The Rajasthan High Court has clarified that the contractual term 'either side' does not equate to 'both sides', reinforcing the principle that arbitral awards on contractual interpretation are entitled to deference unless misconduct is proven. The judgment also reiterates the strict limits on condoning delay in challenging arbitral awards under the Arbitration Act, 1940.
Background & Facts
The Dispute
The dispute arose from two separate but identical contracts awarded by the Union of India, through the Central Public Works Department, Jaisalmer, for the construction of security fencing along the Indo-Pak border in Rajasthan. The contracts covered fencing from Pillar No. 313 to 316 and from Pillar No. 316 to 318, both issued in 1991-92. The respondent, V.S. Saini, an engineer garment contractor, was awarded the contracts after tendering. The contracts specified that every tenth post, end post, and corner post was to be strutted with M.S. Angle Iron Struts on 'either side'.
Key Facts
- Contract for Pillar No. 313 to 316: Commenced 19.10.1991, completion date 01.01.1992
- Contract for Pillar No. 316 to 318: Commenced 03.10.1991, completion date 16.12.1991
- The contract documents (Clauses 1, 2, and 3) required strutting with M.S. Angle Iron Struts on 'either side' of specified posts
- The respondent claimed additional work: installation of M.S. Angle Iron Struts on both sides (Claim No. 1) and supply of M.S. Flats (Claim No. 2)
- The appellant contended that 'either side' meant both sides and that M.S. Flats were the respondent’s responsibility
- Document R-15 dated 12.09.1991, executed by the respondent, confirmed agreement to supply M.S. Spikes but contained no mention of M.S. Flats
- Drawings on record (Page 41) showed struts on both sides; Page 128 showed struts on one side only
Procedural History
- 22.02.1996: Sole Arbitrator, Shri S.S. Juneja, issued awards allowing Claim Nos. 1 and 2, awarding interest at 14% per annum from 21.06.1995
- 26.03.1996: Appellant received notice of the awards
- 20.07.1996: Appellant filed objections under Section 30 of the Arbitration Act, 1940 - 117 days after receipt of award
- 20.07.1996: Application under Section 5 of the Limitation Act, 1963 filed seeking condonation of delay, citing change of government and delayed administrative sanctions
- 09.09.2005: District Judge, Sri Ganganagar, dismissed objections and application for condonation of delay, and made the awards rule of the Court
- 18.04.2026: Arguments concluded before Rajasthan High Court
- 30.04.2026: Judgment pronounced
Relief Sought
The appellant sought to set aside the arbitral awards dated 22.02.1996 and the District Judge’s order dated 09.09.2005, on grounds of: (1) misconduct by the Arbitrator in interpreting 'either side' as one side; (2) improper award of cost for M.S. Flats; and (3) erroneous refusal to condone 117-day delay in filing objections.
The Legal Issue
The central questions were: (1) Does the contractual term 'either side' mean one side or both sides? (2) Can delay in filing objections under Section 30 of the Arbitration Act, 1940 be condoned on grounds of administrative delay due to change of government? (3) Is the Arbitrator’s interpretation of contract terms a ground for setting aside the award?
Arguments Presented
For the Appellant
The appellant argued that the word 'either' in the contract must be interpreted as 'both sides', citing dictionary definitions and drawings on Page 41. It contended that the Arbitrator committed misconduct by ignoring this meaning and by awarding costs for M.S. Flats, which, it claimed, were the respondent’s responsibility under the revised agreement. It further argued that the 117-day delay in filing objections was due to administrative delays caused by a change in government, and that Section 5 of the Limitation Act should have been applied to condone the delay.
