In Brief
ABS Marine Services engaged by the Andaman & Nicobar Administration to man 17 vessels sued for recovery of ₹2,87,84,305 after M.V. Long Island was damaged allegedly due to the company's negligence. The contract contained two conflicting clauses: Clause 3.20 barred court and arbitration challenges to the Administration's recovery decision; Clause 3.22 provided broad arbitration for all disputes. An arbitral award favored the company. The High Court set aside it, holding the Administration's sole decision power under Clause 3.20 ousted the arbitrator's jurisdiction. The Supreme Court allowed the appeal, holding that Clause 3.20 cannot exclude arbitration when liability is genuinely disputed—only quantification in admitted breach cases may be excluded. The Court restored the award, reaffirming that no party can unilaterally decide its own breach when challenged, and that Rule of Law prevents total exclusion of legal remedies.
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