When an Appellate Court deals with the 'Award' assailed in an 'Appeal' it is to bear in mind fully the salient factors:--
"(i) A Court of Law cannot substitute its own decision as if sitting in Appeal over the Award.
(ii) Ambit of interference that the 'Award' is limited.
(iii) A Court of Law is to look into whether there is any negation of the 'Principles of Natural Justice'.
(iv) A Court of Law can interfere only if there is an error on the face of the 'Award'.
(v) A Court of Law can interfere if an 'Arbitrator' had brushed aside/ignored the relevant clause and the terms of the agreement.
(vi) The Award is cemented on a proposition of Law which is erroneous.
(vii) An award could not be set aside just because the reasons are spelt out in brief.
(viii) Interpretation placed by the Arbitrator ought not be disturbed if it is plausible and not because a Court of Law would have come to a different conclusion.
(ix) No interference would be called for when an Arbitrator renders a finding on a particular question of Law when authorised by the concerned parties.
(x) A Court of Law should not disturb the 'Findings' of the Arbitrator when based on facts.
(xi) There must not be a reappreciation of the evidence by a Court of Law, in as much as the same was considered by an Arbitrator."
- See more at: http://www.lawweb.in/#sthash.RIhxrPsK.dpuf
Section 29A of the Arbitration and Conciliation ActLegal
Section 29A of the Arbitration and Conciliation Act, 1996 requires an arbitral tribunal to render an award within 12 months (which may be extended for further period of six months with the consent of the parties) from the date the arbitral tribunal enters upon the reference or from the date of completion of pleadings under newly introduced Section 23(4) of the Act.
After reading pre-amended Section 29A and amended Section 29A of the Act certain questions may arise. They are...
What was the need for bringing in Section 29A of the Act?
Section 29A(5) of the Act provides that the extension of period referred to in Section 29A(4) of the Act may be on the application of any of the parties and may be granted only for sufficient cause and on such terms and conditions as may be imposed by the Court. Whether this Court is the Court as defined u/s 2(1)(e) of the Act or a Court which has appointed arbitrator u/s 11 of the Act?
Whether the amendment of 2019 has the retrospective effect to those arbitral proceedings which have commenced after 23rd October, 2015 and award thereof has not been made with the time period prescribed u/s 29A of the Act?
When the award is not rendered within the time period prescribed u/s 29A(1) or the extended period specified u/s 29A(3) of the Act, the arbitral tribunal loses its mandate and the parties are mandatorily required to approach the Court for extension of the time limit beyond 12 months or 18 months, as the case may be?
If the mandate of the arbitral tribunal is terminated in accordance with Section 29A(4) of the Act, the arbitrator becomes functus officio or de jure/de facto (u/s 14 of the Act) unable to perform his function or the aggrieved party has to move an application u/s 15 of the Act?
Is there any is time limit prescribed under Section 29A(5) of the Act for making an application for extension of time?
The extension of time under Section 29A(5) of the Act can be granted for how much period?
Whether the extension of period referred to in Section 29A(5) of the Act may be on the application of any of the parties or upon the oral request Court can extend the time?
What are going to be the considerations for the Court to impose actual or exemplary costs upon any of the parties under Section 29A(8) of the Act?
Enforceability of foreign_judgments_and_foreign_awardsLegalServicesDelhi
With the advent of globalisation and with India poised as a major international and
global player in the world economy, it is apposite to consider the law concerning
enforcement of foreign judgments in India. In law, the enforcement of foreign
judgments is the recognition and enforcement rendered in another ("foreign")
jurisdiction. Foreign judgments may be recognized based on bilateral or multilateral
treaties or understandings, or unilaterally without an express international
agreement. The "recognition" of a foreign judgment occurs when the court of one
country or jurisdiction accepts a judicial decision made by the courts of another
"foreign" country or jurisdiction, and issues a judgment in substantially identical
terms without rehearing the substance of the original lawsuit.
Cpc learning module 4 appearance, examination and trialDr. Vikas Khakare
This contains provisions as to appearance of parties before court, effects of appearance, non appearance, adjournment, examination by court, issue of commission, arrest before judgment, attachment before judgment, appointment of receiver, interest and cost.
Code Of Civil Procedure: Res sub-judice & Res Judicata by Mahamud WazedMahamud Wazed (Wazii)
Section – 10 deals with the doctrine of res sub-judice and section-11 deals with the doctrine of res –judicata. Section -10 provides the rule with regard to stay of suits where things are under consideration or pending adjudication by a court. On the other hand section-11 provides the rule relates to a matter already adjudicated. It bars the trial of a suit or an issue in which the matter directly and substantially in issue has been adjudicated upon in a former suit. Sections 10 and 11 are mandatory.
Income Tax Appellate Tribunal has no power to stay prosecution of taxpayers i...D Murali ☆
Income Tax Appellate Tribunal has no power to stay prosecution of taxpayers in respect of matters in appeal before it - T. N. Pandey - Article published in Business Advisor, dated November 10, 2016 - http://www.magzter.com/IN/Shrinikethan/Business-Advisor/Business/
If you face any problem regarding the research then you can communicate with me and I would appreciate your comments.
E-mail: devendrasrivastava36@gmail.com
divyashreenandini@gmail.com
Parties involved in construction disputes must be careful instructing third parties for written and oral advocacy before tribunals. In order that the decision isn’t set aside for fraud the consultant or consultancy should be a reputable one regulated by an industry professional body such as the RICS or CICES or is a unlicensed barrister that is regulated by the BSB and Inns of Court. By using a reputable party to represent them they will get the best value and hopefully an enforceable decision that will not be overturned due to unethical conduct.
Section 29A of the Arbitration and Conciliation ActLegal
Section 29A of the Arbitration and Conciliation Act, 1996 requires an arbitral tribunal to render an award within 12 months (which may be extended for further period of six months with the consent of the parties) from the date the arbitral tribunal enters upon the reference or from the date of completion of pleadings under newly introduced Section 23(4) of the Act.
After reading pre-amended Section 29A and amended Section 29A of the Act certain questions may arise. They are...
What was the need for bringing in Section 29A of the Act?
Section 29A(5) of the Act provides that the extension of period referred to in Section 29A(4) of the Act may be on the application of any of the parties and may be granted only for sufficient cause and on such terms and conditions as may be imposed by the Court. Whether this Court is the Court as defined u/s 2(1)(e) of the Act or a Court which has appointed arbitrator u/s 11 of the Act?
Whether the amendment of 2019 has the retrospective effect to those arbitral proceedings which have commenced after 23rd October, 2015 and award thereof has not been made with the time period prescribed u/s 29A of the Act?
When the award is not rendered within the time period prescribed u/s 29A(1) or the extended period specified u/s 29A(3) of the Act, the arbitral tribunal loses its mandate and the parties are mandatorily required to approach the Court for extension of the time limit beyond 12 months or 18 months, as the case may be?
If the mandate of the arbitral tribunal is terminated in accordance with Section 29A(4) of the Act, the arbitrator becomes functus officio or de jure/de facto (u/s 14 of the Act) unable to perform his function or the aggrieved party has to move an application u/s 15 of the Act?
Is there any is time limit prescribed under Section 29A(5) of the Act for making an application for extension of time?
The extension of time under Section 29A(5) of the Act can be granted for how much period?
Whether the extension of period referred to in Section 29A(5) of the Act may be on the application of any of the parties or upon the oral request Court can extend the time?
What are going to be the considerations for the Court to impose actual or exemplary costs upon any of the parties under Section 29A(8) of the Act?
Enforceability of foreign_judgments_and_foreign_awardsLegalServicesDelhi
With the advent of globalisation and with India poised as a major international and
global player in the world economy, it is apposite to consider the law concerning
enforcement of foreign judgments in India. In law, the enforcement of foreign
judgments is the recognition and enforcement rendered in another ("foreign")
jurisdiction. Foreign judgments may be recognized based on bilateral or multilateral
treaties or understandings, or unilaterally without an express international
agreement. The "recognition" of a foreign judgment occurs when the court of one
country or jurisdiction accepts a judicial decision made by the courts of another
"foreign" country or jurisdiction, and issues a judgment in substantially identical
terms without rehearing the substance of the original lawsuit.
Cpc learning module 4 appearance, examination and trialDr. Vikas Khakare
This contains provisions as to appearance of parties before court, effects of appearance, non appearance, adjournment, examination by court, issue of commission, arrest before judgment, attachment before judgment, appointment of receiver, interest and cost.
Code Of Civil Procedure: Res sub-judice & Res Judicata by Mahamud WazedMahamud Wazed (Wazii)
Section – 10 deals with the doctrine of res sub-judice and section-11 deals with the doctrine of res –judicata. Section -10 provides the rule with regard to stay of suits where things are under consideration or pending adjudication by a court. On the other hand section-11 provides the rule relates to a matter already adjudicated. It bars the trial of a suit or an issue in which the matter directly and substantially in issue has been adjudicated upon in a former suit. Sections 10 and 11 are mandatory.
Income Tax Appellate Tribunal has no power to stay prosecution of taxpayers i...D Murali ☆
Income Tax Appellate Tribunal has no power to stay prosecution of taxpayers in respect of matters in appeal before it - T. N. Pandey - Article published in Business Advisor, dated November 10, 2016 - http://www.magzter.com/IN/Shrinikethan/Business-Advisor/Business/
If you face any problem regarding the research then you can communicate with me and I would appreciate your comments.
E-mail: devendrasrivastava36@gmail.com
divyashreenandini@gmail.com
Parties involved in construction disputes must be careful instructing third parties for written and oral advocacy before tribunals. In order that the decision isn’t set aside for fraud the consultant or consultancy should be a reputable one regulated by an industry professional body such as the RICS or CICES or is a unlicensed barrister that is regulated by the BSB and Inns of Court. By using a reputable party to represent them they will get the best value and hopefully an enforceable decision that will not be overturned due to unethical conduct.