For the Respondent
The respondent argued that 'either' in legal and contractual context means 'one or the other of two', not 'both'. He relied on the Bombay High Court’s decision in Sadruddin Suleman Jhaveri v. J.H. Patwardhan and the drawing on Page 128, which depicted struts on a single side. He submitted that the contract explicitly stated M.S. Flats were to be supplied by the Department free of cost, and the document R-15 confirmed only M.S. Spikes were transferred to him. He further argued that delay in filing objections by a government entity cannot be condoned without specific, documented evidence of administrative steps taken, and that the 117-day delay was unexplained and inexcusable.
The Court's Analysis
The Court undertook a detailed textual and contextual analysis of the word 'either' as used in Clauses 1, 2, and 3 of the contract. It referenced Black’s Law Dictionary and the Shorter Oxford English Dictionary, noting that 'either' can mean 'one of two' or 'each of two', depending on context. The Court placed decisive weight on the Bombay High Court’s interpretation in Sadruddin Suleman Jhaveri v. J.H. Patwardhan, which held that 'either' in the phrase 'either of the preceding sub-sections' meant 'each of the two', not 'both'. The Court observed:
"The word 'either' does not necessarily include both. Its meaning must be derived from the context in which it is used."
The Court found that if the appellant intended struts on both sides, it would have used the unambiguous term 'both sides'. The presence of conflicting drawings - one showing single-side struts and another showing double-side - rendered the term ambiguous. The Court emphasized:
"When the terms of the contract are capable of more than one interpretation and the learned Arbitrator has adopted one of the possible and plausible interpretations, the same, by itself, cannot be a ground for interference with the award."
Regarding Claim No. 2, the Court noted that the contract explicitly stated M.S. Flats were to be supplied by the Department free of cost. The document R-15 dated 12.09.1991, submitted by the appellant itself, confirmed only M.S. Spikes were transferred to the respondent. No document indicated any agreement to transfer responsibility for M.S. Flats. The Court held the Arbitrator’s finding was fully supported by documentary evidence.
On the issue of delay, the Court held that Section 30 of the Arbitration Act, 1940 mandates a strict 30-day limitation period. The appellant’s explanation - that administrative sanctions were delayed due to a change in government - was deemed insufficient. The Court cited Bhagawati Oxygen Limited v. Hindustan Copper Limited to affirm that government entities enjoy no special privilege in limitation matters. The absence of specific details regarding when, how, and why sanctions were delayed rendered the Section 5 application legally inadequate.
The Court reiterated the limited scope of judicial review under Section 30: interference is permissible only for misconduct, improper procurement, or invalidity - not for erroneous interpretation or perversity. The Arbitrator’s award was neither arbitrary nor irrational, and the District Judge correctly declined to interfere.
The Verdict
The appeals were dismissed. The arbitral awards dated 22.02.1996 and the District Judge’s order dated 09.09.2005 were upheld. The respondent is entitled to the awarded amounts under Claim Nos. 1 and 2, including interest at 14% per annum from 21.06.1995 until payment. No costs were awarded. The records were directed to be sent back forthwith.
What This Means For Similar Cases
Contractual Ambiguity Favors the Arbitrator’s Interpretation
- Practitioners must draft contracts with unambiguous terms - 'either side' is legally distinct from 'both sides'
- Arbitrators’ interpretations of ambiguous contractual language are protected unless they are irrational or capricious
- Courts will not substitute their own view for that of the arbitrator merely because another interpretation is plausible
Delay in Arbitration Challenges Is Not Excused by Administrative Inertia
- Government entities must document administrative delays with precision - vague claims of 'change of government' are insufficient
- Section 5 applications must specify: (a) when the delay began, (b) what steps were taken, and (c) when and why the delay ended
- Arbitration law demands rigor in limitation compliance - no leniency for public bodies
Documentary Evidence Trumps Oral or Assumed Intent
- Where contracts are silent or ambiguous, the burden lies on the party asserting additional obligations to prove agreement
- Internal documents, even those submitted by the opposing party, are decisive in establishing contractual intent
- Claims for additional work must be supported by contemporaneous written agreements - post-hoc assertions are not sufficient
