Judgment This is an application for a declaration that the award dated 18th March, 1981 made by the Arbitrator, Sri Sanjib Kumar Dutt, was without jurisdiction, void and alternatively, the said award be set aside and further and consequential orders. In order to appreciate the application it would be necessary to refer to the facts. On or about 20th March, 1976, an agreement was entered into between the petitioner and the respondent. The said agreement, inter alia, contained the following terms:- "20. That all disputes and differences arising between the partners or between the surviving partners on the one hand and the heir theirs executor/executors or legal representative/legal representatives of the deceased partner on the other hand with regard to this partnership business and/or the terms of this deed shall be referred to a Board of Arbitration. The provisions of the Indian Arbitration Act or any statutory modifications thereof the then substituting shall apply." 2. It appears that disputes and differences arose between the parties and on 17th April, 1979, the respondent wrote a letter to the petitioner claiming certain sums of money and suggesting the name of a learned Advocate as Arbitrator and asking the petitioner to agree therein. As the petitioner did not do so, an application was made on the 29th May, 1979 under sections 8 and 9 of the Arbitration Act, 1940 by the respondent for appointment of an Arbitrator or Arbitrators to adjudicate upon the disputes. On or about 6th August, 1979 an order, by consent of the parties, was passed and Sri Sanjib Kumar Dutt, an Advocate of this Court, was appointed the Arbitrator on a remuneration of 30 GMs per sitting irrespective of hours of sitting payable by both parties equally, that is, 15 GMs each. The Arbitrator was directed to make and submit the award within 4 months from the date of entering into the reference and the parties were asked to act on the signed copy of the minutes. Thereafter, the petitioner made an application under section 33 of the Arbitration Act, 1940, which was dismissed. On the 20th July, 1980 the respondent made an application after several sittings had been held, viz. after 41 sittings, claiming that the arbitration proceedings had been protracted and lengthy and the authority of the Arbitrator be revoked. Thereafter, the petitioner made an application under section 33 of the Arbitration Act, 1940, which was dismissed. On the 20th July, 1980 the respondent made an application after several sittings had been held, viz. after 41 sittings, claiming that the arbitration proceedings had been protracted and lengthy and the authority of the Arbitrator be revoked. Order was passed on the said application on 2nd September, 1980 by the Court giving certain directions for filing of the documents and extending the time of the Arbitrator to make the award. It is not necessary to refer in detail to the said order. Thereafter the Arbitrator proceeded with the matter and made his award which is the subject-matter of challenge in this application. It may be mentioned that in the arbitration proceeding, the respondent had claimed an award for a sum of Rs.64,493.82. The Arbitrator by his award has awarded and inter alia directed the petitioner to pay to the respondent a sum of Rs.17,194/- as share of the profit in respect of the three tenders covered by the said agreement. He has further directed that an amount of Rs.20,000/-, as assessed cost of the arbitration, should be paid by the petitioner to the respondent. In this application made on the 10th June, 1981, the said award is under challenge. 3. The first ground upon which the said award is challenged is that the arbitration agreement did not provide for appointment of an Arbitrator, by consent of the parties, and in view of absence of such a provision in the arbitration clause, it was contended, the Court had no jurisdiction under sections 8 and 9 or any other provisions of the Arbitration Act to appoint an Arbitrator and make a Reference. It was submitted that the orders passed by this Court in the proceedings taken in the Court and in the proceedings before the Arbitrator were all void and without jurisdiction and the consent of the petitioner, as such, in making the appointment as well as in participating in the arbitration proceedings would be of no avail. In aid of this submission, reliance was placed on the decision of Division Bench of this Court in the case of (1) Sunil Mukherjee v. Union of India, AIR 1978 Ca1 37. In aid of this submission, reliance was placed on the decision of Division Bench of this Court in the case of (1) Sunil Mukherjee v. Union of India, AIR 1978 Ca1 37. There, the arbitration agreement between the contractor A and the railway for the purpose of appointing two arbitrators to whom the disputes were to be referred the railway was to send a panel of more than three names of railway officers to A and out of the said panel A would suggest a panel of three names out of which the General Manager would appoint one arbitrator as A's nominee and then only the General Manager would appoint a second arbitrator