The Hon'ble Supreme Court in the case of Afcons Judgment has interpreted Section 89 of CPC. In the said judgment Hon'ble Supreme Court has laid down what the referral judge is supposed to do while referring the case for any Alternative Dispute Resolution (ADR). New Mediation Rules come into existance in the year 2015. Wherein also provisions for referral judges are made. This ppt will help Hon'ble Judges to refer cases for Mediation. This document also speaks about Lok Adalat, Conciliation, Arbitration and Judicial Settlement and intricacies involved therein.
Section 34 of the Arbitrationand Conciliation Act. Scope of interference. Po...Legal
Scope of Interference under Section 34 of the Arbitration and Conciliation Act. Under which circumstances Court can interfere with an award passed by the arbitral tribunal.
Conduct of arbitral proceeding part 2 vaibhav goyalVaibhav Goyal
Within the period of time agreed upon by the parties or determined by the arbitral tribunal, the claimant shall state the facts supporting his claim, the points at issue and the relief or remedy sought, and the respondent shall state his defence in respect of these particulars, unless the parties have otherwise agreed as to the required elements of those statements.
Action to Recover Solicitor's Fees - Locus Standi and Privity Hurdle: The cas...Acas Media
Under Nigerian law, one who practices a profession and renders his professional services to another at his request is entitled to receive remuneration or professional fees from the beneficiary of such services unless he voluntarily waives the payment . In the case of a legal practitioner, one of the options open to recover fees or costs due to him in his professional capacity is a right of action in court to recover such fees .
15 March 2016 - Law Institute of Victoria conference presentation.Andrew Downie
Here are the slides from my presentation to the 2016 Law Institute of Victoria conference 17 March 2016. The topic is "Recent Developments in Commercial Litigation: Case Law and Court Procedure".
Lawweb.in whether dispute involving enforcement of intellectual property righ...Law Web
Not to put too fine a point on it, Mr. Dhond's argument misses a fundamental aspect of the Supreme Court's decision in V.H. Patel. What the Supreme Court had before it in that case was a reference to arbitration that related to three trade marks and injunction claims in relation to these. One of the arbitral declarations was that the three registered trade marks continued to be the assets of a particular firm. Others before the arbitrator were declared by arbitral award to have no right, title or interest in these marks. The arbitrator issued an injunction permanently restraining those others from using or explosing in the course of trade or otherwise any of those marks in any territory. No question was ever raised before the Supreme Court in V.H. Patel about the award on the issue of the trade marks being bad on account of nonarbitrability, nor did that issue give the Supreme Court pause. The only question of arbitrability was about the dissolution of the firm, and there, as we have seen, the Supreme Court found that reference to arbitration was indeed competent.
Lawweb.in uk high courts judgment on modern perspective of donatio mortis causaLaw Web
There are three requirements to constitute a valid DMC. They are:
i) Donor contemplates his impending death.
ii) Donor makes a gift which will only take effect if and when his contemplated death occurs. Until then Donor has the right to revoke the gift.
iii) Donor delivers dominion over the subject matter of the gift to Recipient.
As many judges have observed, the doctrine of DMC (Donatio Mortis Causa) in the context of English law is an anomaly. It enables Donor to transfer property upon his death without complying with any of the formalities of section 9 of the Wills Act or section 52 of the Law of Property Act. Thus the doctrine paves the way for all of the abuses which those statutes are intended to prevent.The Lord Chancellor in Jones v Selby and Lord Chelmsford in Cosnahan drew attention to this risk. They stressed the need for the strictest scrutiny of the factual evidence. The Court of Appeal rightly stressed in Birch that the courts must not allow DMC to be used as a device in order to validate ineffective wills.
Neutral Citation Number: [2015] EWCA Civ 581
Case No: A3/2014/2704
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE, CHANCERY DIVISION
MR HOLLANDER QC, SITTING AS A DEPUTY HIGH COURT JUDGE
HC12E03256
Royal Courts of Justice
Strand, London, WC2A 2LL
09/06/2015
B e f o r e :
LORD JUSTICE JACKSON
LORD JUSTICE PATTEN
and
LORD JUSTICE SALES
____________________
Between:
KENNETH PAUL KING Claimant/
Respondent
- and -
(1) THE CHILTERN DOG RESCUE
(2) REDWINGS HORSE SANCTUARY Defendants/Appellants
Lawweb.in latest supreme court judgment on defamationLaw Web
Latest Supreme court Judgment on Defamation http://www.lawweb.in/2016/05/latest-supreme-court-judgment-on.html? we uphold the constitutional validity of Sections 499 and 500 of the Indian Penal Code and Section 199 of the Code of Criminal Procedure.
Lawweb.in whether son becomes owner of property if property is purchased in h...Law Web
Whether son becomes owner of property if property is purchased in his name by his father?http://www.lawweb.in/2016/04/whether-son-becomes-owner-of-property.html?
Lawweb.in uk high court allows paternity test for dna disease analysisLaw Web
UK High court allows paternity test for DNA disease analysis - See more at: http://www.lawweb.in/2016/04/uk-high-court-allows-paternity-test-for.html?#sthash.lJTM9zeJ.dpuf
Lawweb.in whether it is necessary to make enquiry us 202 of crpc in case of d...Law Web
Whether it is necessary to make enquiry U/S 202 of crpc in case of dishonour of cheque? http://www.lawweb.in/2016/04/whether-it-is-necessary-to-make-enquiry.html?
Lawweb.in whether arbitral tribunal can enforce its own order by appointing a...Law Web
Whether arbitral Tribunal can enforce its own order by appointing Advocate Commissioner/Receiver? - See more at: http://www.lawweb.in/2016/04/whether-arbitral-tribunal-can-enforce.html?#sthash.gzn3oCTQ.dpuf
Lawweb.in judgment of us district court on motion for a negative inference ba...Law Web
Judgment of US District court on motion for a Negative Inference Based upon Plaintiff’s Alleged Deletion of Emails - See more at: http://www.lawweb.in/2016/04/judgment-of-us-district-court-on-motion.html?#sthash.T5WQGg2Q.dpuf
Lawweb.in whether application for anticipatory bail can be rejected on the gr...Law Web
Whether application for anticipatory bail can be rejected on the ground that offence was not registered against accused? - See more at: http://www.lawweb.in/2016/04/whether-application-for-anticipatory.html#sthash.VdpyQABj.dpuf
Lawweb.in whether private party in criminal case can file appeal before supre...Law Web
Whether private party in criminal case can file appeal before supreme court as per Article 136 of constitution?
http://www.lawweb.in/2016/04/whether-private-party-in-criminal-case.html?
Lawweb.in uk supreme court judgment on vicarious liability of employer for to...Law Web
UK Supreme court Judgment on vicarious liability of employer for tortious liability of employee http://www.lawweb.in/2016/04/uk-supreme-court-judgment-on-vicarious.html
Lawweb.in whether court can condone delay in filing written statement if part...Law Web
Whether court can condone delay in filing written statement if parties are negotiating settlement during pendency of matter? - See more at: http://www.lawweb.in/2016/02/whether-court-can-condone-delay-in.html#sthash.ue75LQr0.dpuf
supreme court guidelines for protection of good samaritans in case of road a...Law Web
Supreme court Guidelines for protection of good samaritans in case of road accident http://www.lawweb.in/2016/04/supreme-court-guidelines-for-protection.html
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 5TH DAY OF JANUARY 2016 BEFORE THE HON’BLE MRS.JUSTICE RATHNAKALA WRIT PETITION NO.41228 OF 2015 (GM-RES) SHRI B.S.YEDDYURAPPA Vs THE STATE OF KARNATAKA
Lawweb.in whether parents of victim are to be compensated in case of medical ...Law Web
In addition, we also deem it fit to award a sum of Rs. 1,50,000/- in lieu of the financial hardship undergone particularly by Sharanya’s mother, who became her primary caregiver and was thus prevented from pursuing her own career. In Spring Meadows Hospital and Another v. Harjol Ahluwalia [1998 4 SCC 39] this court acknowledged the importance of granting compensation to the parents of a victim of medical negligence in lieu of their acute mental agony and the lifelong care and attention they would have to give to the child. This being so, the financial hardship faced by the parents, in terms of lost wages and time must also be recognized. Thus, the above expenditure must be allowed. REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL No. 8065 OF 2009 V. KRISHNAKUMAR .. APPELLANT VERSUS STATE OF TAMIL NADU & ORS. ..RESPONDENTS With CIVIL APPEAL No. 5402 OF 2010 S. A. BOBDE, J.
Lawweb.in whether second wife of person who died in accident can claim compen...Law Web
Whether second wife of person who died in accident can claim compensation? - See more at: http://www.lawweb.in/2015/06/whether-second-wife-of-person-who-died.html?#sthash.WmrDY5ie.dpuf
Lawweb.in whether wife who was not residing with deceased husband is entitled...Law Web
Whether wife who was not residing with deceased husband is entitled to get compensation for loss of consortium?
- See more at: http://www.lawweb.in/2015/06/whether-wife-who-was-not-residing-with.html?#sthash.FH8WXb3F.dpuf
Lawweb.in supreme courtfive-step inquiry is necessary for decision in murder ...Law Web
Supreme court;five-step inquiry is necessary for decision in Murder trial
- See more at: http://www.lawweb.in/2015/05/supreme-courtfive-step-inquiry-is.html?#sthash.nTVMr63n.dpuf
WINDING UP of COMPANY, Modes of DissolutionKHURRAMWALI
Winding up, also known as liquidation, refers to the legal and financial process of dissolving a company. It involves ceasing operations, selling assets, settling debts, and ultimately removing the company from the official business registry.
Here's a breakdown of the key aspects of winding up:
Reasons for Winding Up:
Insolvency: This is the most common reason, where the company cannot pay its debts. Creditors may initiate a compulsory winding up to recover their dues.
