SCC Pg 181 at 208, Paragraphs 55-57 and Som Datt Builders Ltd. Vs. State of Kerala reported at (2009) 10 SCC 259 it has been categorically stated that the arbitrator is required to give proper and adequate reasons for arriving at the conclusion and such reasons shall not only be intelligible but shall be a reason connected with the case which the Court can see is proper. The learned Advocate General has laid much emphasis in Paragraph 55 to 57 of Mcdermott International Inc. (supra) in support of the aforesaid submission which reads:-

"Neither any application has been made before expiry of the contract nor the respondent extended the time in terms of the provisions of the contract. Therefore, as I have already submitted that after stipulated date of expiry of the contract, i.e. 1st December, 2003 clauses of the contract became otiose and enforceable against either of the parties to the contract."

That apart, notice of loss had been given by the claimant by the letter dated 22nd December, 2003. It is the respondent who had requested the claimant to commence work after 1st December, 2003. The learned Counsel has referred to the letters dated 19th December, 2003, 11th February, 2004 and 5th March, 2004. The non-applicability of Section 55 of the Contract Act would further be apparent from the judgment of the Apex Court in McDermott International (supra) where it was clearly held that in cases of this nature, it is the second proviso of section 55 of the Contract Act which applies, namely, that if there is a breach damages must follow. In any event, any argument on the basis of Section 55 of the Contract Act cannot be raised at this stage. The same not having been raised before the Arbitral Tribunal and not being one of the grounds mentioned in Section 34 of the Arbitration and Conciliation Act, 1996. In this regard reference was made to a Division Bench Judgment State of State of West Bengal Vs. Usha Ranjan Sarkar reported at 2013 (3) CHN 512.

The Supreme Court in McDermott International (supra) has commented on the scope of the powers of the arbitrator to interpret terms of the contract, and the permissible interference by the courts on the assessment of the arbitrator. It was held:-

" It is trite that the terms of the contract can be express or implied. The conduct of the parties would also be a relevant factor in the matter of construction of a contract. The construction of the contract agreement, is within the jurisdiction of the arbitrators having regard to the wide nature, scope and ambit of the arbitration agreement and they cannot, be said to have misdirected themselves in passing the award by taking into consideration the conduct of the parties. It is also trite that correspondences exchanged by the parties are required to be taken into consideration for the purpose of construction of a contract. Interpretation of a contract is a matter for the arbitrator to determine, even if it gives rise to determination of a question of law. The 1996 Act makes the provision for the supervisory role of courts, for the review of the arbitral award only to ensure fairness. Intervention of the Court is envisaged in few circumstances only, like, in case of fraud or bias by the arbitrator, violation of natural justice, etc. The court cannot correct the errors of the arbitrators. It can only quash the award leaving the parties free to begin the arbitration again if it is desired. So, the scheme of the provision aims at keeping the supervisory role of the court at minimum level and this can be justified as parties to the agreement make a conscious decision to exclude the court's jurisdiction by opting for arbitration as they prefer the expediency and finality offered by it."

There cannot be dispute that there has been prolongation of the work beyond original contractual stipulated period. The delay in releasing payment against RA Bills is more than evident. The numerous requests by the claimant for release of the fund in order to complete the project within the stipulated time are on record. It cannot be said that time was essence of the contract as the contract contains clauses for extension of time and payment of compensation which are indicative of the fact that the time was not the essence of the contract and, thus, damages for delay are permissible in law. The question whether or not the time was of the essence of the contract would essentially be a question of the intention of the parties to be gathered from the terms of the contract and the correspondence exchanged by and between the parties. The Arbitrator is the sole Judge and Authority to arrive at a finding on the basis of the construction of the clause and on scrutiny of the correspondence between the parties. In the assessment of damages, the Court must consider only strict legal obligations and not the expectations, however reasonable, of one contractor that the other will do something that he has assumed no legal obligation to do. In McDermott (supra), the Hon'ble Supreme Court considered Sections 55 and 73 of the Indian Contract Act and observed:-