Devinder Gupta ( 1 ) ON November 1,1989 this petition under Sections 14, 30 and 33 of the Arbitration Act, 1940 was preferred by the National Thermal Power Corporation Ltd. (hereinafter referred to as the petitioner seeking to set aside the award dated 9. 8. 1989 made at London by an Arbitral Tribunal constituted by the International Court of Arbitration of the International Chamber of Commerce (for short ICC Court ). ( 2 ) ON 14. 2. 1981 two contracts were entered into between the petitioner-Corporation and the respondent, which is an American Company. Under me first contract the respondent company was to design, manufacture, test and effect supplies of equipment and material on CIF basis for a computer based training simulator for the petitioners Super Thermal Power Bridge at Corba. By the second contract the respondent was to execute the work of clearance and handling at Indian Port, transportation and handing at site, storage, erection, testing and commissioning and fine tuning of the said training simulator at Corba. Value of the first contract was US 3,810,154/-plus Rs. 24,39,900. 00 whereas the value of the second contract was US 242,512/-plus Rs. 9,38,897. 00. 15. 7. 1984 was fixed as the time for completion of the contract, which actually was done on 1. 2. 1986. The general terms and conditions of the contract were expressly incorporated in agreements, which state that the laws applicable to the contracts shall be the law in force in India and the Courts at Delhi shall have exclusive jurisdiction in all matters arising under the contract. The general terms further provide in clause 27 thereof for settlement of the disputes amicably through the Engineer of the petitioner and in case of failure, settlement through Arbitration by International Chamber of Commerce, Paris: ( 3 ) IN terms of clause 27 of the general conditions of contract, the respondent on 4. 11. 1996 approached the petitioner s Engineer calling upon him to settle its claims for damages for US 3,085,187/-, which according to the respondent were due to various acts and omissions and breach of the terms of agreements. It was requested that in terms of Clause 27 the claims be settled within the time prescribed therein, failing which the respondent would have no altemathe but to take recourse to arbitration as provided in the agreement. Petitioner s Engineer on 26. 12. It was requested that in terms of Clause 27 the claims be settled within the time prescribed therein, failing which the respondent would have no altemathe but to take recourse to arbitration as provided in the agreement. Petitioner s Engineer on 26. 12. 1986 took his decision and turned down the respondent s claim. The respondent thereafter nominated Mr. Yves Derains, Deraines Gelinas and Associates, 66 Avebye des Champs, Elysees, 75000 paris as its arbitrator through letter dated 29. 4. 1987 and also called upon the petitioner to appoint its arbitrator in terms of Clause 27. 7 of the General Conditions of Contract. A request was also made to the President, ICC Court of Arbitration to appoint a third arbitrator in accordance with the said Clause 27. 7. On failure of the petitioner to appoint its arbitrator, the petitioner on 28. 7. 1987 submitted a request for arbitration before the Court of Arbitration, International Chamber of Commerce, Paris under Article 3 of ICC Rules. ( 4 ) RESPONDENT s reference for arbitration was received and registered by the ICC on 30. 7. 1987. On 4. 1. 1988 the petitioner repudiated the respondent s claim by submitting its answer to the request for arbitration made by the respondent and also laid its counter claim. In preliminary and legal grounds raised it was stated that the entire claim of the respondent was legally untenable being Wholly barred by time-limitation. On 29. 2. 1988 the respondent submitted its rejoinder and answer to the petitioner s counter claim. On 22. 7. 1988 the petitioner submitted its rejoinder to the respondent s answer. Draft terms of reference were considered at a preliminary meeting between the Tribunal and the representative of the parties on 28,29 and 30. 10. 1988 at London. Terms of reference w ere approved by ICC at its session on 13. 9. 1988, which identified the following 11 issues to be decided in arbitration:- 1. Whether the laws of India govern procedural matters in the Arbitration. If not, what is the applicable procedural law. 2. Whether the entire reference to arbitration is invalid because the Request for Arbitration was not signed by an authorised signatory of the Claimant; and, if not 3. Whether the reference is bad and incompetent because it purports to join claims under two separate contracts; and, if not 4. If not, what is the applicable procedural law. 2. Whether the entire reference to arbitration is invalid because the Request for Arbitration was not signed by an authorised signatory of the Claimant; and, if not 3. Whether the reference is bad and incompetent because it purports to join claims under two separate contracts; and, if not 4. Whether any of the claims or counter claims in the Arbitration fail by reason of non-submital to the Engineer pursuant to Clause 27 of the General Conditions of Contract. This issue will be decided in respect of any claim or counter claim in respect of which it is raised at the time of consideration of the issue concerned. 5. Whether the reference to arbitration is bad by reason of not being made within the time allegedly prescribed by the Contractor, and if not 6. Whether the whole, or part, of the Claimant s claims are barred by time limitation pursuant to the (India) Arbitration Act, 1940, and the (Indian) Limitation Act 1908;and if not 7. Whether the Claimant is estopped from asserting the claim for US $ 825,000 and 8 months schedule extension by reason of having previously withdraw the claim, for consideration, unconditionally. 8. Whether each of the seven Claimant s claim amounting to US $3,085,187 and 18 months schedule extension set up on page 3 of these Terms damages and/or schedule extension the Claimant is entitled in respect of each such head of claims. 9. Whether each of the seven counter claims of the Respondentamounting in total to Rs. 41,155,303. 00 plus $ 744, 592 setout on pages 4 and 5 of these terms of Reference is barred by time limitation and, if not, whether each such counter claim is valid and, to what amount the Respondent is entitled in respect of each such individual valid claim. 10. Whether the Claimant s claim for interest, referred to, and objected to by the Respondent, in paragraph 2 (1) and 3 (h) above, can be considered in the absence of pleadings as of this date, as an issue in these arbitration proceedings and, if so, how claims for interest should be pleaded in the Arbitration by the parties. 11. What pro vision should be made pursuant to Article 20 of the Rules of the International Chamber of Commerce Court of Arbitration in respect of the payment of the costs of the arbitration. 11. What pro vision should be made pursuant to Article 20 of the Rules of the International Chamber of Commerce Court of Arbitration in respect of the payment of the costs of the arbitration. " ( 5 ) ISSUES 1,2,3,5,6,9 and 10 were taken as preliminary issues. Parties made their written and oral submissions. The issues were decided by the ICC Court at London on 9. 8. 1989. Decision is in the shape of an interim award termed as "award Sentence". The interim award has held that: the laws of England govern procedural matters in the arbitration; the entire reference to arbitration is not -invalid because the request for arbitration was allegedly not signed by an authorised signatory of the respondent; the reference is not bad and incompetent because it purports to join claims under two separate contracts; the reference to arbitration is not bad by reason of not being made within the time allegedly prescribed by the contract; neither the whole, nor any part of the respondents claims are barred by time limitation under laws of India; none of the seven counter claims of me petitioner amounting to Rs. 4,11,55,303. 00 plus US $ 7444,592 set out on pages 4 and 5 of the terms of reference are barred by time limitation; and the respondents claim for interest can be considered in the absence of pleadings as to the date of the terms of reference as an issue in the arbitral proceedings. ( 6 ) COPY of the interim award was received by the petitioner on 4. 10 1989. Its certified copy was received by the petitioner s counsel on 30. 0. 1989 under the cover of ICC, Paris letter dated 25. 9. 1989. This petition was instituted thereafter on 1. 11. 1989 for setting aside the award. The petition has been vehemently opposed by the respondent. Number of preliminary objections were raised. On 23. 5. 1990 learned Single Judge of this court decided the question of maintainability of the petition holding that the interim award is a foreign award within the meaning of Foreign Awards (Recognition and Enforcement) Act, 1961 and as such outside the purview of the Arbitration Act and consequently dismissed the petition as not maintain-able. Appeal against the said order (FAD (OS) 102/90) was dismissed by a Division Bench of this Court on 12. 2. 1991. Appeal against the said order (FAD (OS) 102/90) was dismissed by a Division Bench of this Court on 12. 2. 1991. Supreme Court granted petitioner s Special Leave Petition and consequently Civil Appeal No. 1978/92 was allowed on 7,5. 1992. The said decision is reported as National Thermal Power Corporation v. The Singer Company and others, AIR 1993 sc 998 . The point for consideration before the Supreme Court was whether the High Court was right in rejecting the petitioner s application filed under the provisions of the Arbitration Act, 1940 and in holding that the award, which was made in London on an arbitration agreement, was not governed by the laws of India and that it was a foreign award within the meaning of Foreign Awards (Recognition and Enforcement) Act. The decision of this Court was set aside. Petitioner s appeal was allowed holding that the award is governed by the laws in force in Ihdia, including the Arbitration Act, 1940. All substantial rights arising under the agreement, including those which are contained in the arbitration clause were held to be governed by the laws of India. It was further held that in spite of the actual conduct of the arbitration, the procedure of England may be applicable to the extent that ICC Ruled are insufficient or repugnant to the public policy or other mandatory provisions of the laws in force in England. While setting aside the decision of this Court a direction was made to consider petitioner s application on merits on which no views were expressed by the Supreme Court. ( 7 ) AFTER the decision of the Supreme Court, when the petition was taken up for hearing, the respondent moved an application (IA 10764/93), praying that petition preferred for setting aside the award be dismissed since the same was not maintainable. Four grounds were urged. Firstly that the award cannot be termed as an interim-award. Only findings have been given by the arbitral Tribunal on preliminary issues, which are in the nature of interlocutory orders only, and since there was no award, the petition was not maintainable. Second ground was that the interim award has not been filed by the arbitrators in Court, as envisaged under the provisions of Section 14 of the Arbitration Act. Petitioner had filed the award without any authority, therefore, the petition for setting aside the same was not maintainable. Second ground was that the interim award has not been filed by the arbitrators in Court, as envisaged under the provisions of Section 14 of the Arbitration Act. Petitioner had filed the award without any authority, therefore, the petition for setting aside the same was not maintainable. Third ground raised was that no appeal against interim award or final award is maintainable in view of Article 24 of the Rules of International Chamber of Commerce and for that reason also the petition is liable to be dismissed. The fourth ground was that the impugned award is on a question-of law, namely limitation, which had been decided by the arbitral Tribunal. It being a decision on a question of law, which had specifically been referred for arbitration, the award made thereupon is not challengeable. This application was disposed of an order passed by me on 6. 