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Head Note

Arbitral Award  - Contract

Subcontract - Liability of main contractor - Existence of 'back to back clause' - Nothing presented before Court suggests that 'S's contract with the Appellant provided for "back to back" subcontracts whereby 'S' would be directly answerable for the payment claims raised by contractors - That subletting was provided for by the main contract, and indeed occurred - This however, is quite distinct from concluding that 'S' contractually (in the main agreement) assumed primary liability for the Subcontractor-Respondent's payment claims in respect of agreements made with the AppellantContractor - Fact that the Respondent was represented and present in parleys and meetings between 'S' and the Appellant or that it was referred to in the correspondence exchanged between them does not lead to the conclusion that a Tripartite contract had come into effect by evolution.

Arbitral Award  - Contract

Subcontract - Liability of main contractor - Existence of 'back to back clause' - Such an accommodation or transference of liability needs to be pinpointed in the main contract, for it is 'S's acceptance of liability of subcontractor claims which is of the essence - That subletting was provided for by the main contract, and indeed occurred - This however, is quite distinct from concluding that 'S' contractually (in the main agreement) assumed primary liability for the Subcontractor-Respondent's payment claims in respect of agreements made with the Appellant-Contractor.

The Arbitration and Conciliation Act, 1996  - Section 34

Arbitration award - Challenge as to - Admission -Appellant conceded before the Arbitrator that it would countenance an Award in favour of the Respondent as long as it was indemnified for the payment made to the Respondent by an equal offsetting payment by way of an Award in its favour in its arbitration with 'S' - Appellant was granted precisely such an Award - Appellant exercised care to make this concession by conjoining therewith its demand for adjustment in the Second Arbitration - To that extent the concession could be called a conditional one - At the heart of the concession however, the admission itself, taken alone, was not conditional - Appellant stands bound and bonded by the legal consequences of this initial admission made by it before the Arbitrator - Impugned judgment and order upholding the award upheld.

Subcontract - Liability of main contractor - In the absence of covenant in the main contract to the contrary, the rules in relation to privity of contract will mean that the jural relationship between the employer and the main contractor on the one hand and between the sub-contractor and the main contractor on the other will be quite distinct and separate - No clause to the contrary, existent in the main contract between Appellants and 'S', has been highlighted by the Appellants, which would persuade the Court towards a deviation from the presumption of distinct and sole liability of the Appellant-Contractor as employer vis- a- vis the Respondent-Sub Contractor.

Topic(s)-Arbitration - Award upheld