of equal status as the railways nominees without A's consent of any kind. When dispute arose between the parties A called upon the railway to appoint the arbitrators in terms of the agreement for adjudication of the dispute and ultimately on A's application under section 8 of the Arbitration Act, the High Court appointed two arbitrators and directed a reference. It was held by the Division Bench of this Court that section 8 was only applicable in case where the arbitration agreement provided for a reference to two arbitrators to be appointed by the consent of the parties. It could not be said that under the arbitration agreement in question the arbitrators were to be appointed with the consent of the parties and therefore neither section 8 nor any other provision of the Act was applicable. The application under section 8 could not be entertained and the order of the Court appointing the arbitrators and directing the reference under section 8 was therefore held to be without jurisdiction and was a nullity and void and the award made by the arbitrators was held to be without jurisdiction and nullity. It was further observed that the Court had no inherent jurisdiction to appoint arbitrators as its power was regulated by the statute. The fact that A himself had made an application under section 8 and had participated in the arbitration proceedings could not estop him from raising the question, it was held, of want of jurisdiction in the Court under section 8 and could not confer jurisdiction on the Court when it did not possess it. The fact that A himself had made an application under section 8 and had participated in the arbitration proceedings could not estop him from raising the question, it was held, of want of jurisdiction in the Court under section 8 and could not confer jurisdiction on the Court when it did not possess it. It appears to me that the ratio of the principle of the said decision would have no application to the facts and circumstances of this case. In this case I have set out hereinbefore the arbitration clause and read in a reasonable and proper manner, in my opinion, it could be inferred that the parties intended that the reference would be by the Board of Arbitration and if agreed between the parties the Board might be consisting of a single member or more than one members. The provision of the Indian Arbitration Act would apply, only indicated that thereafter the provisions of the Indian Arbitration Act would govern. This is a reasonable and probable construction. This construction is also borne out by the subsequent conduct of the parties in the participation of the various proceedings as I have indicated hereinbefore. In that view of the matter, I am unable to accept the contention that the order appointing the arbitrator made by this Court was without jurisdiction though it was passed with the consent of the parties. The arbitration clause in this case read properly permitted the appointment of arbitrator by consent of the parties in the facts and circumstances of this case. In that view of the matter, the first contention urged in support bf this application must be rejected. 4. The second contention in support of this application was that while the claim of the respondent before the Arbitrator was Rs.64,493.82, the award had been made only for Rs.17,194/-, that is to say, about ¼th of the amount claimed, but the petitioner was made liable to pay the costs of Rs.20,000/- which practically covered the entire costs, charges and remuneration of the arbitrator that had to be borne by the respondent. The petitioner had over and above paid full share of the costs, charges and expenses of the arbitration proceedings including the remuneration of the arbitrator, his clerk and stenographer. The petitioner had over and above paid full share of the costs, charges and expenses of the arbitration proceedings including the remuneration of the arbitrator, his clerk and stenographer. Altogether, it was stated, 67 sittings were held and the petitioner's own share of the costs on account of the arbitration came to about Rs.21,105/- out of which Rs.17,015/- were costs of remuneration of the arbitrator, Rs.3,350/- being the petitioner's share of remuneration paid to the stenographer and Rs.670/- as the share of costs of the clerk. In those circumstances, the respondent's cost was also stated to be more or less the same. Quite apart from that, the petitioner had to incur heavy costs on his own account for the conduct of the arbitration proceedings before the arbitrator. It was, therefore, submitted that while the respondent had succeeded before the Arbitrator his claim was really slashed down to ¼th of his original claim. In those circumstances, to make the petitioner liable to bear the entire cost of the Arbitrator's remuneration that the respondent had to bear, would be a disproportionate amount of cost and would really amount to violating the principle of cost following the event which is the normal principle followed by the Courts of law in awarding costs. On the other hand, on behalf of the respondent it was submitted that the respondent had to incur nearly over Rs.42,000/- in the conduct of these arbitration proceedings out of which about Rs.21,150/- came to be the cost of the arbitrator, his stenographer and clerk which the respondent had to bear as his share of the arbitration proceedings. 