4. 1995. First three grounds were turned down and the last ground was kept alive to be decided at the time of final hearing. Learned counsel for the parties have been heard finally who have taken me through the entire record ( 8 ) LEARNED counsel for the petitioner in the course of his submissions contended that the four claims of the respondent were clearly barred by limitation. Claims 1,2 and 3 are for the alleged delay of 8 months in receipt of design data supplied by the petitioner to the respondent for the design of simulator; on account of alleged inaccurate design data supplied by the petitioner; and for the alleged delays by the petitioner in installation of simulator and inadequate facility at the project site. The fourth claims is for interest on the three aforementioned claims. It is urged that Article 55 of the Limitation Act provides for a period of three years for filing a suit from the date when the contract is broken, when claim is founded on breach of contract. ( 9 ) IT is contended that there is an error apparent of the face of the record. It is urged that Article 55 of the Limitation Act provides for a period of three years for filing a suit from the date when the contract is broken, when claim is founded on breach of contract. ( 9 ) IT is contended that there is an error apparent of the face of the record. The error of the arbitrators in holding that the claims of the respondent are not barred by limitation on the ground that period of limitation commences from the time the negotiations between the parties failed is an error of law apparent on the face of the record and the said error is subject toreview by this Court on an application made under Sections 30 and 33 of the Arbitration Act. The relevant date of commencement of the period of limitation whether from the date of the breach or some future date of accrual of damages or negotiations is purely a legal issue. If such an issue is decided wrongly it would clearly constitute a legal error reviewable within the stipulated and established para meters of the doctrine of error apparent on the face of the record. ( 10 ) LEARNED counsel for the respondent vehemently contended that under the Arbitration Act, no appeal lies on merits against the aw ard and the only exception being that where there is a mistake of law apparent of the face of the award. It was also contended that the petition has not been filed in accordance with Section 14 of the Arbitration Act. Neither the original aw ard is before the court, not the arbitration proceedings are before it. Arbitrator has not filed the aw ard and did not authorise or direct any of the parties to file the same in court, as such the petition is not maintainable. It was further contended that the mere fact trial this Court in its order on 6. 4. 1995 has turned down respondent s objection cannot debar the respondent now from agitating the same again and the same also cannot preclude this court from considering the matter afresh in later part of proceedings. It was further contended that the mere fact trial this Court in its order on 6. 4. 1995 has turned down respondent s objection cannot debar the respondent now from agitating the same again and the same also cannot preclude this court from considering the matter afresh in later part of proceedings. It was also submitted by the learned counsel for the respondent that the petition is liable to be dismissed on the ground that the award challenged by the petitioner is not an interim award, which can be subject to challenge since no question of any liability has been decided therein against either party by the arbitrators. Petitioner expressly entered into an agreement that ICC Rules would be applicable and as per Articles 24 of the ICC Rules the petitioner has waived of its right to file any objections against the award. Another main plank of the arguments by the learned counsel for the respondent has been that the question of limitation as raised by the petitioner in this case is a question of law and the arbitrators having given the decision on it, it is not permissible now for the petitioner to challenge the same. Both the petitioner and the respondent referred specific questions of law to the arbitrators by signing the agreed terms of reference also specifically agreed that the arbitrators must decide issue of limitation. Arbitrators, thus, having taken a decision - whether rightly or wrongly - the same cannot be questioned in these proceedings. ( 11 ) IN addition to making oral submissions and submitting written notes of arguments, reliance was placed by learned counsel for the parties on number of decisions, ( 12 ) IT may be necessary to deal with the documents, placed by the parties on the record of this case except by referring to the relevant clauses of the contract as regards settlement and arbitration. ( 13 ) CLAUSE 26 deals with settlement of dispute and states that except as otherwise specifically provided in the contract all disputes, concerning questions of fact, arising under the contract shall be decided by the Engineer, subject to a written appeal by the contractor to the Engineer, whose decision shall be final. ( 13 ) CLAUSE 26 deals with settlement of dispute and states that except as otherwise specifically provided in the contract all disputes, concerning questions of fact, arising under the contract shall be decided by the Engineer, subject to a written appeal by the contractor to the Engineer, whose decision shall be final. Any dispute or difference, including those considered as such by only one of the parties, shall be to the extent possible, settled amicably between the parties and if amicable settlement cannot be reached then all disputed issues shall be settled by arbitration, as provided in Clause 27. Relevant portions of Clause 27 read : 27. 0 ARBITRATION 27. 1 If any dispute or difference of any kind whatsoever shall arises between the Owner and the Contractor, arising out of Contract, for the performance of Works, whether during the progress of before or after the termination, abandonment or breach of the Contract, it shall, in the first place, be referred to and settled by the Engineer, who, within a period of thirty (30) days, after being requested by either party to do so, shall given written notice of his decision to the Owner and the Contractor. 27. 2 Save as hereinafter provided, such decision in respect of every matter so referred shall be final and binding upon the parties until the completion of the Works and shall forthwith be given effect to by the Contractor who shall proceed with he Works with all due diligence, whether he or the Owner requires arbitration as hereinafter provided or not. 27. 3 If after Engineer has given written notice of his decision to the parties, no claim to arbitration has been communicated to him by either party within thirty (30) days from the receipt of such notice, the said decision shall become final and binding on the parties. 27. 4 In the event of die Engineer failing to notify his decision as aforesaid within thirty (30) days after being requested as aforesaid, or in the event of either the Owner or the Contractor being dissatisfied with any such decision, or within thirty (3) days after the expiry of the first mentioned period of thirty (30) days, as the case may be, either party may require that the matter in dispute be referred to arbitration as hereinafter provided. 27. 27. 5 All disputes or differences in respect of which the decision, if any, of the Engineer has not become final or binding as aforesaid, shall be settled by arbitration in the manner hereinafter provided. 27. 6. 1 xxx xxx xxx xxx 27. 6. 2. xxx xxx xxx xxx 27. 7 In the event of foreign Contractor, the arbitration shall be conducted by three arbitrators, one each to be nominated by the Owner and the Contractor and the third to be named by the President of the International Chamber of Commerce, Paris, save as above all Rules of Conciliation and Arbitration of the International Chamber of Commerce shall apply to such arbitrations. The arbitration shall be conducted at such places as the arbitrators may determine. 27. 8 The decision of the majority of the arbitrators shall be final and binding upon the parties. The expense of the arbitration shall be paid as may be determined by the arbitrators. The arbitrators may, from time to time, with the consent of all the parties enlarge the time for making the award. In the event of any of the aforesaid arbitrators dying, neglecting, resigning or being unable to act for any reason, it will be lawful for party concerned to nominate another arbitrator in place of the outgoing arbitrator. ( 14 ) ON November 4. 1986 the respondent served a notice on the Engineer of the petitioner, in terms of Clause 27. 1, for settlement of its four claims. Under Claim No. 1 it w as alleged that Clause 19. 4 of. the contract required the plaintiff to provide all design data for the Simulator by 14. 8. 1981. The data was not received, as stipulated in the contract, which resulted in increased cost of performance by the respondent. Because of the late supply of data, order for hardware for the Simulator could not be placed in a timely manner, so as to keep pace with the delivery schedule. Because of the complex nature of manufacturing the Simulator, development word on other aspects of the project was also delayed. The said delay in furnishing the data, thus, resulted in 8 months wastage, causing financial loss of US $ 8,25,000, which the petitioner was liable to pay to the respondent. It was stated that the petitioner and the respondent met to negotiate this claim for US $ 8,25,000. The said delay in furnishing the data, thus, resulted in 8 months wastage, causing financial loss of US $ 8,25,000, which the petitioner was liable to pay to the respondent. It was stated that the petitioner and the respondent met to negotiate this claim for US $ 8,25,000. It was agreed that the contract schedule and liquidated damages would be adjusted within six months. Despite such agreement, which w as based upon the fundamental understanding that the problem with the petitioner in supplying the data would not continue in future, the said problem still continued with the petitioner, therefore, the respondent was reasserting its claim for US $ 8,25,000. ( 15 ) THE second head of claim for US $ 5,70,000 and four months extension to the contract delivery requirement, w as based on the increased costs, alleged to have been incurred by the respondent as a result of the alleged inaccurate and deficient design data supplied by the petitioner. In accordance with Vol. 1 of the General Conditions of Contract, Clause 22 "delays by Owner or its authorised agents" claim of US $ 4,76,000 and four months extension w as sought through respondent s letter dated 9. 