Voluntary Closure: The owners may decide to close the company due to reasons like reaching business goals, facing losses, or merging with another company.
Deadlock: If shareholders or directors cannot agree on how to run the company, a court may order a winding up.
Types of Winding Up:
Voluntary Winding Up: This is initiated by the company's shareholders through a resolution passed by a majority vote. There are two main types:
Members' Voluntary Winding Up: The company is solvent (has enough assets to pay off its debts) and shareholders will receive any remaining assets after debts are settled.
Creditors' Voluntary Winding Up: The company is insolvent and creditors will be prioritized in receiving payment from the sale of assets.
Compulsory Winding Up: This is initiated by a court order, typically at the request of creditors, government agencies, or even by the company itself if it's insolvent.
Process of Winding Up:
Appointment of Liquidator: A qualified professional is appointed to oversee the winding-up process. They are responsible for selling assets, paying off debts, and distributing any remaining funds.
Cease Trading: The company stops its regular business operations.
Notification of Creditors: Creditors are informed about the winding up and invited to submit their claims.
Sale of Assets: The company's assets are sold to generate cash to pay off creditors.
Payment of Debts: Creditors are paid according to a set order of priority, with secured creditors receiving payment before unsecured creditors.
Distribution to Shareholders: If there are any remaining funds after all debts are settled, they are distributed to shareholders according to their ownership stake.
Dissolution: Once all claims are settled and distributions made, the company is officially dissolved and removed from the business register.
Impact of Winding Up:
Employees: Employees will likely lose their jobs during the winding-up process.
Creditors: Creditors may not recover their debts in full, especially if the company is insolvent.
Shareholders: Shareholders may not receive any payout if the company's debts exceed its assets.
Winding up is a complex legal and financial process that can have significant consequences for all parties involved. It's important to seek professional legal and financial advice when considering winding up a company.
Introducing New Government Regulation on Toll Road.pdfAHRP Law Firm
For nearly two decades, Government Regulation Number 15 of 2005 on Toll Roads ("GR No. 15/2005") has served as the cornerstone of toll road legislation. However, with the emergence of various new developments and legal requirements, the Government has enacted Government Regulation Number 23 of 2024 on Toll Roads to replace GR No. 15/2005. This new regulation introduces several provisions impacting toll business entities and toll road users. Find out more out insights about this topic in our Legal Brief publication.
In 2020, the Ministry of Home Affairs established a committee led by Prof. (Dr.) Ranbir Singh, former Vice Chancellor of National Law University (NLU), Delhi. This committee was tasked with reviewing the three codes of criminal law. The primary objective of the committee was to propose comprehensive reforms to the country’s criminal laws in a manner that is both principled and effective.
The committee’s focus was on ensuring the safety and security of individuals, communities, and the nation as a whole. Throughout its deliberations, the committee aimed to uphold constitutional values such as justice, dignity, and the intrinsic value of each individual. Their goal was to recommend amendments to the criminal laws that align with these values and priorities.
Subsequently, in February, the committee successfully submitted its recommendations regarding amendments to the criminal law. These recommendations are intended to serve as a foundation for enhancing the current legal framework, promoting safety and security, and upholding the constitutional principles of justice, dignity, and the inherent worth of every individual.
ALL EYES ON RAFAH BUT WHY Explain more.pdf46adnanshahzad
All eyes on Rafah: But why?. The Rafah border crossing, a crucial point between Egypt and the Gaza Strip, often finds itself at the center of global attention. As we explore the significance of Rafah, we’ll uncover why all eyes are on Rafah and the complexities surrounding this pivotal region.
INTRODUCTION
What makes Rafah so significant that it captures global attention? The phrase ‘All eyes are on Rafah’ resonates not just with those in the region but with people worldwide who recognize its strategic, humanitarian, and political importance. In this guide, we will delve into the factors that make Rafah a focal point for international interest, examining its historical context, humanitarian challenges, and political dimensions.
How to Obtain Permanent Residency in the NetherlandsBridgeWest.eu
You can rely on our assistance if you are ready to apply for permanent residency. Find out more at: https://immigration-netherlands.com/obtain-a-permanent-residence-permit-in-the-netherlands/.
RIGHTS OF VICTIM EDITED PRESENTATION(SAIF JAVED).pptxOmGod1
Victims of crime have a range of rights designed to ensure their protection, support, and participation in the justice system. These rights include the right to be treated with dignity and respect, the right to be informed about the progress of their case, and the right to be heard during legal proceedings. Victims are entitled to protection from intimidation and harm, access to support services such as counseling and medical care, and the right to restitution from the offender. Additionally, many jurisdictions provide victims with the right to participate in parole hearings and the right to privacy to protect their personal information from public disclosure. These rights aim to acknowledge the impact of crime on victims and to provide them with the necessary resources and involvement in the judicial process.
PRECEDENT AS A SOURCE OF LAW (SAIF JAVED).pptxOmGod1
Precedent, or stare decisis, is a cornerstone of common law systems where past judicial decisions guide future cases, ensuring consistency and predictability in the legal system. Binding precedents from higher courts must be followed by lower courts, while persuasive precedents may influence but are not obligatory. This principle promotes fairness and efficiency, allowing for the evolution of the law as higher courts can overrule outdated decisions. Despite criticisms of rigidity and complexity, precedent ensures similar cases are treated alike, balancing stability with flexibility in judicial decision-making.
Responsibilities of the office bearers while registering multi-state cooperat...Finlaw Consultancy Pvt Ltd
Introduction-
The process of register multi-state cooperative society in India is governed by the Multi-State Co-operative Societies Act, 2002. This process requires the office bearers to undertake several crucial responsibilities to ensure compliance with legal and regulatory frameworks. The key office bearers typically include the President, Secretary, and Treasurer, along with other elected members of the managing committee. Their responsibilities encompass administrative, legal, and financial duties essential for the successful registration and operation of the society.
Car Accident Injury Do I Have a Case....Knowyourright
Every year, thousands of Minnesotans are injured in car accidents. These injuries can be severe – even life-changing. Under Minnesota law, you can pursue compensation through a personal injury lawsuit.
Lawweb.in when court should not set aside arbitration award
1. lawweb.in http://www.lawweb.in/2016/05/when-court-should-not-set-aside_26.html?pfstyle=wp
When court should not set aside arbitration
award?
It is to be noted that an 'Arbitral Tribunal' is the 'Final Arbitrator' of both the questions of
'Fact and Law' referred to it for determination. The decision of the Arbitrator, being the
select judge of the parties, is ordinarily final both on 'Facts and Law' and should not be
lightly interfered with. Likewise, the Review in Court would not be justified to interfere with
the Award merely because the views taken by the Arbitrator on the question of fact or law
does not accord well within its own views. As a matter of fact, the 'Reviewing Court' is to
accept the decision an Arbitrator as long as he had acted within jurisdiction in interpreting
the provisions of the Contract and had applied the law to his evaluation of the facts.
Indeed, the Arbitration and Conciliation Act, 1956 makes provision for the supervisory role
of the courts for review of the 'Arbitral Award' only to ensure fairness as per decision
McDermott International Inc. V. Burn Standard Co., Ltd., and Others MANU/SC/8177/2006
: (2006) 11 Supreme Court Cases 181.
It is to be borne in mind that an Arbitrator is the master of 'Facts and Law'. As such, the
findings of fact recorded by the 'Arbitral Tribunal' are conclusive and final. It cannot be
gainsaid that the finding of fact cannot be assailed on the grounds of admissibility,
relevance, materiality and weight of any evidence. In fact, the Arbitration and Conciliation
Act, 1996 does not provide for recourse against an 'Arbitral Award' on the facts or for any
'Judicial Review' of the award on its merits. If the Tribunal had jurisdiction, the correct
procedures were adhered to, and the correct formalities are observed, the award - good,
bad or indifferent is final and binding on the parties. It is not open to a Court of Law to
1/28
2. examine the correctness of the award on merits with reference to the materials produced
before the Arbitral Tribunal, nor can it re-examine or re-assess the materials on record to
see the correctness of the view taken by the Tribunal.
Furthermore, the jurisdiction of a Court of Law to set aside an Arbitral Award under
Section 34 of the Arbitration and Conciliation Act, 1996 is not an Appellate one and added
further, it cannot interfere with erroneous on fact either in the absence of perversity. It is
restricted to the grounds adumbrated in it, in the considered opinion of this Court. Also
that if the award is passed fairly, after providing adequate opportunities to the respective
parties to project their points of view in the manner provided by the Arbitration agreement,
the Award is not amenable to correction by a Court of Law. Also in the decision of Delhi
State Industrial & Infrastructure Development Corporation Limited reported in (2014) 3 Arb
LR 116 (Delhi) (Division Bench) at Paragraph No. 9, it is observed and held as follows:--
"9. We may further add that the parties, by agreeing to be bound by the
arbitral award and by declaring it to be final, agree to be bound also by
wrong interpretation or an erroneous application of law by the arbitral
tribunal and once the parties have so agreed, they cannot apply for setting
aside of the arbitral award on the said ground. Even under the 1940 Act
where the scope of interference with the award was much more, the Apex
Court in Tarapore and Co., V. Cochin Shipyard Ltd., Cochin,
MANU/SC/0002/1984 : (1984) 2 SCC 680 : 1985 Ar.LR 2 (SC) and U.P.
State Electricity Board, MANU/SC/0541/1988 : (1989) 1 SCC 359 : 1989
(1) Arb. LR 244 (SC) held that the arbitrator's decision on a question of law
is also binding even if erroneous. Similarly, in N. Chellappan V. Secretary,
Kerala State Electricity Board, MANU/SC/0002/1974 : (1975) 1 SCC 289, it
was held that even if the umpire committed an error of law in granting
amount, it cannot be said to be a ground challenging the validity of the
award; the mistake may be a mistake of fact of law."