5. Apart from that it was submitted that the respondent had to bear an equal amount or a little more for the conduct of the arbitration proceedings and also in making the various applications or contesting the various applications in these arbitration proceedings. Therefore it was submitted that, in order to recover a sum of Rs.17,000/- and odd the respondent has been out of pocket for nearly Rs.42,000/- and he has been only compensated to the extent of Rs.21,150/-. In those circumstances, it was submitted that the award of the costs was not disproportionate. Normally the practice which is followed is that the cost should follow the event, that is to say, the winning party should obtain the cost. In those circumstances, it was submitted that the award of the costs was not disproportionate. Normally the practice which is followed is that the cost should follow the event, that is to say, the winning party should obtain the cost. Broadly speaking, there has been no violation of that principle because the respondent has succeeded though not fully but partly in establishing his claim before the Arbitrator. Therefore, the respondent was entitled to certain costs but what was urged on behalf of the petitioner was that the respondent had only succeeded to the extent of ¼th but the cost of the arbitration that the respondent had obtained was the entire cost of the arbitration that the respondent had to bear. Therefore, this was disproportionate cost and had violated the principles of cost following the event. In this connection my attention was drawn to the observation of the Judicial Committee in the .case of (2) Mudhobun Doss. v. Gokul Doss, 10 Moore's Indian Appeals 563. There the plaintiff claimed as damages a larger sum than the Appellate Court's award. No cost was given on the appeal. It was held, following the practice of the Courts in India that as the plaintiff recovered a less amount than he laid in his plaint his costs in the Court below were to be apportioned to the amount recovered and not to the sum claimed. There at page 575 of the report the Judicial Committee observed as follows:- "Their Lordship have felt some difficulty about the costs of the Courts below, and those of this appeal. The costs of an action in India, particularly the stamp duties payable on the proceedings, depend a good deal on the value of the thing claimed. It is accordingly the practice of the Courts in India, when a plaintiff has recovered less than he has claimed, to apportion the costs in the proportion which the amount recovered bears to that which was claimed. In the present case there are strong indications of a bad feeling between the parties, which, if it prompted the original attachment, has probably on the other hand, induced the appellant to swell his demand beyond all reasonable bounds. The evidence affords no grounds for a claim for damages amounting to the appealable sum of Rs.10,000/-, and the amount actually recovered falls far short of that sum. The evidence affords no grounds for a claim for damages amounting to the appealable sum of Rs.10,000/-, and the amount actually recovered falls far short of that sum. Yet, unless the claim had been thus unduly magnified, the appellant could not have appealed to Her Majesty. In these circumstances, their Lordships think they must direct the costs below to be apportioned according to the ordinary course of the Courts below, and that they ought not to give to either party the costs of this appeal. In making the apportionment, the appellant will, of course, receive credit for any costs which he may have paid under the decrees reversed." In support of this principle my attention was also drawn to the observations of the learned single Judge of the Madras High Court in the case of (3) Batcha Rowther v. Alagappan Servai, AIR 1959 Mad. 12. There at page 14 of the report Ramaswami, J. observed as follows:- "No doubt awarding of costs is in the discretion of the trial court (S. 35, C.P.C.) but that should be exercised judiciously and on sound legal principles and not by chance nor by medley, nor by caprice nor in temper and this Court will interfere when it is found that it has been exercised arbitrarily and capriciously as here. Kameshwar Singh v. Nebilal Mistri, ILR 23 Pat. 927: AIR 1945 Pat. 184 (P), Ralliaram Dingra v. Governor General of India in Council, ILR (1944) 2 Cal. 487: AIR 1946 Cal. 249 (Q), Huxley v. West London Extension Rly. Co., (1866) 17 QBD 373 (R), Justin Hull v. Arthur Francis Paul, 24 CWN 352; AIR 1920 Cal. 1009 (S)." In my opinion, the aforesaid observation lays down the true principle and if I may add with respect, apart from being capricious by disregard all the well-settled principles of law there can also be arbitrary exercise by the arbitrator of his discretion in awarding the costs. The Supreme Court in the case of (4) S.P. Majoo v. Ganga Dhar, AIR 1969 SC 600 also observed to the same effect. There also Ramaswami, J. speaking for the Supreme Court observed that the plaintiff-respondent could be awarded cost proportionate to the success in the present suit as between Attorney and Client. He was not entitled to the costs he has incurred in the previous suit. 6. There also Ramaswami, J. speaking for the Supreme Court observed that the plaintiff-respondent could be awarded cost proportionate to the success in the present suit as between Attorney and Client. He was not entitled to the costs he has incurred in the previous suit. 6. But on behalf of the respondent it was emphasised that the real principle is that the costs should follow the event. It is pointed out on behalf of the respondent that in this case there was no infraction of that principle. Costs have followed the event in the sense that the costs have been awarded to the successful party. It was further submitted that it could not be said either way from the facts and materials that the jurisdiction or discretion of the Arbitrator had been improperly exercised. It was submitted that the costs should be proportionate, not to the proportionate costs of the amount awarded but proportionate costs of the amount incurred. Furthermore, it would depend upon the various other factors, namely, as to the view of the arbitrator as to who bad prolonged the arbitration proceedings. According to the respondent he had himself made an application for supersession of the arbitration agreement because of the delayed proceeding, and according to him for 7 days sittings to days were taken for argument on behalf of the petitioner. It was therefore submitted that while all these facts were not before the Court, in those circumstances, it was not possible to hold that the cost awarded in this case was disproportionate or heavy. In the premises, it was submitted that the discretion of the arbitrator could not be and should not be interfered with. 7. I must confess, in this case I have felt some anxiety as it is in the usual type of cases. Looked at from one point of view it does appear to me that the claimant, who had made a claim for about Rs.64,000/- and who had succeeded in getting about ¼th of its claim, should also succeed in obtaining or recovering the proportionate costs of the arbitration. Now on behalf of the respondent it was highlighted that in the decision before the Judicial Committee to which reference has been made hereinbefore, the proportionate cost was awarded because at that time cost included the proportionate stamp duty or ad valorem duty on the claim. Now on behalf of the respondent it was highlighted that in the decision before the Judicial Committee to which reference has been made hereinbefore, the proportionate cost was awarded because at that time cost included the proportionate stamp duty or ad valorem duty on the claim. Therefore, in order to compensate that the proportionate cost was awarded. In this case no such principle could be invoked. I am afraid that it could not be so because the ratio of that decision would be, whatever that the party had to incur for obtaining the adjudication apart from his own costs had to be properly adjudicated. In the Judicial Committee's case the parties had not to incur any other costs apart from the court-fees wherever was applicable but in respect of the proceedings before the arbitrator the normal practice is that parties are made to bear their own share of cost. If for a simple case of adjudicating the claim of Rs.17,000/- the respondent had to bear a larger amount, the petitioner should not be made responsible to bear the entire costs, namely, his own costs of the arbitrator's remuneration, clerk and stenographer as well as whatever the respondent had to bear for the arbitration proceedings. The question then arises in such circumstances what is to be done? 8. The cost is certainly a matter within the discretion of the arbitrator. It appears so from Clause (i) of the First Schedule of the Arbitration Act, 1940. Section 15, Clause (b) empowers the Court to modify or correct an award where, inter alia, the award was imperfect in form or contained an obvious error which could be amended without affecting such a decision. In this case, as I have mentioned hereinbefore, so far as the award of the claim is concerned it cannot be challenged. Whatever challenge has been made to the award I have rejected the same. So far as the challenge to the award of the of the cost is concerned, the question is whether there has been an improper exercise of the discretion by the Arbitrator in this case in awarding the entirety of the costs of the arbitrator, his clerk and stenographer to be borne by the petitioner while the respondent had only succeeded in obtaining ¼th of its claim. That is the first part of the question. That is the first part of the question. The second aspect of the matter is that even if there is an improper exercise of discretion, can it be said that such an improper exercise of discretion was an obvious error which could be amended without affecting such decision? 