6. 1983. ( 16 ) FOR the third claim for US $ 7,40,467 it w as stated that the respondent through telex message dated 26. 9. 1984 informed the petitioner of various problems associated with the facility and other actions and omissions on the part of the petitioner. Additional delays and increased cost due to Korba Simulator facility not being ready for installation of the Simulator equipment, in addition to other problems. It was stated that the sub-standard conditions contributed to the increased cost of performance as well as caused undue emotional stress on the respondent s Engineer personnel at Korba site. The acts of omission and commission, on the part of the petitioner, resulted in idling of the respondent s personnel at Korba site as well as increase in the cost of coordination and support, required at respondent s headquarter. In addition, it was alleged that there was an increase in the cost of labour, equipment, repairs to equipment etc. Which was damaged as a direct result of sub- standard facility. Petitioner s failure to process invoice, failure to lend customs clearance, support etc. In addition, it was alleged that there was an increase in the cost of labour, equipment, repairs to equipment etc. Which was damaged as a direct result of sub- standard facility. Petitioner s failure to process invoice, failure to lend customs clearance, support etc. further increased the respondent s administrative cost of performance thereby resulting in a loss to the tune of US $ 7,40,467. ( 17 ) UNDER the fourth claim for US $ 1,04,372 the respondent prayed for being allowed interest and other damages on the amount of the aforementioned three claims. ( 18 ) IN response to respondent s notice dated 4. 11. 1986 for settlement of its claim the petitioner,s Engineer, in terms of sub-clause (1) of Clause 27, took his decision and conveyed the same to the respondent through letter dated 26. 12. 1986. Not being stratified with the Engineer s decision, the respondent on 28. 7. 1987 submitted its request (annexure P-4) for arbitration before the Court of Arbitration, International Chamber of Commerce, Price alleging that after its claims had been turned down by respondent through its letter dated 29. 4. 1986, had nominated Yves Deraines Gelinas and Associates, 66-Avenue des Champs Elysees, Paris as its arbitrator and had called upon the petitioners to appoint its arbitrator, in terms of Clause 27. 7 of the Contracts. A request was also made to the president, international chamber of Commerce, Court of arbitration, to appoint third arbitrator. It was stated that having regard to the facts and circumstances involved, the nature of, questions and controversy between the parties and the arbitration agreement, the subject matter of dispute is required to be referred to three arbitrator, who to be appointed by the parties and the third by the President of International Chamber of Commerce, Paris. Since the respondent had already appointed its arbitrator and the venue of the arbitration was to be in the discretion of the arbitrators, the respondent prayed that an arbitration Tribunal be constituted at the earliest possible time ( 19 ) THE above request on behalf of the respondent was received by the Secretariate of the International Court of Arbitrators on 30. 7. 1987. 7. 1987. It is not in dispute amongst parties and is also so state in the impugned award that the date of the commencement of the arbitral proceedings in terms of Article 3 of the International Chamber of Commerce Rules (1980 Edn.) (for short icc Rules ) is the date, when the request for arbitration was received by the Secretariate of the Court, namely, 30. 7. 1987. In terms of Articles 4 and 5 of the ICC Rules the petitioner on 4. 1. 1988 submitted its answer to the respondent s request and also filed its counter claim annexure P-5. ( 20 ) BY way of preliminary objection and legal grounds the petitioner pleaded that the entire claim of the respondent was legally untenable being wholly barred by time limitation. According to the petitioner, as per respondent s own version as well as on the agreed provisions of the contract, as amended, the alleged breaches of the contract for the three claims took place on 14. 8. 1981, between 4. 6. 1981 to 31. 3. 1982, and in November, 1983, respectively therefore, respondents s reference dated 28. 7. 1987 for arbitration, received and registered by ICC on 30. 7. 1987 was ex-facie beyond the prescribed statutory period of three years limitation under the Indian Limitation Act. Being barred by time the application was liable to be dismissed. For the sake of clarity the petitioner in a tabulated from gave the description of the alleged claims of the respondent; the dates of lodging of the claims by respondent with the petitioner; the dated of the alleged breach of contract and the dated of expiry of the period of limitation with respect to each claim. It was stated in reply that before the respondent had even made a request, in terms of Articles 3 of ICC Rules for arbitration or even before the request was made by it to the Engineer for settlement of its claims the same otherwise had become barred by limitation. ( 21 ) IT may be observed that neither in its notice dated 4. 11. 1986, which the respondent served upon the petitioner s Engineer for his decision on its claims, nor in the letter of request (annexure P-4) made by the respondent on 27. 7. ( 21 ) IT may be observed that neither in its notice dated 4. 11. 1986, which the respondent served upon the petitioner s Engineer for his decision on its claims, nor in the letter of request (annexure P-4) made by the respondent on 27. 7. 1987 to the Court of Arbitration under Article 3 of ICC Rules, the question as regards limitation, as a subject matter of dispute was referred for arbitration by the respondent. Only on the respondent s claim (claims 1 to 4) the decision of the Engineer was sought. On those claims only a request was made by the respondent to the ICC Court for arbitration. ( 22 ) ON the pleadings of the parties before the Court of Arbitration and pursuant to Article 13 of the ICC Rules, terms of reference was adapted, which also incorporated therein under Clause D thereof, the issues to be decided, which were 11 in number and have been reproduced above. Issue No. 6 is again quoted, which reads: "whether the whole or part of the claimant s claims are barred by time limitation pursuant to the (India) Arbitration Act, 1940, and the (Indian) Arbitration Act, 1940, and the (Indian) Limitation Act, 1908". ( 23 ) THE Arbitral Tribunal came to the conclusion that the reference to arbitration on 30. 7. 1987 was well within the period of limitation prescribed by Indian law and the respondent s claims are not barred by time limitation under Indian law. ( 24 ) THERE cannot be any dispute with in settled legal proportion that if a question of law is specifically referred to and it becomes evident that the parties desired to have a decision from the arbitrators on the specific question rather than from the Court, then the Court will not interfere with the award of the arbitrator on the ground that there is an error of law apparent on the face of the accused, even if the view of law taken by the arbitrator does not accord with the view of the Court. Dr. Dr. Singhvi appearing for the petitioner has also not disputed proposition that the question of law in this case being a pure question of law could be referred to arbitration by the parties and in case such a question can be said to have been specifically referred for arbitration, the impugned award will not be liable to be set aside merely upon the ground that the decision of the Arbitral Tribunal in wrong. But his submission has been that before applying this legal proportion the primary question to be decided would be that whether or not the question of limitation, as is framed in issue No. 6 was referred for arbitration to the Arbitral Tribunal for its decision. ( 25 ) IT is in terms of the arbitration agreement that an arbitrator derives his authority to arbitrate. An award being a decision of an arbitrator, whether a lawyer or a layman, chose by the parties and entrusted with power to decide a dispute submitted to him, the same ordinarily will not be liable to be challenged on the ground that it is erroneous. The award is the decision of a domestic Tribunal chosen by the parties and civil courts, which are entrusted with the power to facilitate arbitration and to effectuate the award cannot exercise appellant powers over the decision. Wrong or right, the decision is binding, if it is reached fairly, after giving adequate opportunity to the parties to place their grievances in the manner provided by the arbitration agreement. But an award will be bad on the ground of error of law on the face of it, when in the award itself or in a document actually incorporated in it, there is bound some legal proportion, which is the basis for the award and which in erroneous. An error of law on the face of the award means "you can find in the award or a document actually incorporated thereto, as for instance, a note appended by me arbitrator, stating the reasons for his Judgment, some legal proposition, which is the basis for the award and which you can say is erroneous. ( 26 ) BUT the above extent of the jurisdiction of the Courts to set aside an award of the Arbitrator, as judicially notice Chnmnxev Bhara Company v. The Jiyraj Ballo Spinning and Weaving Company Ltd. . ( 26 ) BUT the above extent of the jurisdiction of the Courts to set aside an award of the Arbitrator, as judicially notice Chnmnxev Bhara Company v. The Jiyraj Ballo Spinning and Weaving Company Ltd. . AIR 1923 PC 66, is subject to an exception, namely, if a specific question of law is submitted to the Arbitrator and he answers its. The fact that the answer involves an erroneous decision of point of law. does not make the award was on its face so as to permit of its being set aside. In Champsey Bhara Company s case (supra) the Judicial Committee of Privy Council held "the question of whether an arbitrator acts within his jurisdiction is. of course, for the Court to decide, but whether the arbitrator acts within his jurisdiction or not depends solely upon the clause of reference. " ( 27 ) IN Tlwvards Plierumaland anotherv. Union of India, AIR 1955 SC 46s the apex court held that a distinction must be drawn betw een cases in which a question of law is specifically referred and those in which a decision on a question of law in incidentally material (however necessary) in order To decide the question actually referred. Making reference to the decisions in Kenathan government Duff Development Co. Ltd. 1923 AC 395: Champsey Bhara Company (supra): Salesh Mahomad Umer Dossal v. Nathoomal K-essamal, AIR 1927 PC 164; Gulam Jilani v, Muhamad Hassan, 29 Ind. Appeals 51; F. R. Absalom Ltd. v. Great Western, (London) Garden Village society, 1933 AC 592 (b); Heyman v. Danvins Ltd. , 1942 AC 356 and A. M Mair and Co. V. Gordhandass Sagarniull, AIR 1951 SC 9 it was held that ""if a question of law is specifically referred and it is evident that the parties desired to have a decision from the arbitrator about that rather than from the Courts, then the Courts will not interfere". A reference requires an assent of both sides. If one side is not prepared to submit a given better to arbitration, when there is an agreement