Any Award passed by Arbitrator in violation of the bar contained in the Contract is bad.

In a contract where time is the essence, the promisee if due to reasons of negligence or delay on the part of promisor fails to deliver and suffers losses, is entitled to make good losses suffered provided the promisee

Shimla High Court declined to interfere in the findings recorded by Arbitrator on the ground that when promisee itself has chosen to not to question terms affecting its rights as performed under the contract, it cannot later blame the promisor as cause for its non-performance amounting to suffer losses.

In a contract where time is the essence, the promisee if due to reasons of negligence or delay on the part of promisor fails to deliver and suffers losses, is entitled to make good losses suffered provided the promisee:

•    Has repudiated the contract; or
•    Promisor has extended the time by entering into supplemental agreement; or
•    Promisor has provided for compensation for delay; or
•    Promisee has given notice for compensation for escalation of rates; or
•    Delay is caused by the Promisor, who accepted the performance by the Promisee despite delay or price rise;

Keeping in view the above settled legal position, any award passed by Arbitrator in violation of the bar contained in the contract is bad or in other words, an award is liable to be set aside if it is erroneous on the face of it. It is always open to the Promisee to challenge or question contractual clause which is illegal and arbitrary. However, where Promisee chooses to remain silent is later on barred from making claims on the above grounds.

In view of the above legal principle Shimla High Court declined to interfere in the findings recorded by Arbitrator leading the dismissal of petition under Section 34 of the Arbitration and Conciliation Act, 1996.

Satish Kumar Vij vs. State of Himachal Pradesh and Anr.
[Himachal Pradesh HC, 12.08.2013]