Read Contracts Carefully
Perspective on Construction Contracts in India
Construction Week Online India
May 3, 2011
This month, the Supreme Court of India ruled on a motion to set aside an arbitration decision. In arbitration, the Wig Brothers were successful and the ONGC’s counterclaims were dismissed in a dispute over the 1983 construction project for a hospital. ONGC challenged the arbitrator’s award in District Court, the Uttarakhand High Court, and ultimately the Supreme Court under Section 30 of the 1940 Arbitration Act.
The grounds are very limited to appeal an arbitration decision and here the ONGC alleged that the arbitrator misconducted himself when he issued an extension of time. “The salient lesson for arbitrators from this decision is to read contracts carefully as the arbitrator’s jurisdiction is a creature of the contract between the parties, and his authority and discretion in formulating an award are bound by the terms of the contract.”
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