between them that it should be referred, then recourse must be had to Court under Section 20 ofthe Arbitration Act and the reluctant party can then be compelled to submit the matter to arbitration. A reference requires an assent of both sides. If one side is not prepared to submit a given better to arbitration, when there is an agreement between them that it should be referred, then recourse must be had to Court under Section 20 ofthe Arbitration Act and the reluctant party can then be compelled to submit the matter to arbitration. In the absence of either, agreement by both skies about the terms of reference or an order ofthe Court compelling a reference, the arbitrator is not vested with the necessary exclusive jurisdiction. The court in para 18 of the report further observed: "when a question of law is the point at issue, unless both side specifically agree to refer it and agree to the bound by the arbitrators decision, the jurisdiction of the Court to set an arbitration right when the error is apparent in the face of the awardis not ousted. The mere fact that both parties submitted incidental agreements about a point of law in the course of proceedings is not enough. " ( 28 ) IN terms of decision of Thawardas Pherumal s case (supra) the reference in this case for adjudication by the arbitrators was on four claims ofthe respondent . The same w ere specifically referred for adjudication by the respondent firstly to the Engineer ofthe petitioner. The respondent was not satisfied with the Engineer s decision. In terms of Clause 27 ofthe Contract, the same formed the subject matter of request made by the respondent to the ICC under Articles 3 ofthe ICC Rules. Date of commencement ofthe arbitral proceedings undoubtedly is the date when the request was received by Secretariat ofthe International Court of Arbitrators, which in the instant case is 30,7. 1987: In no part of the request made by the respondent for arbitration, decision of the arbitrators was sought by the respondent on the question of limitation. Question of limitation has not at all arisen by that date when request for arbitration was made. Such a. question that the claims of the respondent were barred by the limitation was raised for the first lime by the petitioner, when it submitted its answer to the respondent s request. Question of limitation has not at all arisen by that date when request for arbitration was made. Such a. question that the claims of the respondent were barred by the limitation was raised for the first lime by the petitioner, when it submitted its answer to the respondent s request. It was by way of defence and by way of answer to the respondent s request on its claims that the petitioner, in reply filed, as per requirement of Article 4 of ICC Rules, stated that the claims cannot be entertained being barred under the law of limitation. It is also the respondent s case that question of limitation was not specifically referred at any time prior to the date when the terms of reference were adopted by the arbitrators pursuant to Article 13 of the ICC Rules reads : ( 29 ) CLAUSE (1) of Article 13 of the ICC Rules reads: "terms of reference 1. Before proceeding with the preparation of the case, the arbitrator shall draw up, on the basis ofthe documents in the presence ofthe parties and in the light of their most recent submissions, a documents defining his Term of Reference. This document shall include the following particulars. a) the full names and description of the parties. b) the addresses ofthe parties to which notifications or communications arising in the course of the arbitration may validly be made. c) a summary of the parties respective claims. d) definition of the issues to be determined. e) the arbitrators s full name, description and address. f) the place of arbitration. g) particulars ofthe applicable procedural rules and, if such is the case, reference to the power conferred upon the arbitrator to act as amicable compsiteur. h) such other particulars as may be required to may be required to make the arbitral award enforceable in law, or may be regarded as helpful by the Court of Arbitration or the arbitrators. " ( 30 ) THE entire documents required to be drawn under Clause (i) of Article 13, is called Terms of Reference, which also includes summary of parties respective claims and the issues to be determined. Since this document, namely. " ( 30 ) THE entire documents required to be drawn under Clause (i) of Article 13, is called Terms of Reference, which also includes summary of parties respective claims and the issues to be determined. Since this document, namely. Term of Reference was signed, for and on behalf of the petitioner by its counsel and also for and on behalf of the respondents by its counsel, as per requirement of Clause (2) of Article 13, it has been the contention of learned counsel for the respondents that the question of limitation was specifically referred for adjudication by the arbitrator and it is on that premise that it is contended that the petitioner is precluded from challenging the award, being an award by the arbitration on a question of law specifically referred to the arbitrator. ( 31 ) THE above submission made on behalf of the respondent is liable to be turned down in the ration of the decisions ofthe Supreme Court in Alopi Prashad and Sons Ltd. v. Union of India v. A. L. Reila Ram, AIR 1963 SC 1685 . Ralia Ram's case has clearly culled out a distinction in two type of cases "where a specific reference on a question of law is made" and w here "the question of law arises for determination by the arbitrators in the decision of the disputes". Referring to the observations made in F. R. Absalom Ltd. and Great Western (London) Garden Village Society Ltd. , 1933 AC 592, as approved in Thawardas Pherumal's case and Alopi Prashad's case (supra) it was held that when question of law is the point at issue, unless both sides specifically agree to refer it and agree to be bound by the arbitrators' decision the jurisdiction of the Court to set an arbitration right, when the error is apparent on the face of the award is not ousted. The mere fact that both parties submitted incidental arguments about a point of law in course of proceedings is not enough or in other words simply because the matter was referred to incidentally in the pleading and arguments in support of, or against, the general issued that is not enough to clothe the arbitrator with the exclusive jurisdiction on a point of law. ( 32 ) ON the ration of the decisions in Thawards Phermul and Alopi Parshad and Ralia Ram' cases where a specific question of law has been referred to the arbitrator for his decision that no interference is possible by the Courts on the ground that decision on the question of law is errondous or that there is nay erro of law apparent on the face of award. In such of the cases where disputes are referred to arbitrators, in the decision of which a question of law becomes material; the court can interefere if and when any error of law appears on the face of award. In Ralia Ram's case it was further observed that merely by giving assent to the issues raised before the arbitrators, the advocate appearing on behalf of the Government of India Court not assume to himself the authority to bind the Government to a specific reference on a question of law, because a refrence on a substantial question may be effective only if there be an agreemetn express or implied that the arbitrator will decide the question specifically referred to him and That the decision will be binding upon the parties. In the absence of any such contract in the from prescribed, the possible pleas of an agreement, subsequent to the reference, would be futile ( 33 ) THE question of time-limitation, the subject matter of issue No. 6 was not a question specifically referred to arbitration by the respondent. It finds mention in the terms of reference, which were adopted in order to comply with the procedure requred to be followed as per Article 13 of the ICC Rules, Issue No. 6 w as fromulated of such an issue would only amount to projecting or focusing the attention of the parties on the question to be decided or adjudicated upon on the disputed claim of the respondent, the same cannot be taken to be or considered a question specifically referred for adujudication. Merely framing of the issue while adopting terms of reference by the arbitrators and the mere fact that the counsel for the parties adopted the terms of reference, it cannot be inferred that the question of law, either was specifically referred for adjudication or the parties ever intended that the decision on the question of law, which incidentally arose for determination, while adjudicating the clamis of the respondent would be binding on the parties or that the parties will be precluded from questioning the award of the arbitrator on that question of limitation. It is not shown that there was an agreement, express or implied amongst the parties or by their duly constituted representatives, that the arbitrates will deicde the question of limitation specifically referred to them and that their decision will be binding on the parties. The preliminary objection raised by the respondent accordingly on application oflhe principles enunciated in Ralia Ram's case (supra) deserves to the negatived and it must be held that question of limitation arose incidentally. Decision thereupon would not be final and binding and the arbitrators will not be final and binding and the arbitrators will not be deemed to be having exclusive jurisdiction on the said point of law and that the same would be liable to be challenged on the ground of error of law on the face of the award. ( 34 ) THE next submission of behalf of counsel for the petitioner is that there is an error apparent on the face of the award. The award of the arbitrators in the face of the award. The award of the arbitrators in holiding that the claims oflhe respondent are not barred by limitation proceeded on the gound that period of limitation commenced when the defendant acquired the right to require, arbitration I was farther observed that according to the contract the right can be said to have been acquired only after the parties had exhauseted the possibility of amicable settlement as per cluse 26. 2 and thereafter the process of reference to Engineer for his decisions and rejection by the Engineer as per Clause 27. This decision of the arbitrators, it is contended, is an error of law apparent on the face of the aw ard and the same is subject to review by the Court on a application made under Section 30 and 33 of the Arbitration Act. 1940. This decision of the arbitrators, it is contended, is an error of law apparent on the face of the aw ard and the same is subject to review by the Court on a application made under Section 30 and 33 of the Arbitration Act. 1940. It was urged that the issue whether limitation will commence from the date of breach of damages or failure of negotiations or decision by the Engineer is a pure legal issue. The relevant date for commencement oflhe period of limitation is a legal issue and it such an issue has wrongly been dicided by the arbitrator it would clearly constitute a legal issue reviewable within the established parameters of the doctrine of error apparent on the face of the award. It is also contended that the reference-by the arbitral Tribunal to various Clauses oflhe General Terms and Conditions of Contract results in incorporation in the aw ard of the General Term as and Conditions of Contract or at least those Clause which are referred to in the award. As such it would be open for this Court to look at the General Terms of the Contract, While reviewing the award. ( 35 ) ON merits of the error apparent on the face of the record, learned counsel for the petitioner submitted that the respondent had laid found claims Each of the claims was beyond limitation as on the date of commencement of the arbitration proceedings under Article 55 of the Limitation, on Act, which applies to breaches of contract. First claim made on 4. 