However, a Court of Law can set aside the 'Award' only if it is apparent from the award
that there is no evidence to support the conclusions or if the award is cemented on any
legal view which is latently and patently an erroneous one.
If an Arbitrator fails to adjudicate a counter claim and does not consider it, then 'Award' is
liable to be set aside in terms of the Arbitration and Conciliation Act, 1996 [26 of 1996]. An
'Arbitrator' is not only required to decide a counter claim but is also required to assail
reasons for his decisions.
Factors to be Borne in Mind by an Appellate Court
31. When an Appellate Court deals with the 'Award' assailed in an 'Appeal' it is to bear in
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3. mind fully the salient factors:--
"(i) A Court of Law cannot substitute its own decision as if sitting in Appeal
over the Award.
(ii) Ambit of interference that the 'Award' is limited.
(iii) A Court of Law is to look into whether there is any negation of the
'Principles of Natural Justice'.
(iv) A Court of Law can interfere only if there is an error on the face of the
'Award'.
(v) A Court of Law can interfere if an 'Arbitrator' had brushed aside/ignored
the relevant clause and the terms of the agreement.
(vi) The Award is cemented on a proposition of Law which is erroneous.
(vii) An award could not be set aside just because the reasons are spelt out
in brief.
(viii) Interpretation placed by the Arbitrator ought not be disturbed if it is
plausible and not because a Court of Law would have come to a different
conclusion.
(ix) No interference would be called for when an Arbitrator renders a finding
on a particular question of Law when authorised by the concerned parties.
(x) A Court of Law should not disturb the 'Findings' of the Arbitrator when
based on facts.
(xi) There must not be a reappreciation of the evidence by a Court of Law, in as much as
the same was considered by an Arbitrator."
IN THE HIGH COURT OF MADRAS
O.S.A. No. 159 of 2015
Decided On: 01.12.2015
Appellants: Jeypore Sugar Company Ltd.
Vs.
Respondent: Laxmi Organic Industries Limited and Ors.
Hon'ble Judges/Coram:S. Manikumar and M. Venugopal, JJ.
Citation:AIR 2016 (NOC)288 Mad
1. The Appellant/Petitioner has focused the instant Original Side Appeal as against the
Order dated 06.07.2015 in O.P. No. 643 of 2009 passed by the Learned Single Judge.
2. The Learned Single Judge while passing the Impugned Order dated 06.07.2015 in O.P.
No. 643 of 2009 (filed by the Appellant/Petitioner) in Paragraph No. 42 had inter alia
observed the following:--
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4. " ------ this Court is of view that the learned arbitrators gave valid reasons in
support of the award. After having discussed elaborately, the learned
Arbitrators have come to the just and correct conclusion that since the
petitioner has committed the breach of agreement, they are liable to re-pay
the advance amount with interest, however, negatived the other claims of
the first respondent and therefore, there is nothing warrants the
interference of this Court with the Award of the learned Arbitrators...."
and resultantly dismissed the Original Petition without costs thereby confirmed the Award
passed by the Learned Arbitrators.
Appellant/Petitioner's Contentions
3. The Learned Counsel for the Appellant/Petitioner urges before this Court that the
Learned Single Judge had committed an error in upholding the Award passed by the
Learned Arbitrators.
4. According to the Learned Counsel for the Appellant, the finding of the Learned Single
Judge at Paragraph No. 36 of the Impugned Order in O.P. No. 643 of 2009 is contrary to
Paragraph No. 42 of the said Order inasmuch as the Learned Single Judge justifies the
breach of Agreement committed by the 1st Respondent in Paragraph No. 36 thereby
holding that the 1st Respondent had committed breach. But, at Paragraph No. 42 made
an observation that the Petitioner had violated the Agreement.
5. Advancing his arguments, the Learned Counsel for the Appellant projects an argument
that it was not even the case of the 1st Respondent that the 1st Respondent was not
informed that the 'Goods' are still in the 'Bonded Warehouse' to give rise to render such a
finding that 'had the Petitioner revealed the fact that process of importation has not yet
been completed, the 1st Respondent would not have entered into an Agreement with the
Petitioner' (Appellant), which is nobody's case.
6. On behalf of the Appellant, it is represented before this Court that the Learned Single
Judge should have seen that although an interpretation of 'Agreement' by the Arbitrators
could not be interfered with by a Court of Law under Section 34 of the Arbitration and
Conciliation Act, 1996, yet it is settled Law that Arbitrators get their authority to adjudicate
the dispute by virtue of the Agreement entered into between the parties and further they
are bound to decide the dispute in accordance with the terms of the 'Agreement'.
7. The stand of the Appellant is that the recitals at Page No. 2 of the Agreement and
Clause 6.1, 14.1 and 15 of the Agreement among other Clauses go to show beyond doubt
that the transactions entered into between the Appellant/Petitioner and the 1st
Respondent/Claimant for sale of 8000 Metric Tonnes of Ethyl Alcohol which was in the
Bonded Warehouse by a 'Bond To Bond Transfer' for clearance by the 1st Respondent
through sea route.
8. The Learned Counsel for the Appellant brings it to the notice of this Court that the
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5. Learned Single Judge had rightly held that 'Goods' had not crossed the Customs Frontier
and hence it could not be held that the 'Goods' had come into the Country, ought to, as a
consequence of the same, ought to have held that 'there was no necessity to obtain any
licence from the State Excise Authority' for sale or transport of the said material.
9. The plea of the Appellant is that in the list of 'Firm Terms of the Agreement' there was
no question of any licence to be obtained by the licence Appellant from the State Excise
Authorities or for the Appellant to inform the 1st Respondent about the necessity for such
licences to give rise for any argument that there was suppression of material particulars,
which would enable the 1st Respondent to repudiate the Agreement.
10. It is the submission of the Learned Counsel for the Appellant that the 'Award' passed
by the Arbitrators was against the Law of the Land and more particularly, the Indian
Contract Act, 1872 and therefore was liable to be interfered with under Section 34 of the
Arbitration and Conciliation Act, 1996.
11. That apart, it is represented on behalf of the Appellant that the findings of the Learned
Single Judge at Paragraph Nos. 31 and 32 of the Impugned Order that the Petitioner has
not become the absolute owner of the product when the same was in the 'Bonded
Warehouse' and hence the agreement itself was void, is an incorrect and unsustainable in
the Eye of Law.
12. The Learned counsel for the Appellant contends that it is only the 1st Respondent who
had employed the words that 'Transport by Road' which was not in consonance with the
terms of the Agreement. Furthermore, it is the 1st Respondent, who with a view to wriggle
out of the Agreement had deliberately brought in covenants that were missing in the
Original Agreement. Moreover, the 1st Respondent was no longer interested in taking
delivery of the material and that the Appellant accepted repudiation of the 'Agreement'
without prejudice to the legal rights which is clearly mentioned by the Appellant in its letter
dated 03.05.2005 addressed to the 1st Respondent.
13. At this juncture, the Learned Counsel for the Appellant refers to Clause 6 of the
Agreement which reads as under:--
"6. Customs Duty, C.V.D, Education Cess, Port due, Wharfage,
Demurrages etc. The buyer shall take full responsibility to pay the statutory
taxes, duties, levies, fee, interest on customs duty and levies and incidental
expenses already paid/to be paid by the seller.
6.1 Sales Tax: Not applicable as the cargo will be sold on bond transfer
basis.
6.2 The Buyer shall take the responsibility to get the required specific
permission from the Customs/State Excise authority for utilizing the
imported Special Denatured Spirit (SDS). Originally, it was imported for
specific purpose of converting the same into Anhydrous Ethanol."
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6. 14. The Learned Counsel for the Appellant submits that 'Arbitrators' cannot go beyond the
terms of the Contract and therefore the award is liable to be set aside. Continuing further,
the Learned Counsel for the Appellant takes a plea that a perusal of the award passed by
the learned Arbitrators would reveal that they had not appreciated true meaning and effect
of Clause 6 and 6.2, but had chosen to refer to and rely upon Clause 14.2 which was to
the effect that the seller shall sign all necessary papers for the purpose of transfer of
ownership. In short, it is the contention of the Learned Counsel for the Appellant that the
Learned Arbitrators had covered the two vital Clauses of the Agreement and had given
completely a new meaning to the true intent of the parties when they had signed the
agreement. Also that the very fact that Clause 6 and Clause 6.2 were present in the
'Agreement' clearly indicates that the seller was aware of the requirement to obtain
permission.
15. The Learned Counsel for the Appellant contends that by virtue of Clause 6 and 6.2,
the purchaser was aware of this obligation to obtain all statutory permissions and
therefore should have been made responsible for the same. Apart from that the very fact
that they were the 'First Party' to address a letter to the Commissioner of Prohibition and
Excise, Hyderabad on 18.01.2005 to seek advice on the formalities to be complied with,
fees and duties to be paid if any (as per Ex. R.18), clearly shows that they were aware of
the obligations under the Contract inasmuch as the Learned Arbitrators had travelled far
beyond ambit of the contract to arrive at this finding, they had ignored the vital terms of
the contract. As such, on this simple ground alone, the Award is liable to be set aside.
16. The Learned Counsel for the Appellant submits that the Learned Arbitrators had
ignored counter claim wherein the Appellant had clearly established that the goods were
sold at a very great loss and that the Appellant was entitled to that loss after adjustment of
advance amount of Rupees One Crore. If only a proper finding on the question of violation
of contract was rendered, the counter claim of the Appellant could not have been rejected.
17. Finally, it is the plea of the Learned Counsel for the Appellant that the moment, the
Appellant had produced the 'Goods' from the foreign exporter, title passed on to the
Appellant and the contra finding of the Learned Single Judge in the Impugned Order that
the Appellant was not the owner of goods is not a correct one. As a matter of fact, on
behalf of the Appellant it is pleaded that even the Learned Arbitrators had not held that
contract was void or that the Appellant was not the owner of the 'Goods' but, the Learned
Single Judge had gone one step ahead and rendered a totally erroneous finding in the
Impugned Order which is liable to be set aside in the interest of justice.