9. Now, violation of well-settled principles of judicial norms in awarding cost would be an improper exercise of the discretion of the Arbitrator. Specially the arbitrator had not indicated any reason for awarding the entirety of the costs while he was slashing the claim of the petitioner to the ¼th. The question, therefore, is if it is improper exercise, can such improper exercise be an obvious error? On this aspect some light may be obtained from the observations in the case of (5) Smeaton Hanscomb & Co. Ltd. v. Sasson I. Setty, Son & Co., (1953) 2 All ER 1588, where in a special case stated by the arbitrator for the consideration of the Court one paragraph of the award ran: "However the Court answers the three questions (of law) or any of them, I award and direct that......the sellers shall pay the costs of this my award which I assess at £75 17s." On considering the questions of law, the Court decided that the buyers were not entitled to maintain any claim against the sellers. On a motion by the sellers to set aside the award as to the costs of the award it was held that the discretion of the award of costs given by the arbitrator under section 18 must be exercised judicially and the phraseology of the award as to costs showed that the arbitrator was not directing his mind judicially to one of the most important elements affecting his discretion, i.e., the result of the case and consequently, that part of the award must be set aside. This was the opinion given by Davies, L.J. which was accepted by the other learned Judges of the Court of Appeal. The question again cropped up in the case of (6) Perry v. Stopper, (1959) 1 W.L.R. 415. There a builder claimed £ 54 being the balance of his account for work and labour done and materials supplied to the defendant. The defendant had disputed the claim, and particularised his grounds of dispute under 16 heads. The question again cropped up in the case of (6) Perry v. Stopper, (1959) 1 W.L.R. 415. There a builder claimed £ 54 being the balance of his account for work and labour done and materials supplied to the defendant. The defendant had disputed the claim, and particularised his grounds of dispute under 16 heads. The dispute was referred under section 89 of the County Courts Act, 1934 to an arbitrator who gave his findings in a written award. He dismissed seven of the defendant's points of dispute and considered two together and on the remaining points found on six in favour of the defendant and on two in favour of the plaintiff. He awarded the plaintiff £11 14s. 2d. on his claim for £54 and awarded the defendant costs on scale 3. The plaintiff applied under the proviso to section 89(3) to have the award as to costs set aside on the ground that the arbitrator had not exercised his discretion as to costs judicially in awarding them against the successful party in the absence of some reason connected with the case. The County Court Judge dismissed the application. On appeal it was held by Hodson, L.J. that there was no duty in a Judge or an arbitrator to give reasons for departing from the usual rule that costs followed the event. That on the face of this award there was doubt as to which was the successful party and, therefore, doubt as to whether the order as to costs was unusual. 10. This decision was relied on subsequently in the case of (7) Dineen v. Walpole, (1969) I Lloyd's Law Reports 291. There what happened was a claimant being a building owner claimed damages of about £60 in an arbitration proceedings against the respondent builder in respect of alleged defects in a new Bungalow. At the arbitration builder contended that he was not given notice of defects in time and that the arbitration proceedings were premature in that he was willing to do remedial work but had been denied access by the claimant. The claimant was awarded £45 but the arbitrator awarded that costs of arbitration be paid by the claimant. At the arbitration builder contended that he was not given notice of defects in time and that the arbitration proceedings were premature in that he was willing to do remedial work but had been denied access by the claimant. The claimant was awarded £45 but the arbitrator awarded that costs of arbitration be paid by the claimant. An appeal from that order as to costs was allowed by James, J. The builder appealed, submitting that onus was on, the claimant to show that there was no material on which the arbitrator could exercise his discretion. It was held by the Court of Appeal that, on the authorities, before an order that successful parties should pay costs could be made it must be shown by persons seeking that order that there was material on which discretion could be exercised in the way that it was and in this case there was no material on which arbitrator could so order. Several decisions were relied on. It is instructive as well as illuminating to refer to certain observations of Lord Justice Davies at page 265 of the report which are as follows :- "The arbitrator does not, of course, have to state reasons in his award, but there must be shown to be reasons