10. 1981 is due to the alleged delay on the part of the petitioner in supplying the design data. The claim was rejected by the petitioner and conveyed to the respondent through petitioner in its letter dated 29. 11. 1981. Respondent again rejected by the petitioner and conveyed through letter dated 16. 7. 1982. According to the respondent the alleged breach of contract took place on 14. 8. 1981. the date by which the petitioner was to supply the data under the contract. Thus. the limitation for any claim founded on such breach expired on 13,8. 1984 on completion of three years from the date of the alleged breach, as provided in Article 55 of the Limitation Act, 1963. Request for arbitration having been made on 28. 7. 1981. the date by which the petitioner was to supply the data under the contract. Thus. the limitation for any claim founded on such breach expired on 13,8. 1984 on completion of three years from the date of the alleged breach, as provided in Article 55 of the Limitation Act, 1963. Request for arbitration having been made on 28. 7. 1987 was much beyond the expiry of the period of three years from the alleged breach. The second claim oflhe respondent is for a sum of US $ 4. 76 000 as damages on account of alleged inaccurate and defective design date supplied by the petitioner. This claim made by the'respondent for the alleged breach though its letter dated 9. 6. 1983. According to the respondent the alleged breach of contract on the ground of supply of inaccurate and defective design data took place on 4. 6. 1981. 10. 7. 1981 and 14. 8. 1981. 16. 10. 1981 23. 11 81 and 31. 3. 1982. being the dates on which the alleged inaccurate or defective design on which the alleged inaccurate or defective design data was supplied. Thus. according to the learned counsel for the petitioner, in accordance with Article 55 of the Limitation Act, the period of limitation for the second claim expired latest on 30. 3. 1985. the date of supply of the last alleged inaccurate or defective design data. Request for arbitration made on 28. 7. 1987 for this claim also was made after the expiry of period of limitation. The claim, thus. was barred by time limitation. The claim for damages for the alleged delay by the petitioner in installation of Simulator and inadequate facility as set up originally in letter dated 28. 6. 1984 was for US $12,30,000 but through letter dated 4. 11. 1986 was reduced to US $ 7, 40,467. The alleged breach of contract for third claim also. even according to the respondent, took place in November. 1983. The request for arbitration made after the expiry of period of three years undoubtedly was barred by time limitation. Fourth claim is only a consequential claim for interest on claims 1. 2 and 3 for a sum of US $ 10, 43,720 and, thus, w as also barred by limitation since claim for interest w as dependent upon claims 1,2 and 3. which were not within limitation. Fourth claim is only a consequential claim for interest on claims 1. 2 and 3 for a sum of US $ 10, 43,720 and, thus, w as also barred by limitation since claim for interest w as dependent upon claims 1,2 and 3. which were not within limitation. ( 36 ) LEARNED counsel has placed reliance upon number of decisions in support of his submissions and has contended that the stand taken by the respondent that limitation would commence after the failure of negotiations, w hose took place between the parties in June, 1986, is wholly erroneous. ( 37 ) CONTENTION of the learned counsel for the respondent has been that under the Arbitration Act, no appeal lies no merits against an w ard. The only exception is that when there is a mistake of law apparent on the face of the award. In the instant case there is no error of law apparent on the face of the award. As per the w ard. As per the pleadings it is not even a case of a mistake of law approach on the face of the award. Neither any note is appended of the award nor award contains any proposition of law as the basis of arbitrators decision. Since the court is not sitting as a court of appeal over the decision of the arbitrators, and court has not power to substitute its own decision for that of the arbitrators, therefore, the petition is liable to be dismissed. It was further contended on behalf of the respondent that even to find out that whether there is a mistake of law apparent on the face of award- court can look into those documents or evidence only. whether oral or documentary. which are not incorporated in the award and not those which is not incorporated. It would not be permissible under law to refer to the documents and submit to the facts which are not incorporated in the aw ard Submissions, thus, made on behalf of the petitioner on the basis of same records, which do not form part of the aw ard or other documents, which are not incorporated as part of the aw ard deserves to be turned down or ignored ( 38 ) THE alleged dates on which, according to the petitioner, the cause of action arose are not at all incorporated in the aw ard. Learned counsel for the respondents urged that the entire edifice of the peiitioner's case is based on misleading submissions of facts or law. It was contended that in the case of an arbitration the period of limitation w ould arise while in a case of civil action or civil suit, c'uise ('faction is the starling point. In many cases the cause of action and cause for arbitration may stared from different dales but in the case of arbitration what is material is only the cause for arbitration, namtih. when a party is able to invoke arbitration clause. It would be absurd to say that a party is not. in a position to invoke the arbitration clause but still the period of arbitration has commenced to run. It was submitted that cause for arbitration in the instant case arose only after the decision of the Engineer. Petitioner suppressed from the court an important aspect that in case of one single individual and turn-key contract, on account running payments were agreed to be made from time to time. The period of limitation would start running only after submission of the final bills concerning all the claims of the contractor and not no rejection of some of the claims by the owner. It was urged that without prejudice to the submissions that there is no mistake of law apparent on the face of award, that even if there is a mistake of law apparent on the face of the award there cannot be an appeal on merits against the aw ard of the arbitrator "and moreover it is not a case of the petitioner, even according to the pleadings, that there was any mistake of law apparent on the face of the award. The arbitrators correctly decided the point of limitation holding the claims of the respondent to be within period of limitation from the date when cause for arbitration arose on rejection of the claims by the petitioner's Engineer. ( 39 ) IN State of Rajashthan v. Prui Construction Co. The arbitrators correctly decided the point of limitation holding the claims of the respondent to be within period of limitation from the date when cause for arbitration arose on rejection of the claims by the petitioner's Engineer. ( 39 ) IN State of Rajashthan v. Prui Construction Co. Ltd, and another, 1994 - 6 SCC 485, after considering catena of judicial decisions on the point, the Supreme Court held that an erroneous decision of a court of law is open to judicial review by way of appeal or revision in accordance with provisions of law, similarly an award rendered by an arbitrator is open to challenge but within the parameters of several provisions of the Arbitration Act. Since the arbitrator is a judge by choice of the parties and more often then not a person with little or no legal background, the adjudication of the disputes by an arbitrator by w ay of an ward can be challenged only within the limited scope of several provisions of the Arbitration Act and the Legislature in its wisdom has limited the scope and ambit of challenge to an award in the Arbitration Act. Judicial decisions over decades have indicated the parameter of such challenge, consistent with the Courts have disfavoured interference with the arbitrators award on account of error of law and fact on the score of misapprehension and misreading of the material on record and have shown definite inclination to preserve the award, as far as possible. The Court reiterated the follow ing principles to be kept in mind in case where legality of award is under challenge: "over the decades Judicial decisions have indicate the parameters of such challenge consistent with the provisions of the Arbitration Act. By and large the courts have disfavoured interference with arbitration aw ard on account of error of law and face on the score of misapprehension and misreading of the materials on record and have shown definite inclination to presen e the award as far as possible. As reference to arbitration of disputes in commercial and other transactions involving substantial amount has increased in recent times, the courts were impelled to have fresh look on the ambit of challenge to an award by the arbitrator so that the award does not get undesirable immunity. As reference to arbitration of disputes in commercial and other transactions involving substantial amount has increased in recent times, the courts were impelled to have fresh look on the ambit of challenge to an award by the arbitrator so that the award does not get undesirable immunity. In recent times, error in law and fact in basing an award has not been given the wide immunity as enjoyed earlier, by expanding the import and implication of "legal misconduct" of an arbitrator so that award by he arbitrator does not perpetrate gross miscarriage of justice and the same is not reduced to mockery of a fair decision of the its between the parties to arbitration. Precisely for the aforesaid reasons, the erroneous application of law constituting the - very basis of the award and improper and incorrect findings of fact. which without closer and intrinsic scrutiny, are demonstrable on the face of the materials on, record, have been held. very rightly, as legal misconduct rendering the award as invalid. It is necessary, however, to put a note of caution that in the anxiety to render justice to the party to arbitration, the court should not reappraise the evidences intrinsically with a close scrutiny for finding out that the conclusion drawn from some facts, by the arbitrator is, according to the understanding of the court, erroneous. Such exercise of power which can be exercised by an appellate court with power to reverse the finding of fact. is alien to the scope and ambit of challenge of an award under the Arbitration Act. Where the error of finding of facts having a bearing on the aw ard is patent and is easily demonstrable without the necessity of carefully weighting the various possible view points, the interference with award based on erroneous finding of fact is permissible. Similarly, if an award is based by