Summary
The Court upheld the arbitrator’s awards for extended-period escalation and idling charges under the 1940 Act. The contract construction was supported by correspondence and conduct, and contributory delay had been considered. It restored interest entitlement from the written demand, modifying the rate and specifying the periods payable.
Issues
- Whether the escalation ceiling barred extended-period claims and contributory delay invalidated idling compensation.
- Whether interest could precede quantification of damages and from what date.
Provisions considered
- Section 29 and arbitral review principles, Arbitration Act, 1940The High Court wrongly treated the provision as excluding pre-reference and pendente lite interest; supported contract interpretation and damages assessment did not warrant merits interference. (¶ 12–20)
- Section 3(1)(b), Interest Act, 1978Absent a contractual bar, interest on damages could run from the date specified in a written interest demand; the relevant notice here was 20 April 1987. (¶ 21–24)
Held
- The arbitrator reasonably construed the escalation ceiling as governing the scheduled term, not the extended performance allowed without objection after the claimant’s notice. Courts could not substitute their contract construction within the limited review available. (¶ 10–16)
- Additional work required separate mobilisation. The arbitrator expressly considered the claimant’s contribution to delay when assessing compensation; that circumstance therefore did not invalidate the idling award. (¶ 17–18)
- The contract contained no interest prohibition. Written notice supported pre-reference interest notwithstanding later quantification of damages, but the award’s earlier starting date and rate were modified. (¶ 19–24)
Result
Board’s appeal dismissed; claimant’s appeal allowed in the stated terms. Interest fixed at 12% annually from 20 April 1987 to 31 December 1997 and from the trial-court decree until payment or realization. No costs.