Appellant's Citations
18. The Learned Counsel for the Appellant relies on the decision of the Hon'ble Supreme
Court reported in MANU/SC/3624/2008 : (2008) 13 Supreme Court Cases at Page 80 at
Special Page 81 whereby and whereunder it is held as follows:--
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7. The principles for interference with an arbitral award under Section 34(2) of
the 1996 are as follows:
"(a) An award, which is
(i) contrary to substantive provisions of law;
or
(ii) the provisions of the Arbitration and
Conciliation Act, 1996, or
(iii) against the terms of the respective
contract; or
(iv) patently illegal; or
(v) prejudicial to the rights of the parties; is
open to interference by the court under
Section 34(2) of the Act.
(b) The award could be set aside if it is contract to:
(a) fundamental policy of Indian law; or
(b) the interest of India; or
(c) justice or morality
(c) The award could also be set aside if it is so unfair and
unreasonable that it shocks the conscience of the court.
(d) It is open to the court to consider whether the award is
against the specific terms of contract and if so, interfere with
it on the ground that it is patently illegal and opposed to the
public policy of India."
Submissions of 1st Respondent
19. Repelling the contentions of the Learned Counsel for the Appellant, the Learned
Senior Counsel for the 1st Respondent submits that the Appellant/Petitioner entered into
an Agreement for sale of 8000 Metric Tonnes of Ethyl Alcohol and that the 1st Respondent
proposed to purchase the same and paid an advance of Rupees One Crore to the
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8. Appellant, but the Appellant had not obtained prior permission of the Excise Department,
Government of Andhrapradesh and inasmuch as the requirement of obtaining such
permission was not disclosed to the 1st Respondent, the 1st Respondent rescinded the
contract and further that the Appellant had accepted the repudiation.
20. According to the Learned Senior Counsel for the 1st Respondent, since the amount
was not returned to the 1st Respondent, the 1st Respondent had initiated Arbitration
Proceedings for recovery of said advance of Rupees One Crore and for damages and as
counter blast the Appellant filed a counter claim for damages alleging breach by the 1st
Respondent.
21. The Learned Senior Counsel for the 1st Respondent contends that the Court under
Section 34 of the Arbitration and Conciliation Act, 1996 does not act as an Appellate Court
and further that a Court of Law would not reappreciate the evidence in order to interfere
with the findings of the facts. Moreover, the interpretation of the terms of the contract is
within the sole domain of the Arbitrator and in fact, the ambit of Appeal under Section 37
of the Act, 1996 is even more restricted. Also that a Court of Law under Section 34 of the
Arbitration and Conciliation Act, 1996 is primarily concerned with the decision making
process and not the merits of the decision.
22. The Learned Senior Counsel for the 1st Respondent submits that the Arbitrators had
already applied their mind and concluded that the contract was repudiated and the
advance was to be returned to the 1st Respondent with interest. Added further, it is
pointed out that in Ex. R1 letter dated 26.04.2005, the Appellant had admitted that they
would obtain consent of the Excise Department which proves the fact that the Appellant
knew that permission was required. Moreover, the Commissioner of Prohibition and
Excise, Andhrapradesh-Hyderabad in Ex. R.64 Letter dated 05.02.2005 had called for
certain details from the Appellant directing it to furnish information on the following points
immediately,
a) Whether the imported denatured Spirit said to have been arrived at the
Visakhapatnam Port Trust has been cleared by the Customs authorities? If
so has it been informed to the local Excise Officers? Whether it is now in
the custody of the local Excise Officers?
b) The reasons as to why they want to sell? (with specific reasons in
support of their request be furnished through Distillery Officer concerned)"
and therefore a plea is taken that it is latently and patently evident that prior to entering
into the contract and after repudiation of the contract, the Appellant's action pointing out
unerringly that the consent of the Excise Commissioner was required to sell SDS and
further that the Learned Arbitrators and the Learned Single Judge had opined that the
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9. consent was very much required to sell the SDS by the Appellant. In short, it is the stand
of the 1st Respondent that the Appellant's 'Agreement to sell' without such consent was
an invalid/voidable one.
23. The Learned Senior Counsel for the 1st Respondent projects to take a legal plea that
the 'Arbitral Tribunal' held that the contract was voidable and that the 1st Respondent had
avoided the contract and if the Learned Single Judge under Section 34 of the Arbitration
and Conciliation Act, 1996 holds that the contract is void ab initio, then, it would not
materially affect the case of the 1st Respondent. Further, the Appellant had retained the
benefit of both the 'Goods' and the 'Advance'.
First Respondent's Decisions
24. At this stage, on behalf of the 1st Respondent, the following decisions are cited:--
"(i) In the decision of Hon'ble Supreme Court in Municipal Corporation of
Delhi V. Jagan Nath Ashok Kumar reported in MANU/SC/0013/1987 :
(1987) 4 Supreme Court Cases at Page 497 at Special Page 500 in
Paragraph No. 2 it is observed and held as follows:
"2. The arbitrator gave reasons in support of the award. The
question is whether reasonableness of the reasons in a
speaking award is justiciable under Article 136 of the
Constitution. We are of the opinion that such
reasonableness of the reasons given by an arbitrator in
making his award cannot be challenged in a proceeding like
the present....."
(ii) Also in the afore said decision at page 503 and 504 in Paragraph No. 4
and 5, it is observed and held as follows:--
4. In this case, there was no violation of any principles of
natural justice. It is not a case where the arbitrator has
refused cogent and material factors to be taken into
consideration. The award cannot be said to be vitiated by
non-reception of material or non-consideration of the
relevant aspects of the matter. Appraisement of evidence by
the arbitrator is ordinarily never a matter which the court
questions and considers. The parties have selected their
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10. own forum and the deciding forum must be conceded the
power of appraisement of the evidence. In the instant case,
there was no evidence of violation of any principal of natural
justice. The arbitrator in our opinion is the sold judge of the
quality as well as quantity of evidence and it will not be for
this Court to take upon itself the task of being a judge of the
evidence before the arbitrator. It may be possible that on the
same evidence the court might have arrived at a different
conclusion than the one arrived at by the arbitrator but that
by itself is not ground in our view for setting aside the award
of an arbitrator.
5. It is familiar learning but requires emphasis that Section 1
of the Evidence Act, 1872 in its rigour is into intended to
apply to proceedings before an arbitrator. P.B. Mukharji, J.
as the learned Chief Justice then was, expressed the above
view in Haji Ebrahim Kassam Cochinwalla V. Northern India
Oil Industries Ltd., (MANU/WB/0245/1950 : AIR 1951 Cal
230: 85 CLJ 176) and we are of the opinion that this
represents the correct statement of law on this aspect. Lord
Goddard, C.J. In Mediterranean & Eastern Export Co. Ltd.
V. Fortress Fabrics Ltd., (1948) 2 All ER 186, 188, 189.
observed at pages 188-189 of the report as follows:--
A man in the trade who is selected for his
experience would be likely to know, and,
indeed, would be expected to know, the
fluctuations of the market and would have
plenty of means of informing himself or
refreshing his memory on any point on which
he might find it necessary so to do. In this
case, according to the affidavit of the sellers,
they did take the point before the arbitrator
that the Souther African market has
"slumped". Whether the buyers contested
that statement does not appear, but an
experienced arbitrator would know, or have
the means of knowing, whether that was so
or not and to what extent, and I see no
reason why in principle he should be required
10/28
11. to have evidence on this point any more than
on any other question relating to a particular
trade. It must be taken, I think, that in fixing
the amount he has, he has acted on his own
knowledge and experience. The day has long
gone by when the courts looked with jealousy
on the jurisdiction of arbitrators. The modern
tendency is, in my opinion, more especially in
commercial arbitrations, to endeavour to
uphold awards of the skilled persons that the
parties themselves have selected to decide
the questions at issue between them. If an
arbitrator has acted within the terms of his
submission and has not violated any rules of
what is so often called natural justice the
courts should be slow indeed to set aside his
award."
(iii) In the decision of Hon'ble Supreme Court in Puri Construction Pvt. Ltd.,
V. Union of India reported in MANU/SC/0427/1989 : (1989) 1 Supreme
Court Cases at Page 411, it is held as under:
"When a court is called upon to decide the objections raised
by a party against an arbitration award, the jurisdiction of the
court is limited, as expressly indicated in the Arbitration Act,
and it has no jurisdiction to sit in appeal and examine the
correctness of the award on merits with reference to the
materials produced before the arbitrator. The court cannot
sit in appeal over the views of the arbitrator by re-examining
and re-assessing the materials. None of the grounds for
setting aside an award as provided under the Arbitration Act
is available in this case. The award is fair and not open to
challenge."
