In Brief
BALCO contracted Ramesh Kumar Jain to mine and transport bauxite at a fixed rate of Rs. 634.20 per MT. BALCO later requested additional work (1,95,000 MT), with the rate to be decided later. The parties never agreed on a rate for the extra work. An arbitrator awarded Jain Rs. 3,71,80,584 using quantum meruit principles to determine reasonable compensation. The Commercial Court upheld the award; the High Court annulled it, calling it "guesswork" and "rewriting the contract." The Supreme Court allowed Jain's appeal, holding that courts cannot re-appreciate evidence or substitute their judgment for the arbitrator's. Quantum meruit is validly applied when a contract is silent; differences in interpretation are insufficient to annul an award. The Court restored the arbitral award and reinforced that judicial review under the Arbitration Act is narrowly circumscribed.
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