applying erroneous, and but for such erroneous application of legal principle, the award could not have been made, such aw ard isliable to be set arise by holding that there has been a legal misconduct on the part of the arbitrator. In ultimate analysis, it is a question of delicate balancing between the permissible limit of error of law and fact and patently erroneous finding of law forming the basis of the award which is patently erroneous. In ultimate analysis, it is a question of delicate balancing between the permissible limit of error of law and fact and patently erroneous finding of law forming the basis of the award which is patently erroneous. It may be indicated here that however objectively the problem may be viewed, the subjective element inherent in the Judge subjective element inherent in the judge deciding the problems, is bound to creep in and influence the decision. By long training in the art of dispassionate analysis, such subjective element is, however, reduced to minimum. " ( 40 ) KEEPING in view of aforesaid principles in mind and with reference to the other judicial decisions on the subject, the grounds for challenge to the validity of the impugned award deserves to be considered. ( 41` ) UNDOUBTEDLY the Court has not jurisdiction to investigate into the merit of the case and to examine the documentary, and oral evidence on the record for the purpose of finding out whether or not the arbitrator has committed an error of law. The award of the arbitrator can be sent aside only on the ground of error of law on the face of aw ard, when as for instance a note appended by the arbitrator stating the reasons for his decision, there is found some legal proportion which is the basis of the award and which is erroneous. Reference for this proportion may be made to a decision of the Supreme Court in Union of India v. Bungo Stem Furniture Private Ltd. AIR 1967 SC 1032 . ( 42 ) THE submission made by the learned counsel for the petitoner that the contract or the clauses of the contract are incorporated in the aw ard, therefore, it will be permissible to make reference to the contract as a whole will have to be examined in the light of the ration of the decision of the Supreme Court in M/s. Alle Berry and Co. Private Ltd. v. The Union of India, AIR 1971 SC 696 . It was held that the question that whether a contract or clause of it is incorporated in the award is a question of construction of the award. The test would be did the arbitrator came to a finding on the wordings of the contract. It he do, he can be said to have impliedly incorporated the contract or a clause in it. The test would be did the arbitrator came to a finding on the wordings of the contract. It he do, he can be said to have impliedly incorporated the contract or a clause in it. whichever is the case. But a mere general reference to the contract in the aw ard is not to be held as incorporating it. The principle of reading contracts or other documents into the award is not to be encouraged or extended. The general rule is that as their parties choose their own arbitrator to be the Judge in the dispute between them, they cannot, when the aw ard is good on the face of its, object to the decision either upon the law or the facts. Even when an arbitrator commits a mistake either in law or in fact in determining the matters refereed to him, but such a mistake does not appear to or incorporated in it so as to form part of it, the aw ard will neither be remitted, nor set aside notwithstanding the mistake. ( 43 ) IN the instant case. whether the document's referred to by the learned counsel for the petitioner in support of his submission on challenge to the award on the ground of legal misconduct of the arbitrator, can be said to have been incorporated in the award ? The answer to this can be ban on making a reference to the contents of the aw ard. There is no documents appended to the award. The award, how ever, makes reference to some of the documents. It has recorded the submission made on behalf of the petitioner that the entire claims of the respondent are barred by time limitation pursuant to Indian Arbitration Act and Indian Limitation Act. The aw ard also records the propositions which w ere put forward on behalf of the petitioner that the starting point of the period is the accrual of the cause of action and that under the Limitation Act, the cause of action and that under the Limitation Act, the cause of action accrues when the contract is broken, even though the loss may not accrue until later. The aw ard further incorporates the submission and the distinction which was drawn on behalf of the petitioner between the accrual of cause of action and the arising of a dispute. The aw ard further incorporates the submission and the distinction which was drawn on behalf of the petitioner between the accrual of cause of action and the arising of a dispute. The award further states that the petitioner tabulated the alleged claims, the date of lodgement of such claims by the respondent with the petitioner, the date of the alleged breach (being in all cases dates before the tabulated lodgement of claim) and the date (3 years later of the alleged expiry of the limitation period ). The award states that pursuant to the contract decision of the Engineer is a precondition for resort to arbitration, which is a contractual condition which has no connection with the limitation prescribed for the commencement of arbitration. ( 44 ) AFTER noticing various noticing various submission made on behalf of the petitioner, the award also incorporates the respondent's submission that the cause of arbitration arises only when the claimant acquires a right to require arbitration and according to the contract this can only be after the parties have exhausted the possibility of amicable settlement, the process of reference to Engineer for his decision and rejection by the Engineer. On this basis claimant's contention has been recorded that the reference to arbitration was within the required period of limitation. The award has also referred to Clauses 26. 2 and 27 of the Contract on which reliance was placed on behalf of the respondent in support of its submissions. ( 45 ) AFTER referring to the above submissions amongst others the award says that the Tribunal has taken note of all the arguments put forward by the parties and the authorities which have been quoted and then recorded its reasons in holding that the period of limitation under Indian Limitation Act is three years from the date from which such period begins to run and that all claims made by the respondent were within period of limitation as on 30. 7. 1987 when request for arbitration was made which would be the dale of commencement of the arbitration proceedings. The reasons as recorded in the award may be quoted as under: "the Tribunal have taken note of all the arguments put forward by the parties and of the many authorities which have been quoted. 7. 1987 when request for arbitration was made which would be the dale of commencement of the arbitration proceedings. The reasons as recorded in the award may be quoted as under: "the Tribunal have taken note of all the arguments put forward by the parties and of the many authorities which have been quoted. They have had regard to the purpose of the laws of limitation; (i) to provide some limit to the uncertainties and expense of arbitration and litigation; (ii) to facilitate the obtaining of material evidence; and (iii) to facilitate the settling of accounts for each transaction as and when they fall due (per Lord Denning ). The whole tenor of this contract is, typically in the construction industry, to provide for continuing discussion, negotiation and resolution by the Engineer of claims for money or time in accordance with the contract, leading up to the Final Account for the works. The Tribunal cannot accept that, simply because a contractor puts in a claim for additional payment for extra or changed work or for compensation for delay caused by the employer or similar matters, a limitation period immediately starts to run in respect of such a claim. This would be a complete negation of the terms of this type of contract, while the contractual provisions are being followed-certainly not unless the claimant acts in an unduly dilatory way with regard to his claims, which has not been the case with regard to this contract. The Tribunal have noted the terms of Clause 22 of the General Conditions which provides for the enticement of the Contractor to extension of time and payment of compensation to be mutually agreed) if the Contract is delayed by any act or omission on the part of the Owner, and Clause 49. 1 which provides that all payments made during the contract shall be on account payments only. The final payment will be made on completion of all the works and on fulfilment by Contractor of all his liabilities under the contract. This is the Final Account, and if the Owner refuses to pay the amount finally claimed, this will constitute an allegable breach of contract. In the present case the works were completed on 1 st February 1986. The Respondent then considered the claims and indicated that it was not minded to accept them. In accordance with Clause 26. This is the Final Account, and if the Owner refuses to pay the amount finally claimed, this will constitute an allegable breach of contract. In the present case the works were completed on 1 st February 1986. The Respondent then considered the claims and indicated that it was not minded to accept them. In accordance with Clause 26. 2 various negotiations took Place culminating in the meeting on 1st July 1986. After the conclusion of that meeting the Respondent telexed to the President of the Claimant company "we now request your President replied that since the Respondent apparently had no intention of reaching a reasonable settlement of the claims, the Claimant had no alternative but to pursue its rights under the contract. The Claimant then referred the claims as disputes to the Engineer for decision, on 4th November. 1986. All of these procedures were carried out by both parties in accordance with the contract and the matters giving rise to the Claimant's original claims cannot therefore be termed a breach of contract giving rise to a cause of action. Accordingly the Tribunal has decided that the reference to Arbitration on 30th July 1987 was well within the limitation period prescribed by Indian law. and the Claimant's claims are not barred by time limitation under Indian law. The period of limitation under the Indian Limitation Act, 1963. is three years from the time from which such period begins to run. "( 46 ) THE quoted portion of the award, as also the submissions made on behalf of the respondent as incorporated in the award on the fact of it would suggest that not only various clauses e. g. Clauses 22,26. 