(iv) In the decision of Hon'ble Supreme Court in M/s. Sudarsan Trading
Co., V. Government of Kerala reported in MANU/SC/0361/1989 : (1989) 2
Supreme Court Cases at Page 38 and 39, it is observed and held as
11/28
12. under:--
"There are two different and distinct grounds involved in
many of the cases. One is the error apparent on the face of
the award, and the other is that the arbitrator exceeded his
jurisdiction. In the latter case, the courts can look into the
arbitration agreement but in the former, it cannot, unless the
agreement was incorporation or recited in the award. An
award may be remitted or set aside on the ground that the
arbitrator in making it, had exceeded his jurisdiction and
evidence of matters not appearing on the face of it, will be
admitted in order to establish whether the jurisdiction had
been exceeded or not, because the nature of the dispute is
something which has to be determined outside the award -
whatever might be said about it in the award or by the
arbitrator (Paras 30 and 31)
Christopher Brown Ld. V. Genossenschaft
Oesterreichischer, (1954) 1 QB 8; Dalmia Dairy Industries
Ltd. V. National Bank of Pakistan, (1978) 2 Lloyd's Rep 223,
relied on
However, there is a distinction between disputes as to the
jurisdiction of the arbitrator and the disputes as to in what
way that jurisdiction should be exercised. There may be a
conflict as to the power of the arbitrator to grant a particular
remedy. One has to determine the distinction between an
error within the jurisdiction and an error in excess of the
jurisdiction. Court cannot substitute its own evaluation of the
conclusion of law or fact to come to the conclusion that the
arbitrator had acted contrary to the bargain between the
parties. Whether a particular amount was liable to be paid or
damages liable to be sustained, was a decision within the
competency of the arbitrator in this case. By purporting to
construe that contract the court could not take upon itself
the burden of saying that this was contrary to the contract
and, as such, beyond jurisdiction. If on a view taken of a
contract, the decision of the arbitrator on certain amounts
awarded, is a possible view though perhaps not the only
correct view, the award cannot be examined by the court"
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13. (v) In the decision of Hon'ble Supreme Court in U.P. State Electricity Board
V. Searsole Chemicals Ltd. reported in MANU/SC/0118/2001 : (2001) 3
Supreme Court Cases 397, it is held as follows:--
"When the arbitrators have applied their mind to the
pleadings, the evidence adduced before them and the terms
of the contract, there is no scope for the court, including the
Supreme Court to reappraise the matter as if this were an
appeal, and it is clear that where two views are possible - in
this case there is no such scope - the view taken by the
arbitrators would prevail."
(vi) In the decision of Hon'ble Supreme Court in Oil & Natural Gas
Corporation Ltd., V. Saw Pipes Limited reported in MANU/SC/0314/2003 :
(2003) 5 Supreme Court Cases at Page 705 at Special Page 707 and 708,
it is observed and held as follows:--
In Section 34(2)(a)(v) of the Act, the composition of the
Arbitral Tribunal should be in accordance with the
agreement. Similarly, the procedure which is required to be
followed by the arbitrators should also be in accordance with
the agreement of the parties. If there is no such agreement
then it should be in accordance with the procedure
prescribed in Part I on the Act i.e., Sections 2 to 43. These
provisions prescribe the procedure to be followed by the
Arbitral Tribunal coupled with its powers. Power and
procedure are synonymous in the present case. By
prescribing the procedure, the Arbitral Tribunal is
empowered and is required to decide the dispute in
accordance with the provisions of the Act, that is to say, the
jurisdiction of the Tribunal to decide the dispute is
prescribed. In these sections there is no distinction between
the jurisdiction/power and the procedure. Therefore, if the
award is dehors the said provisions, it would be, on the face
of it, illegal. The decision of the Tribunal must be within the
bounds of its jurisdiction conferred under the Act or the
contract. In exercising jurisdiction, the Arbitral Tribunal
13/28
14. cannot act in breach of some provision of substantive law of
the provisions of the Act. (Paras 8, 11 and 12)
Harish Chandra Bajpai V. Triloki Singh,
MANU/SC/0057/1956 : AIR 1957 SC 444 : 1957 SCR 370,
followed:
Section 34 read conjointly with other provisions of the Act
indicates that the legislative intent could not be that if the
award is in contravention of the provisions of the Act, still
however, it could not be set aside by the court. Holding
otherwise would be contrary to the basic concept of justice.
If the Arbitral Tribunal has not followed the mandatory
procedure prescribed under the Act, it would mean that it
has acted beyond its jurisdiction and thereby the award
would be patently illegal which could be set aside under
Section 34. (Para 13)
Such interpretation of Section 34(2)(a)(v) would be in
conformity with the settled principle of law that the
procedural law cannot fail to provide relief when substantive
law gives the right. The principle is - there cannot be any
wrong without a remedy. (Para 14)
M.V. Elisabeth V. Harwan Investment & Trading (P) Ltd.,
MANU/SC/0685/1993 : 1993 Supp (2) SCC 433, Dhannalal
V. Kalawatibai, MANU/SC/0565/2002 : (2002) 6 SCC 16,
relied on
Therefore, if the award is contrary to the substantive
provisions of law or the provisions of the Act or against the
terms of the contract, it would be patently illegal, which
could be interfered with under Section 34. However, such
failure of procedure should be patent affecting the rights of
the parties.
(vii) In the decision of Hon'ble Supreme Court in State of Uttarpradesh V.
Allied Contractions reported in MANU/SC/0562/2003 : (2003) 7 SCC at
Page 396, it is observed and held as follows:--
"The award is a speaking one. The arbitrator has assigned
sufficient and cogent reasons in support thereof.
Interpretation of a contract, it is trite, is a matter for the
14/28
15. arbitrator to determine (Para 4)
Sudarsan Trading Co., V. Government of Kerla
MANU/SC/0361/1989 : (1989) 2SCC 38: Air 1989 SC 890,
referred to
Section 30 of the Arbitration Act, 1940 providing for setting
aside an award is restrictive in its operation. Unless one or
the other condition contained in Section 30 is satisfied, an
award cannot be set aside. The arbitrator is a Judge chosen
by the parties and his decision is final. The court is
precluded from reappraising the evidence. Even in a case
where the award contains reasons, the interference
therewith would still be not available within the jurisdiction of
the court unless, of course, the reasons are totally perverse
or the judgment is based on a wrong proposition of law. An
error apparent on the face of the records would not imply
closer scrutiny of the merits of documents and materials on
record. Once it is found that the view of the arbitrator is a
plausible one, the court will refrain itself from interfering.
(viii) In the decision of Hon'ble Supreme Court in Pure Helium India P. Ltd.,
V. Oil & Natural Gas Commission reported in MANU/SC/0803/2003 :
(2003) 8 Supreme Court Cases at Page 593 at Special Pages 595 and
596, it is held as follows:--
The jurisdiction of the court in interfering with a non-
speaking award is limited. (Para 41)
The questions framed by the Division Bench of the High
court are self-contradictory and inconsistent. Whereas in
framing Question (a) a right approach has been adopted by
the Division Bench, a wrong one had been adopted in
framing Question (b). If the claim of the claimant is not
arbitrable having regard to the bar/prohibition created under
the contract, the court can set aside the award but unless
such a prohibition/bar is found out, the court cannot exercise
its jurisdiction under Section 30 of the Act. In this case there
does not exist any provision which does not permit or give
the arbitrator the power to decide the dispute raised by the
claimant nor there exists any specific bar in the contract to
15/28
16. raise such a claim. (Paras 20,42 and 40)
State of U.P.V. Allied Contractions , MANU/SC/0562/2003 :
(2003) 7 SCC 396: (2003) 6 Scale 265; W.B. State
Warehousing Corpn. V. Sushil Kumar Kayan,
MANU/SC/0425/2002 : (2002) 5 SCC 679; K.R.
Raveendranathan V. State of Kerala, MANU/SC/1617/1996 :
(1998) 9 SCC 410; P.V. Subba Naidu V. Gov., of A.P.,
MANU/SC/1520/1998 : (1998) 9 SCC 407; H.P. SEB V.R.J.
Shah and Co., MANU/SC/0266/1999 : (1999) 4 SCC 214;
Shyama Charan Agarwala & Sons V. Union of India,
MANU/SC/0586/2002 : (2002) 6 SCC 201; Bharat cooking
Coal Ltd., v. Annapurna Construction, MANU/SC/0641/2003
: (2003) 8 SCC 154: (2003) 7 Scale 20; Food Corpn. Of
India V. Surendra, Devendra & Mahendra Transport Co;,
MANU/SC/0087/2003 : (2003) 4 SCC 80, relied on
Rajasthan State Mines & Minerals Ltd., V. Eastern Engg.
Enterprises, MANU/SC/0601/1999 : (1999) 9 SCC 283,
conclusions affirmed Sudarsan Trading Co., V. Govt of
Kerala, MANU/SC/0361/1989 : (1989) 2 SCC 38: AIR 1989
SC 890; Hindustan Construction Co. Ltd. V. State of J&K
MANU/SC/0415/1992 : (1992) 4 SCC 17, cited
The terms of the contract can be express or implied. The
conduct of the parties would also be a relevant factor in the
matter of construction of a conduct. Construction of the
contract agreement, therefore, was within the jurisdiction of
the arbitrators having regard to the wide nature, scope and
ambit of the arbitration agreement and they cannot, thus, be
said to have misdirected themselves in passing the award
by taking into consideration the conduct of the parties as
also the circumstantial evidence. (Paras 25 and 27)"
First Respondent's other case Laws
25. On behalf of the 1st Respondent, the following Decisions are relied on:--
a) In the decision of Hon'ble Supreme Court in Bharat Cooking Coal Ltd.,
V. L.K. Ahuja reported in MANU/SC/0335/2004 : (2004) 5 Supreme Court
Cases at Page 109 and at Special Page 114 at Paragraph No. 11, it is
observed as follows:--
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17. "11. There are limitations upon the scope of interference in
awards passed by an arbitrator. When the arbitrator has
applied his mind to the pleadings, the evidence adduced
before him and the terms of the contract, there is no scope
for the court to reappraise the matter as if this were an
appeal and even if two views are possible, the view taken by
the arbitrator would prevail. So long as an award made by
an arbitrator can be said to be one by a reasonable person
no interference is called for. However, in case where an
arbitrator exceeds the terms of the agreement or passes an
award in the absence of any evidence, which is apparent on
the face of the award, the same could be set aside."
b) In the decision of Bhagwati Oxygen Ltd., V. Hindustan Copper Ltd.,
reported in MANU/SC/0260/2005 : (2005) 6 Supreme Court Cases at Page
462 at Special Page 463, it is observed and held as follows:--.
