Plausible Interpretation of Contractual Terms by Arbitrator Precludes Judicial Interference Under Section 30

The Union of India (Appellant) issued tenders for security fencing along the Indo-Pak border in 1991-92.

The respondent-contractor claimed additional costs for constructing struts on both sides of the fencing and for supplying M.S. Flats.

A sole arbitrator, Shri S.S. Juneja, allowed these claims and awarded 14% interest.

The appellant filed objections under Section 30 of the Arbitration Act, 1940, along with an application to condone a 117-day delay.

The District Judge, Sri Ganganagar, dismissed the limitation application and rejected the objections on merits by orders dated 09.09.2005.

The appellant challenged these orders before the High Court under Section 39 of the Act.

1. Whether the administrative delay of 117 days in filing objections, attributed to government elections and sanction processes, constitutes "sufficient cause" for condonation under Section 5 of the Limitation Act.

2. Whether the term "either side" in the contract regarding M.S. Angle Iron Struts must be interpreted as "both sides," and if the arbitrator’s interpretation to the contrary constitutes misconduct.

3. Whether the arbitrator misconducted the proceedings by awarding costs for M.S. Flats despite the appellant’s claim that they were to be provided by the contractor.

Section 30 of the Arbitration Act, 1940, which limits the grounds for setting aside an award to the arbitrator’s misconduct or the award being improperly procured.

Bhagawati Oxygen Limited v. Hindustan Copper Limited (2005), establishing that courts cannot re-appreciate evidence or interfere just because an alternative view is possible.

Section 29 of the Arbitration Act, 1940, regarding the power to award interest.

The "sufficient cause" standard under Section 5 of the Limitation Act, 1963, noting that government entities enjoy no "special latitude" regarding delays.

The Court found that "either" is linguistically ambiguous, meaning "one of two" or "each of two" depending on context; since the arbitrator adopted a plausible interpretation (one side), it did not constitute misconduct.

On Claim No. 2, the original contract explicitly stated M.S. Flats would be supplied by the department free of cost, and subsequent negotiations only modified the supply of M.S. Spikes, not Flats.

Regarding limitation, the Court held that a 117-day delay due to "change of government" or "administrative sanctions" without specific chronological details fails the rigor of explanation required in arbitration matters.

The Court concluded that the arbitrator acted within jurisdiction and the findings were supported by the record.

The Court held that (i) administrative delays do not per se constitute sufficient cause for condonation; (ii) the arbitrator’s interpretation of ambiguous contractual terms is final if plausible; and (iii) the arbitrator has ample power under Section 29 to award interest.

The records were ordered to be sent back forthwith.