on which he could exercise his discretion in the way that he did. The only other case to which I think it is necessary to refer is a casein this Court, Perry v. Stopper, (1959) 1 W.L.R. 415, and I refer to a passage in the judgment of Lord Justice Hodson (as he then was) at page 422 where he says:- The subsidiary ground put forward by Mr. Stroyan was that there was nothing shown on the face of the award, no material for an exercise of discretion in the way in which the arbitrator exercised it. I cannot accept that submission. It was clear on the face of the award that the claim was very much exaggerated in relation to the amount actually awarded, and it was also clear that on the important issues there had been failure on the part of the plaintiff. Thus, it is not a case where, on the face of the award it can be said that nothing is shown which justifies anyone exercising his discretion by making an order such as the arbitrator did. Thus, it is not a case where, on the face of the award it can be said that nothing is shown which justifies anyone exercising his discretion by making an order such as the arbitrator did. That was a case clearly distinguishable from the present case. There the claimant recovered only a trivial sum in comparison with that which he claimed and the claimant had failed on a number of very important issues in the arbitration. In the present case, although the claimant's claim was not quantified, we were told that it was somewhere in the region of £61, or there abouts. He recovered £45 and he succeeded on all the issues in the arbitration. The respondent's defence failed, and the only conceivable grounds to justify the drastic order which the arbitrator made were those contained in the failed defence. It seems to me completely wrong to accept that the allegations in the failed defence constituted proper materials on which this order could be made. I should add that the learned Judge, Mr. Justice James, did not make any order as to what should take place with regard to the costs; he merely set aside the arbitrator's award so far as that was concerned. By agreement, however, between learned Counsel in this Court we have been invited to make what we think is the proper order. In those circumstances, I should for myself dismiss the appeal with costs, and direct that the respondent in the arbitration do pay the claimant's costs of the reference and award." 11. Agreeing with this view Lord Justice Edmund Davies observed at page 265 as follows:- "Accordingly here, as it seems to me, the arbitrator having done exactly that and a warded the costs to the unsuccessful builder, it is, on the face of it, for the building to establish that he was entitled to those costs by a judicial exercise by the arbitrator of hi, discretion. Therefore, with profound respect, I dissent from the view expressed in the last cited by Mr. Justice Diplock (sup., at pp. 108 and 253 of the respective reports) in these words. ...I have no doubt that the umpire in an arbitration of this kind has power to deprive a successful claimant of his costs and, indeed, to order a successful claimant to pay the costs of the other side in appropriate circumstances. Justice Diplock (sup., at pp. 108 and 253 of the respective reports) in these words. ...I have no doubt that the umpire in an arbitration of this kind has power to deprive a successful claimant of his costs and, indeed, to order a successful claimant to pay the costs of the other side in appropriate circumstances. The mere fact, therefore, that, on the face of the award, the buyers have succeeded...but...nevertheless, been ordered to pay the costs of the sellers would, in my view, of itself be no ground for setting aside the award. If in reply to this notice of motion, nothing had been said by the umpire, who is of course not a party to these proceedings, as to the reasons why he had made an order of that kind. I do not think that there are any grounds upon which I could have interfered with this award. The "settled practice", in the phrase of Lord Goddard, C.J., being of the nature already indicated and so well-established, to my way of thinking, an order of the kind made in the present case is, on the face of it, one which calls for justification by those seeking to rely upon it." 12. His Lordship discussed the facts of the case. It would be instructive in the way their Lordships awarded the costs, to extensively refer to the observations and the conversation recorded in the Law Reports between Lord Justice Widgery and the learned Counsel appearing in that case which appear at page 267 of the reports as follows:- "I appreciate that Mr. Coningsby has attached importance to the fact that we have not seen the evidence heard before the arbitrator, but we have seen affidavits of the two Advocates and the general shape of the proceedings is clear enough. It is in my judgment inconceivable that there might yet lurk somewhere in a transcript of proceedings material upon which this drastic order could be supported. I would also dismiss the appeal. Mr. Garland: I would ask that the appeal be dismissed with costs