"As per the contract, BOL had undertaken to provide a VIST
for storage of liquid oxygen of 50,000 litres. However, the
VIST was not established by NOL and there was no
provision for storage of liquid oxygen. The arbitrator
observed the HCL neither insisted on establishment of the
VIST nor objected to its nonestablishment. Regarding purity
of oxygen, the arbitrator observed the HCL never
complained regarding the fall of purity of oxygen during the
relevant period. Referring to the letter written by HCL to
BOL, the arbitrator observed that HCL continued to accept
oxygen gas supplied by BOL without avoiding the contract
on the ground that there was breach of agreement by BOL
in respect of the quality of oxygen. The arbitrator observed
that there was neither excess consumption of furnace oil nor
drop in production by HCL. Following Associated Hotels,
MANU/SC/0333/1967 : (1968) 2 SCR 548, and Harsh
Wardhan, MANU/SC/0743/1987 : (1988) 1 SCC 454 the
arbitrator held that even if it was the case of HCL that there
was non-compliance with certain terms and conditions by
BOL, there was waiver and abandonment of the rights
conferred on HCL and it was not open to HCL to refuse to
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18. make payment to BOL. Since no such payment was made,
BOL was right in making grievance regarding non-payment
of the amount and accordingly an award was made in favour
of BOL. The Single Judge as well as the Division Bench of
the High Court upheld the award. In view of the finding
recorded by the arbitrator and non-interference by the High
Court no case has been made out by HCL as regards the
claim allowed by the arbitrator in favour of BOL to the extent
of ordering payment for supply of oxygen gas to HCL.
Hence, the appeal filed by HCL deserves to be dismissed".
(Paras 21 and 22)
Further in the aforesaid decision, at Page 464, it is held as follows:--
"An arbitrator is a judge appointed by the parties and as
such the award passed by him is not to be lightly interfered
with. The court while exercising the power under Section 30,
cannot reappreciate the evidence or examine correctness of
the conclusions arrived at by the arbitrator. The jurisdiction
is not appellate in nature and an award passed by an
arbitrator cannot be set aside on the ground that it was
erroneous. It is not open to the court to interfere with the
award merely because in the opinion of the court, another
view is equally possible. It is only when the court is satisfied
that the arbitrator had misconducted himself or the
proceedings or the award had been improperly procured or
is "otherwise" invalid that the court may set aside such
award."
(c) In the decision of Hon'ble Supreme Court in Hindustan Zinc Limited V.
Friends Coal Carbonisation reported in (2006) 4 SCC at page 445 at
Special Page 456 at Paragraph No. 24 it is observed and held as follows:--
"24. The appellant has given calculation fully and correctly
which shows that the escalation was only 11,42,203.90. This
was what was awarded by the trial court and this amount
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19. had been paid with interest of Rs. 12,75,442, in all Rs.
24,17,646 on 06.02.1999. In spite of our directions on
21.03.2006, the respondent has not given the actual
calculations but has furnished only the final figure of claim.
The respondent's memo makes it clear that the respondent
wants the escalation to be calculated for supplies from
14.07.1992 with reference to the base price of Washery
Grade II coal and not with reference to Washery Grade I
Coal. This is impermissible. The order of the Division Bench
is unsustainable as it failed to interfere with the portion of
the award which is opposed to the specific terms of the
contract. On the other hand, the trial Court had correctly
decided the matter".
d) In the decision of Hon'ble Supreme Court in Oil and Natural Gas
Corporation Limited v. Western Geco International Limited reported in
MANU/SC/0772/2014 : (2014) 9 Supreme Court Cases at Page 263 and at
Special Page 277 and 278 whereby and whereunder at Paragraph Nos. 34
and 35, it is observed and held as follows:--
"34. It is true that none of the grounds enumerated under
Section 34(2)(a) were set up before the High Court to assail
the arbitral award. What was all the same urged before the
High Court and so also before us was that the award made
by the arbitrators was in conflict with the "public policy of
India", a ground recognised under section 24(2)(b)(ii)
(supra). The expression "public policy of India" fell for
interpretation before this Court in ONGC Ltd., V. Saw Pipes
Ltd., 3 MANU/SC/0314/2003 : (2003) 5 SCC 705 and was,
after a comprehensive review of the case law on the
subject, explained in para 31 of the decision in the following
words: (SCC pp. 727-28)
"31. Therefore, in our view, the phrase 'public policy of India'
used in Section 34 in context is required to be given a wider
meaning. It can be stated that the concept of public policy
connotes some matter which concerns public good and the
public interest. What is for public good or in public interest or
what would be injurious or harmful to the public good or
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20. public interest has varied from time to time. However, the
award which is, on the face of it, patently in violation of
statutory provisions cannot be said to be in public interest.
Such award/judgment/decision is likely to adversely affect
the administration of justice. Hence, in our view in addition
to narrower meaning given to the term 'public policy' in
Renusagar case (Renusagar Power Co. Ltd., V. General
Electric Co., MANU/SC/0195/1994 : 1994 Supp (1) SCC
644 does not elaborate that aspect. Even so, the expression
must, in our opinion, include all such fundamental principles
as providing a basis for administration of justice and
enforcement of law in this country. Without meaning to
exhaustively enumerate the purport of the expression
"fundamental policy of Indian law", we may refer to three
distinct and fundamental juristic principles that must
necessarily be understood as a part and parcel of the
fundamental policy of Indian law. The first and foremost is
the principle that in every determination whether by a court
or other authority that affects the rights of a citizen or leads
to any civil consequences, the court or authority concerned
is bound to adopt what is in legal parlance called a "judicial
approach" in the matter. The duty to adopt a judicial
approach arises from the very nature of the power exercised
by the court or the authority does not have to be separately
or additionally enjoined upon the for a concerned. What
must be remembered is that the importance of a judicial
approach in judicial and quasi-judicial determination lies in
the fact that so long as the court, tribunal or the authority
exercising powers that affect the rights, or obligations of the
parties before them shows fidelity to judicial approach, they
cannot act in an arbitrary, capricious or whimsical manner.
Judicial approach ensures that the authority acts bonafide
and deals with the subject in a fair, reasonable and objective
manner and that its decision is not actuated by any
extraneous consideration. Judicial approach in that sense
acts as a check against flaws and faults that can render the
decision of a court, tribunal or authority vulnerable to
challenge.
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21. e) In the decision of Hon'ble Supreme Court in Associate Builders V. Delhi
Development Authority reported in MANU/SC/1076/2014 : (2015) 3
Supreme Court Cases at Page 49 and at Special Page 52, wherein it is
observed and held as follows:--
"Section 34 in conjunction with Section 5 of the Arbitration
and Conciliation Act, 1996 (1996 Act) makes it clear that an
arbitral award that is governed by Part I of the 1996 Act can
be set aside only on the grounds mentioned under Sections
34(2) and (3), and not otherwise. It is important to note that
the 1996 Act was enacted to replace the 1940 Arbitration Act
in order to provide for an arbitral procedure which is fair,
efficient and capable of meeting the needs of arbitration;
also to provide that the Tribunal gives reasons for an arbitral
award; to ensure that the Tribunal remains within the limits
of its jurisdiction; and to minimise the supervisory roles of
courts in the arbitral processed. (paras 15 and 16)
Merits of arbitral award can be assailed only when it is in
conflict with "public policy of India"
None of the grounds contained in Section 34(2)(a) of the
A&C Act, 1996 deal with the merits of the decision rendered
by an arbitral award. It is only when the award is in conflict
with the public policy of India as prescribed in Section 34(2)
(b)(ii) of the A&C Act, 1996 that the merits of an arbitral
award are to be looked into under certain specified
circumstances."
Discussions
26. At the outset it is to be pertinently pointed out that it is the primary duty of the
arbitrators to enforce a promise which the parties have made and to uphold the sanctum
of contract where from the jurisdiction of arbitrary flow.
27. It is to be noted that an 'Arbitral Tribunal' is the 'Final Arbitrator' of both the questions
of 'Fact and Law' referred to it for determination. The decision of the Arbitrator, being the
select judge of the parties, is ordinarily final both on 'Facts and Law' and should not be
lightly interfered with. Likewise, the Review in Court would not be justified to interfere with
the Award merely because the views taken by the Arbitrator on the question of fact or law
does not accord well within its own views. As a matter of fact, the 'Reviewing Court' is to
accept the decision an Arbitrator as long as he had acted within jurisdiction in interpreting
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22. the provisions of the Contract and had applied the law to his evaluation of the facts.
Indeed, the Arbitration and Conciliation Act, 1956 makes provision for the supervisory role
of the courts for review of the 'Arbitral Award' only to ensure fairness as per decision
McDermott International Inc. V. Burn Standard Co., Ltd., and Others MANU/SC/8177/2006
: (2006) 11 Supreme Court Cases 181.
28. It is to be borne in mind that an Arbitrator is the master of 'Facts and Law'. As such,
the findings of fact recorded by the 'Arbitral Tribunal' are conclusive and final. It cannot be
gainsaid that the finding of fact cannot be assailed on the grounds of admissibility,
relevance, materiality and weight of any evidence. In fact, the Arbitration and Conciliation
Act, 1996 does not provide for recourse against an 'Arbitral Award' on the facts or for any
'Judicial Review' of the award on its merits. If the Tribunal had jurisdiction, the correct
procedures were adhered to, and the correct formalities are observed, the award - good,
bad or indifferent is final and binding on the parties. It is not open to a Court of Law to
examine the correctness of the award on merits with reference to the materials produced
before the Arbitral Tribunal, nor can it re-examine or re-assess the materials on record to
see the correctness of the view taken by the Tribunal.