2 and 27 w ere specifically referred to by the arbitrators in their award but it also by necessary implication incorporates the tabulated data which w as supplied by the petitioner. The relevant portion of the award reads: "the respondent tabulated the various alleged claims, the date of lodgement of such claims by the Claimant with all the Respondent, the date of the alleged breach (being in all cases dates before the tabulated lodgement of claims) and the date (three years later) of the alleged expiry of the limitation period. " ( 47 ) AS noticed above in Allen Berry's case. " ( 47 ) AS noticed above in Allen Berry's case. the question whether a contract or a clause of it is incorporated in the aw ard is a question of construction o the award. The test is; does the arbitrator came to a finding on the wording of the contract? If he had done so he can be said to have impliedly incorporated the contract or a clause in it, which even be the case, but a mere general reference of the contract in the aw ard is not to be held to be incorporating it. ( 48 ) APPLYING the ratio in Allen Berry's case (supra) there is no manner of doubt that not only various clauses of the contract but also the documents, which were filed by the petitioner, more particularly the tabulated statement were incorporated in the award. As such it will not be impermissible for this Court to refere to the Clauses of the referred to in the impugned award. The tabulated statement which the petitioner submitted and which is referred to in the award is as follows: S. 2958-G/89 SL. DESCRIPTION OF date OF date OF statutory NO. ALLEGED CLAIMS lodging alleged period OF M/s SINGER CO. CLAIMS breach of LIMITATION THE CLAIMNT by THE expired ON singer CO. WITH defendant 1 2 3 4 5 1. . Amount of claims singer Co. s 14-8-81 14-8-84 150 US $ 820. 000 on letter dt. account of late 1-10-81 and receipt of design dt 5-5-82- date and ntpc rejected advance payment the same from NTPC. the vide its defendants, letters dt. 20-11-81 3. 5. 82 and 26. 7. 82. 2 Amount of Claim singer Co. 's 4-6-81 Us $ 476,000 on letter dated 10. 7. 81 account of inacc- 9-6-83 14. 8. 81 urate and defici- ntpc replied, 6-10-81 sent design data vide letter 23-11-81 supplied by NTPC 23-6-83 31-3-82 the Defendant rejecting the claim. 3. Amount of claim singer Co. 's US$1. 230,000 - cable/letter on account of dt 26-9-84 delay install- ntpc rejected claim- nov. 83 Nov. 86 tion of the simulator and vide letter due to inadquate dated facilitiy at sil. 26-12-86 reduced to US $740,467 as per Singer Co's Solicitor letter dt. 4-11-86 4. Amount of Claim singer Co. 's as the claim of US$1. 043. 720. Solictor interest is on on account of letter dt. 83 Nov. 86 tion of the simulator and vide letter due to inadquate dated facilitiy at sil. 26-12-86 reduced to US $740,467 as per Singer Co's Solicitor letter dt. 4-11-86 4. Amount of Claim singer Co. 's as the claim of US$1. 043. 720. Solictor interest is on on account of letter dt. aforesaid claims interest due 4-11-86, NTPC 1,2 and 3 which above. etenstion rejected claim are patently of sureteis. vide letter time barred sub-contractor dt. 26. 12. 86 there can be no interest when the and agent's principal amounts commission are not due. ( 49 ) WHETHER the arbitrators committed a mistake either in law or in fact in determining the matters of that the mistake is apparent on the fact of the aw ard, is dependent on the answer to question: Is the award based by applying a priciple of law which is patently orroneous and but for such erroneous application of legal principles the award could not have been made ? Such an award is patently erroneous would be liable to be set aisde, in terms of the legal prpostion stated in Prui Construction's case (supra) that there has been a lagal misconduct on the part of the arbitratior. Since the aw ard has referred to various clauses of the contract, it will be necessary to quote those terms, with a view to answer the question which has been posed. ( 50 ) AMONGST other clauses referred to in the award are clauses 22, 26,27 has already been quoted above. Relevant extract of clauses 22,26 and 49 reads: "22. 0 DELAY BY OWNER OR HIS AUTHORISED AGENTS 22. 1 In case the Contractors performance it delayed due to any act of omission on the part of the Owner or his authorised agents, when the Contractor shall be given due extention of time for the completion of time for the completition of the Works, to the extent such omission on the part of the Owner has caused delay in the Contractor's performance of his work. Regarding reasonableness or otherwise of the extension of time, the decision of the Engineer shall be final. 22. 2 In addition, the Contractor shall be entitled to claim demonstrable and reasonable - compensation if such delays have resulted in any increase in the cost. Regarding reasonableness or otherwise of the extension of time, the decision of the Engineer shall be final. 22. 2 In addition, the Contractor shall be entitled to claim demonstrable and reasonable - compensation if such delays have resulted in any increase in the cost. The Owner shall examine the justification for such a request for claim, and if statisfied, the extent of compensation shall be mutually agreed depending upon the circumstances at the time of such an occurrence. " "26. 0 SETTLEMENT OF DSPUTE 26. 1 Except as otherwise specifically provided in the Contract all disputes concerning questions of fact arising under the Contract shall be decided by the Engineer subject to a written appeal by the Contractor to the Engineer, whose decision shall be final to the parties hereto. 26. 2 Any disputes or difference including those considered as such by only one of the parties arising out of or in connection with the contract shall be to the extent possible settled amicably between the parties. 26. 3 If amicable settlement cannot be reached then all disputed issues shall be settled by arbitration as provided in clause 27 below". "49. 0 PAYMENT 49. 1 The payment to the Contractor for the performance of the Works under the Contract will be made by the Owner as per the guidelines and conditions specified herein. All payments made during the Contract shall be on account payments only. The final payment will be made on completion of all the Works and on fulfilment by the Contractor of all his liabilities under the Contract. 49. 2 CURRENCY OF PAYMENT The payments for the foreign currency portion of the ContractPrice will be made in the currency of the bid. If the bid is in a currency under than that of the country of origin of goods, pay merit may be made in an amount equivalent to the bid price in the currency of the country of origin. The Indian Rupee portion of Contract Price stated in the Contractor's bid will be paid in Indian rupees. 49. 3 DUE DATES OF PAYMENT Owner will make progressive payment as and when the payment is due as per the terms of payment setforth in the accompanying Technical Specifications,. The Indian Rupee portion of Contract Price stated in the Contractor's bid will be paid in Indian rupees. 49. 3 DUE DATES OF PAYMENT Owner will make progressive payment as and when the payment is due as per the terms of payment setforth in the accompanying Technical Specifications,. Paymetn other than that under the Letter of Credit will become dut and payable by the Owner within thrity (30) days from the date of receipt of contractor's bill/invoice/debit note by the Owner, provided the documents submitted are complete in all respects. 49. 4 PAYMENT SCHEDULE The Contractor shall prepare and submit to the Engineer for approval, a breakdown ofthe Contract Price. This Contract Price. This Contract Price breakdown shall be inter linked with the agreed detailed PERT network ofthe Contractor setting forth his starting and completion dates for the various key phases of Works prepared as per condition in clause 10 of this section of Volume 1. Any payment under the Contract shall be made only after the contractor's price breakdown is approved by the Engineer. Theaggregate sum ofthe Contractor's price breakdown shall be equal to the lump sum contract price. 49. 5 APPLICATION FOR PAYMENTS 49. 5. 1 The Contractor shall submit application for the payment in the prescribed proforma of the Owner. Proforma for application for payment is enclosed as Annexure-H to this Section GCC of this Volume I. The foreign Contractor shall submit to the Engineer separate applications for payment in different currencies whenever pay ment is to be made in more than one currency. 49. 5. 2 Each such application shall state the amount claimed and shall set forth in detail, in the order ofthe Payment Schedule, particulars ofthe Works including the Works executed at Site and of the equipment shipped/brought on to the Site pursuant of the Contract upto the date mentioned in the application and for the period covered since the last preceding certificate, it any. 49. 5. 3 Every interim payment certificate shall certify the Contract value of the Works executed upto the date mentioned in the application for the payment certificate, provided that no sum shall be included in any interim payment certificate in respect ofthe Works that, according to the decision ofthe Engineer, does not. comply with the Contract, or has been performed, at the date of certificate prematurely. " . comply with the Contract, or has been performed, at the date of certificate prematurely. " . ( 51 ) THE Arbitration Tribunal has proceeded on the basis that work was completed on 1. 2. 1986 and final payment was to be made on completion of all works and on fulfilment by the Contractor of all his liabilities under the contract. If the Owner refused to pay the amount finally claimed, the same alone will constitute an alleged breach of contract. The Tribunal also proceeded on the basis that in accordance with Clause 26. 2 various negotiations took place culminating in a meeting of 17. 1986 and after conclusion of the meeting the petitioner telexed to the President of the respondent Company "we now request your proposals for settling the issue" and the President of respondent Company replied that since the petitioner had no intention of reaching a reasonable settlement of the claims the respondent had not alternate but to pursue its remedy under the contract by approaching the Engineer on 4. 11. 1986. The decision arrived at by the Engineer amount being satisfactory, necessity arose to make a request for arbitration, therefore, the claims were within period of limitation. ( 52 ) THIS approach of the Tribunal to the facts of the case is based on application of principles of law which are patently erroneous. The nature of the claims, as have been noticed in the award and as reproduced above, on the face of it suggests and it is also the case of the respondent that the claims arose out of breach of the contract i. e. beach of the contractual obligations. The only relevant provision in the Limitation Act, 1963, which is applicable, is Article 55 pertaining to the claims for compensation for breach of any contract, express or implied, not specifically provided for in the Limitation Act. It is a residuary article in respect of claims of contract and is applicable only when no other Article is applicable and it reads:"55. 'for compensation for the breach of any contract, express of implied not herein specifically provided for. Three Years. When the contract is broken or (where there are successive breaches) when the breach in respect of which the suit is institute occurs or (Where the breach is continuing) when it ceases. " ( 53 ) THIS Article 55 in Limitation Act. 