in this Court and before the learned Judge. Lord Justice Davies: You already have the costs before the learned Judge. Mr. Garland: I have, and if your Lordships would also make an order giving me the costs of the reference and of the award. Mr. Garland: I would ask that the appeal be dismissed with costs in this Court and before the learned Judge. Lord Justice Davies: You already have the costs before the learned Judge. Mr. Garland: I have, and if your Lordships would also make an order giving me the costs of the reference and of the award. Lord Justice Davies: What I had in mind was to direct that the award be amended by ordering that the costs of the arbitration the reference if you like, and the award be paid to the claimant in the arbitration. Mr. Garland: With respect, I am not happy that your Lordships have jurisdiction to do that. My learned friend and I conferred on this Court's jurisdiction to deal with the costs of the reference and the a ward. If this Court will make an order for the costs of the reference and the award and not amend the award itself. Lord Justice Davies: Appeal be dismissed with costs. Respondent in the arbitration to pay the claimant's costs of the reference and award; is that right? Mr. Garland: With respect, I think so, and then the arbitrator's award as to costs has been set aside and then your Lordships replace it with your Lordships' own order in this Court. As I see it, that is the only way in which your Lordships' order can be fitted into the rather peculiar provisions of the Arbitration Act, 1950. Lord Justice Davies: Appeal dismissed with cost. Award as to costs set aside. Respondent in the arbitration to pay claimant's cost of reference and the award. Mr. Garland: I am happy with that order. Lord Justice Davies: Mr. Coningsby, I know that you do not like the result, but as an order do you agree with that? Mr. Coningsby ; Yes I do, my Lord. Lord Justice Davies: Very well." 13. Russell on Arbitration also put the position in the same line in the Edn. where at p. 366 it was observed that where the arbitrator did not follow the well-settled principle there must be certain reasons indicated. 14. Mr. Coningsby ; Yes I do, my Lord. Lord Justice Davies: Very well." 13. Russell on Arbitration also put the position in the same line in the Edn. where at p. 366 it was observed that where the arbitrator did not follow the well-settled principle there must be certain reasons indicated. 14. Having regard to the facts and circumstances of the case in my opinion, the proper exercise of judicial discretion of the arbitrator in this case so far as the costs are concerned should have been that the costs should have followed the event, namely, that the event being that the claimant had succeeded in establishing one-fourth of the claim. For that purpose admitting the entire costs that have been borne by the respondent which amounts to Rs.42,000/- the claimant should have been awarded one-fourth of that which comes to about Rs.10,500/-. On behalf of the petitioner however, it was said that Rs.17,000/- and odd being one-fourth of the claim awarded, only one-fourth of Rs.21,105/- which is the cost of the arbitrator, stenographer and his clerk, should have been awarded and not one-fourth of the costs incurred. Having taken the overall picture, in my opinion, the proper exercise of the discretion would have been to award the costs of Rs.10,500/- being one-fourth of the entire costs incurred by the respondent in recovering his claim during the process of arbitration including his own cost. Therefore, in not awarding in such manner, in my opinion, the arbitrator had deviated from the well-settled principles of law and as he had not indicated the reasons for such deviation the award contains an obvious error to that extent and I accordingly correct the award under Clause (b) of section 15 of the Arbitration Act by saying that the only portion of the award which should stand modified is that the petitioner would be liable to pay Rs.10,500/- as costs instead of Rs.20,000/- awarded by the arbitrator. In taking this view I am fortified by the decision of the Supreme Court in the case of (8) Upper Ganges Valley Electric Supply Co. In taking this view I am fortified by the decision of the Supreme Court in the case of (8) Upper Ganges Valley Electric Supply Co. Ltd. v. U.P. Electricity Board, AIR 1973 SC 683 where the Supreme Court at p. 888 of the report observed as follows:- "Normally, we would have remitted the award for a decision in the light of our judgment but that is likely to involve undue delay and expense in a dispute which is pending since 1959. Learned Counsel for the appellant was agreeable that we should ourselves amend the award. Learned Counsel for the respondent demurred but he was unable to indicate any cogent reason why we should not adopt a course which, far from causing any prejudice to the parties, was clearly in the interests of justice." In the aforesaid view of the matter, the award is accordingly amended. In the facts and circumstances of the case parties will pay and bear their own costs of this application.