ALLEN BERRY & CO. (P) LTD. versus UNION OF INDIA, NEW DELHI.

Citation: [1971] 3 S.C.R. 282 · Decided: 05-01-1971 · Supreme Court of India · Bench: J.M. SHELAT · Disposal: Dismissed

Cited by 5 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

282 
ALLEN BERRY & CO. (P) LTD. 
V. 
UNION OF INDIA, NEW DELHI. 
January 5, 1971 
(J. M. SHELAT,. C. A. VAIDIALINGAM AND P. JAGANMOHAN 
REDDY, JJ.J 
Arbitration Act ( 10 of 1940), s. 30-Setting aside 
award---Error 
apparent on the face of·award-What is. 
The Director General of Disposals, through corr~spo<dence 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 di 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, he'd that the 
appellant was liable to pay to the respondent Rs. 34,70,226.50 and costs 
amounting to Rs. 5,40,544,00. 
The award was filed in the District Judi:e's Court and the appellant 
applied for having it set aside on various grounds. The Court held that 
with respeCit to certain matters claimed by the respondent the umpire had 
no jurisdiction 
and 
remei_tted 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 m~con.strued 
and the error appeared on the face of the award; (2) several documents 
bearing oo the scope of the sales were not considered; ( 3) the -umpire 
went beyond his jurisdiction when he awarded compensation to the res-
pondent because the appellant removed certain vehicles; ( 4) that 
the 
umpire act'd as a conciliator deciding matters on conjecture; (5) that 
the umpire fixed ground rent payable 
by the aooella"ts without 
any 
evidence; and (6) that the costs awarded were totally disproportionate. 
HELD : (I) When parties choose their own arbitrator to be the judge 
in the dispute between them, they caonot, when the award is good on the 
face of it, object to the d'!cision either upon the Jaw or th~ facts, There-
fore even when an arbitrator commits a mistake either in Jaw or in fact 
in determining the matters referred to him .. but such mistake docs not 
appear on the face of the award or !" a document ~ope~ded to or in.cor-
porated in it so as to form part of it, the award wL11. n~tt~er· be rem1tt~d 
nor s:t aside. 
Whether the contract or a clause of 1t 1s incorporated in 
award is a question of construction of the award. 
The test is, did t~e 
arbitrator come to a finding on the wording of the co"tract. If he did, 
he caq be flaid to have impliedly incorporated the contract or the r"levant 
claus~. hut 9. m~re general reference to the contract in the award is not 
to be held as incof!'orating it. [288 F-H; 289 Al 
Union of India v. Bungo Steel Furniture Pvt. Ltd. [1967] I S.C.R. 324, 
folhxod. 
A 
B 
c 
D 
E 
F 
• 
G 
H 
• 
' 
A 
B 
c 
D 
F 
ALLEN BERRY & CO, V. UNION 
2 s :i 
Champsey Bhara & Co. v. Jivraj Ba/loo Spinning & Weavi~g Co. Ltd. 
[1923] A.C. 480, applied, 
Kelanton \:'. Duff .Develop1nent Co. [1923] A.C.. 
395 
and 
Giaco1110 
Costa Fu Andrea v. British [ta1ian Trading Co, Ltd. 
[1962] 2 All E.R. 
53, 62, referred to, 
2(a) The dispute in the present case being as to what was sold and 
as to whether besides the sale-notes, the subsequent clarifications or ex-
planations given by various officers of the respondent formed part of the 
co~tract and were binding on 
the respondent, and both the 
questions 
having been referred to arbitration, the umpire's 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 erron~us. The award showed that the umpire had consic!•"ed 
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; 29'2 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 conld not affect the scop~ of the sales; 
but !he fact that he answered ~ legal point, which he hao to decide 

Excerpt shown. Read the full judgment & AI analysis in Lexace.