'for compensation for the breach of any contract, express of implied not herein specifically provided for. Three Years. When the contract is broken or (where there are successive breaches) when the breach in respect of which the suit is institute occurs or (Where the breach is continuing) when it ceases. " ( 53 ) THIS Article 55 in Limitation Act. 1963 is a combination of Articles 115 arid 116 in the Limitation Act of 1908. The distinction between contracts in writing registered and other contracts was removed by combining Articles 115 and 116 into one Article 55 and uniform period of limitation of 3 years was prescribed for them. Period of limitation of six years in the case of written and registered contracts as w as provided in Article 116 under 1908 Limitation Act stood reduced to three years in 1963 Act. ( 54 ) SUPREME Court in National Bank of Lahore Ltd. v. sohan Lal Saigal and others, AIR 1965 SC 1663 , held that when there is a clear allegation in the plaint that the respondent breach of contract in not complying with some of the conditions thereof in not coplmpying with some of the conditions thereof the suit claim being ex contract will clearly be governed by Article 115 of the First Schedule of Limitation Act. 1908 and not by any other Articles. In other words, for a claim founded on breach of contract or contractual obligation, the period of limitation will be three years from the date when the contract in broken. In Mrs. Margaret Lalita Samuel v. The Indo Commercial Bank Ltd. . 1979 (2) SCC 396 . it was held that limitation would only run from the date of the breach under Article 115 of the Schedule to the Limitation Act, 1908 when it is a case of breach of contract. ( 55 ) THE award in clear terms also records the foundation of the respondent's four claims as under;"claims DEFENCES AND COUNTERCLAIMS 10. it was held that limitation would only run from the date of the breach under Article 115 of the Schedule to the Limitation Act, 1908 when it is a case of breach of contract. ( 55 ) THE award in clear terms also records the foundation of the respondent's four claims as under;"claims DEFENCES AND COUNTERCLAIMS 10. The Claimant alleges (a) that the Respondent failed in its contractual obligation to provide all design data for the simulator by the required date and that this failure resulted in increased cost of performance by the Claimant; (b) that because of the said delay in furnished data a period of eight months was wasted which resulted in a financial loss to the Claimant of US $825,000, which the Respondent is liable to pay to the Claimant; (c) that negotiations took place between the Parties as a result of which its was ' agreed that the Claimant would withdraw this claim in exchange for a six months extension of the contract schedule, but that this agreement was based upon the fundamental understanding that the problems with regard to supply of data by the Respondent would not continue in the future, that the said problems did continue and that the Claimant is therefore entitled to reinstate this claim; (d) that the continued late delivery of accurate and consistent data caused the Claimant to incur increased costs because of major rework to the simulator panels; (e) that for the same reasons the Claimant was involved in the design and fabrication of mounting plates and modification of the structure; (f) that the Claimant had to design and build bezels for the mounting of instruments because bezels were not supplied with the equipment; (g) that this delay caused by the Respondent amounting to four months, with additional design and fabrication effort, entitles the Claimant to claim US 76,000 and four months schedule extension; (h) that both from the date of delivery of the simulator on 22nd March, 1984, the Claimant experienced additional delays and increased cost due to the simulation facility not being ready for installation of the simulation equipment in addition to other problems as fully described in the Request for arbitration, pages 14,15 and 16 and that this entitles the Claimant to claim US 740,467 and schedule extension of 6 months; (i) that in addition to the aforesaid three claims for money and time the Claimant is entitled to claim a further sum of US 1,043,720. " ( 56 ) IT will not be impermissible for the Court also to refer to the letter of request, namely, claim petition preferred by the respondent before ICC. The entire basis therein for the claims is the breach of contract. The award also says that it is a breach of contract but it further says that the breach would occur only when on submissions of the final bill there is a fusal on the part of the petitioner to make payment and not at any point earlier than that. The claim in sot based upon such a breach. The first claim is for delay of 8 months which occurred in furnishing the data which w as to be furnished upto a particular date, as per terms of the contract. The second claim is due to the inaccurate and deficient design data supplied by the petitioner to the respondent. The third claim is on account of the delay in installation of the simulator and due to inadequate facility provided at the sites. ( 57 ) THE other documents, to which reference has been made in the tabulated statement furnished by the petitioner cannot be looked into, since the same are not referred to or incorporated in the award, but there is no denial and it was not disputed during the course of arguments that the respondent for the first, second and third claims, for the first time on 1. 10. 1981,9. 6. 1983 and 26. 9. 1984 respectively lodged its claim with the petitioner. There is also no dispute that the petitioner though letters dated 20. 11. 1981, 23. 6. 1983 and 26. 12. 1986 conveyed to the respondent its decision of rejecting the claims. The breach of the terms of contract, which is alleged and is the foundation for the first claim is of 14. 8. 1981. For the second claim the base is the breach of the terms of contract which occurred on4. 6. 1980,10. 7. 1981,14. 8. 1981,16. 10. 1981,23. 11. 1981 and 31. 3. 1982 and for the third claim for the loss due to the delay, the breach of the terms occurred in the month of November 1983. ( 58 ) IN case breaches of the terms of contract had occurred on the aforementioned dates, for which the claims were lodged by the respondent with the petitioner on the aforementioned three different dates, namely, 1. ( 58 ) IN case breaches of the terms of contract had occurred on the aforementioned dates, for which the claims were lodged by the respondent with the petitioner on the aforementioned three different dates, namely, 1. 10. 1981,9. 6. 1983 and 26. 6. 1984 and which claims were specifically rejected by the petitioner and duly conveyed to the respondent admittedly on20. 11. 1981,23. 6. 1983 and 26. 12. 1986 respectively; in terms of the provisions of Article 55 the cause of action for laying the claims arose to the respondent on the respective dates of the alleged breaches. For the first claim on 14. 8. 1981; for the second claim at the most taking the last date when the breach of the term occurred, namely, on 31. 3. 1982; and for the third claim in November, 1983. Had there been no provision in the contract for going to arbitration for settlement of the claims, the respondent could not have filed a suit in a competent court of law in India after the expiry or the period of three years form the date when cause of action arose, which suit if filed would be liable to be dismissed under Article 3 of the Limitation Act. In case the remedy to claim compensation came to an end on the expiry of the period of three years from the date of the alleged breaches, namely, on 14. 8,1984 31. 3. 1985 and November, 1986 respectively for the three claims, the submission on behalf of the respondent that the period of limitation would be saved because of the specific provision in the contract for having resort to the arbitration cannot be accepted. ( 59 ) IT was urged that since request was made to the Engineer to take a decision only in the letter dated 4. 11. 1986 and the Engineer took decision on 26. 12. 1986, right accrued to the respondent to seek arbitration only thereafter, therefore, bar of limitation would not apply. It is wholly an erroneous submission, which cannot be accepted. Nothing prevented the respondent from making a request to the Engineer immediately after the breaches had occurred or at least immediately after the petitioner had rejected the respondent's claim to approach the Engineer with the claims. It is wholly an erroneous submission, which cannot be accepted. Nothing prevented the respondent from making a request to the Engineer immediately after the breaches had occurred or at least immediately after the petitioner had rejected the respondent's claim to approach the Engineer with the claims. In case the respondent would not have been satisfied with the Engineer's decision it had its remedy to take resort to the arbitration clause by seeking a reference on the disputed claims. In so far as the reference to arbitration is concerned the same was not bad by reason of not being made within the lime prescribed by the contract. Right to seek reference would arise only after a decision is rendered by the Engineer on a request being made in terms of Clause 27 of the Contract. Petition could have, been filed by the respondent or a request could have been made for seeking a reference. Plaintiff did not agitate this matter and that is not a question before this court. The question before this court is the time limit for the claims preferred by the respondent. In case a regular suit for the claims cannot be filed in a court of law after the expiry of period of three years form the date of the occurrence of the breach, for compensation, it cannot be said that a different period of limitation would be applicable where there is a provision for arbitration, to lodge a claim and seek arbitration, after the expiry of the period of limitation. Claim ought to have been lodged and request for arbitration ought to have been made within a period of three years from the date of the occurrence of the breach. The decision of the arbitrators on the question of limitation, thus, is due to erroneous proposition of law. Since the award is based on applying principle of law which is patently erroneous and but for such erroneous application of legal principle the aw ard could not have been made, the petition would be liable to be allowed and that part of the award holding that-neither whole, nor any part of the claims are barred by time limitation, under law of India is liable to be set aside ( 60 ) THE other points urged on behalf of the respondents stood decided, as noticed as noticed as noticed above, by an order passed on 6. 4. 1995. 4. 1995. The only point which now remains to be decided is the submission made on behalf of the respondent that the petition for setting aside the aw ard is. malafide and is liable to be dismissed. It w as contended that the petitioner filed this petition just to delay the arbitration proceedings, with a view to tire out the respondent so that the respondent may be deprived of the fruits of a lawfully instituted proceedings and, thus, there is malice in law. There is no challengeable aw ard and the aw ard had not been properly filed. Earlier orders passed in this case Ire only interlocutory and these objections can still be urged by the respondents. . ( 61 ) THESE objections raised on behalf of the respondents are also not tenable in view of the earlier two orders,- one passed on 6. 4. 1995 and the other by rendering of an earlier decision, which has now become final by the decision, which has now become final by the decision of the Supreme Court reported as National Thermal Power Corporation v. The Singer Company and others, AIR 1993 SC 998 . ( 62 ) CONSEQUENTLY the petition is allowed That part of the impugned award, annexure P-l dated 9. 8. 1989, which holds that neither the whole, nor any part of the respondent's claims are barred by time limitation under law of India is quashed and set aside. Parties are left to bear their respective costs.