29. Furthermore, the jurisdiction of a Court of Law to set aside an Arbitral Award under
Section 34 of the Arbitration and Conciliation Act, 1996 is not an Appellate one and added
further, it cannot interfere with erroneous on fact either in the absence of perversity. It is
restricted to the grounds adumbrated in it, in the considered opinion of this Court. Also
that if the award is passed fairly, after providing adequate opportunities to the respective
parties to project their points of view in the manner provided by the Arbitration agreement,
the Award is not amenable to correction by a Court of Law. Also in the decision of Delhi
State Industrial & Infrastructure Development Corporation Limited reported in (2014) 3 Arb
LR 116 (Delhi) (Division Bench) at Paragraph No. 9, it is observed and held as follows:--
"9. We may further add that the parties, by agreeing to be bound by the
arbitral award and by declaring it to be final, agree to be bound also by
wrong interpretation or an erroneous application of law by the arbitral
tribunal and once the parties have so agreed, they cannot apply for setting
aside of the arbitral award on the said ground. Even under the 1940 Act
where the scope of interference with the award was much more, the Apex
Court in Tarapore and Co., V. Cochin Shipyard Ltd., Cochin,
MANU/SC/0002/1984 : (1984) 2 SCC 680 : 1985 Ar.LR 2 (SC) and U.P.
State Electricity Board, MANU/SC/0541/1988 : (1989) 1 SCC 359 : 1989
(1) Arb. LR 244 (SC) held that the arbitrator's decision on a question of law
is also binding even if erroneous. Similarly, in N. Chellappan V. Secretary,
Kerala State Electricity Board, MANU/SC/0002/1974 : (1975) 1 SCC 289, it
was held that even if the umpire committed an error of law in granting
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23. amount, it cannot be said to be a ground challenging the validity of the
award; the mistake may be a mistake of fact of law."
However, a Court of Law can set aside the 'Award' only if it is apparent from the award
that there is no evidence to support the conclusions or if the award is cemented on any
legal view which is latently and patently an erroneous one.
30. If an Arbitrator fails to adjudicate a counter claim and does not consider it, then
'Award' is liable to be set aside in terms of the Arbitration and Conciliation Act, 1996 [26 of
1996]. An 'Arbitrator' is not only required to decide a counter claim but is also required to
assail reasons for his decisions.
Factors to be Borne in Mind by an Appellate Court
31. When an Appellate Court deals with the 'Award' assailed in an 'Appeal' it is to bear in
mind fully the salient factors:--
"(i) A Court of Law cannot substitute its own decision as if sitting in Appeal
over the Award.
(ii) Ambit of interference that the 'Award' is limited.
(iii) A Court of Law is to look into whether there is any negation of the
'Principles of Natural Justice'.
(iv) A Court of Law can interfere only if there is an error on the face of the
'Award'.
(v) A Court of Law can interfere if an 'Arbitrator' had brushed aside/ignored
the relevant clause and the terms of the agreement.
(vi) The Award is cemented on a proposition of Law which is erroneous.
(vii) An award could not be set aside just because the reasons are spelt out
in brief.
(viii) Interpretation placed by the Arbitrator ought not be disturbed if it is
plausible and not because a Court of Law would have come to a different
conclusion.
(ix) No interference would be called for when an Arbitrator renders a finding
on a particular question of Law when authorised by the concerned parties.
(x) A Court of Law should not disturb the 'Findings' of the Arbitrator when
based on facts.
(xi) There must not be a reappreciation of the evidence by a Court of Law,
in as much as the same was considered by an Arbitrator."
32. In an Appeal against an Order refusing to set aside an award, a Court of Law is to
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24. examine whether the 'Award' in question can be challenged on the ground of excess of
jurisdiction in completeness or misconduct as understood in Law.
33. Be that as it may, it transpires from award of the Arbitrators dated 19.08.2009 that a
specific finding was rendered by the Learned Arbitrators that the Appellant/Petitioner had
committed breach and further the repudiation of Ex. C2 Agreement by the 1st
Respondent/Claimant was correct. Also the learned Arbitrators had in Paragraph Nos. 44
and 45 of the Award came to the conclusion that the 1st Respondent/Claimant was
entitled to get back the advance of Rupees One Crore paid by them for purchase of 8000
Metric Tonnes of SDS and they will be entitled to return the advance of said amount
together with interest at 12% per annum from 03.05.2005 till the date of payment.
34. Apart from that, the learned Arbitrators in their Award dated 19.08.2009 had opined
that the claim for damages in sum of Rs. 1,17,64,000/-, being the difference between the
contract price and the market price of SDS on the relevant date, could not be appealed
and hence rejected the same. In so far as the 1st Respondent/Claimant's claim to recover
the amount of Rs. 9,63,250/- and Rs. 4,75,000/- (towards prosecuting legal proceedings,
incurring of personal charges, expenses for travelling and accommodation of the
representatives of the claimants and its counsel) from the Appellant/Petitioner, the
Learned Arbitrators in their Award ultimately held that the expenditure stated to have been
incurred could at best be incidental to and form part of the costs of the proceedings and
could not be regarded as an independent item of claim and as such directed the 1st
Respondent/Claimant to bear these expenses and the Appellant/Petitioner had projected
a total counter claim for a sum of Rs. 4,40,91,351/-. In regard to the counter claim towards
cause of denaturant and handling charges amounting to Rs. 10,20,410/- the same was
held against the Appellant/Petitioner by the Learned Arbitrators in their Award.
35. Also, that the learned Arbitrators in their Award came to the conclusion that all the
items of counter claim made by the Appellant/Petitioner against the 1st
Respondent/Claimant were unsustainable etc., and finally held that no amount much less
Rs. 4,40,91,351/- could be recovered. Furthermore, the Learned Arbitrators had also not
awarded any interest, much less at the rate claimed by the Appellant/Petitioner. Moreover,
the each party was directed to bear its costs and resultantly the claim made by the 1st
Respondent/Petitioner/Claimant as regards Point No. 7 in the Award and the Point No. 4
in the Counter Claim against the Appellant/Petitioner were negatived.
36. To put it precisely, a cursory perusal of the Award dated 19.09.2009 passed by the
Learned Arbitrators unerringly points out that the claim petition filed by the 1st
Respondent/Petitioner was partly allowed and the Award was passed in favour of the 1st
Respondent/Claimant against the Appellant for recovery of a sum of Rupees One Crore
along with interest at 12% per annum from 03.05.2005 till the date of payment. In fact, the
Counter Claim was rejected and further each party was directed to bear its costs.
37. Turning to the facts of the instant case, it is to be pointed out that the 1st
Respondent/Claimant entered into an Agreement with the Appellant/Petitioner on
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25. 11.03.2005 for the purchase of 8000 Metric Tonnes of Ethyl Alcohol by way of 'Bond
Transfer' as the produce was in the custody of the Customs authorities in a 'Bonded
Warehouse'. It appears that the factory of the 1st Respondent/Claimant was situated at
Mahad, Maharashtra and it had to transport the 'Ethyl Alcohol either by sea or by road.
Further, according to the 1st Respondent specific permission of the Government was
required to sell the product in question without which the same of the same was prohibited
and that the Appellant/Petitioner had not disclosed this fact to the 1st
Respondent/claimant. The said non disclosure of material fact by the Appellant/Petitioner
is in breach of the terms of Clause 20 of the Agreement dated 11.03.2005 and
consequently, the 1st Respondent/Claimant made demand on the Appellant/Petitioner to
repay the sum of Rupees One Crore along with interest at 24% per annum from
14.03.2005 etc.,
38. It is the stand of the Appellant/Petitioner that as per the covenant of Clause 6.2 of the
Agreement dated 11.03.2005, it is the responsibility of the 1st Respondent/Applicant to
obtain the required permission from the concerned authorities. However, it is the
categorical stand of the 1st Respondent/Claimant that it is the responsibility of the
Appellant/Petitioner to obtain permission from the concerned Authorities to sell the
product in question and indeed such permission could be obtained by the
Appellant/Petitioner, being the owner of the Produce/Product.
39. At this stage, it is worthwhile for this Court to extract Clause 6.2 of the Agreement
which runs as follows: -
"The Buyer shall take the responsibility to get the required specific
permission from the Customs/State Excise authority for utilizing the
imported Special Denatured Spirit (SDS). Originally, it was imported for the
specific purpose of converting the same into Anhydrous Ethanol."
Further, Clause 20 of the Agreement under the Head 'Miscellaneous' reads as follows:--
"Time: Time shall be of the essence for the purpose of any provision of this
agreement."
"Disclosure by Parties : The parties hereto state and affirm that they have,
prior to, and at the time of entering into this Agreement, made full
disclosure of all material circumstances and information known to it
respecting the subject matter of the Agreement and transaction which
would be likely to influence the conduct or decision of the other party."
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26. 40. On behalf of the 1st Respondent it is represented that the 1st Respondent/Claimant
had avoided the Agreement mainly due to the fraudulent concealment and
misrepresentation of the facts by the Appellant/Petitioner.
41. This Court on going through the tenor and spirit of the Clause 6.2 of the Agreement
dated 11.03.2005 is of the considered view that inasmuch as 'Ethyl Alcohol' was imported
for the purpose of converting to Anhydrous Ethanol and when it was un-utilised for the
said purpose and when it was decided to sell the same to the 1st Respondent/Claimant, it
is the duty of the Appellant/Petitioner to secure the permission from the authorities
concerned. As a matter of fact, when the Appellant/Petitioner had not obtained necessary
permission from the concerned authorities for selling the produce/product in question, this
Court without any haziness or hesitation comes to an resultant conclusion that the
Appellant/Petitioner had violated the ingredients of Clause 6.2 of the Agreement.
42. In this Connection, this Court significantly points out that the Commissioner of
Prohibition and Excise through letter dated 21.04.2005 addressed to the 1st
Respondent/Claimant (with reference to letter from 1st Respondent/Claimant dated
20.04.2005) had stated the following:--
"In the reference cited it was informed that the above company has
purchased 8,000 Mts of Special DS imported from Brazil by M/s. KCP
Sugar & Industries and M/s. Jeypore Sugar & Co. Ltd., on bond to bond
transfer basis and requested to permit them to transport the goods from the
Visakhapatnam to their factory at Mahad in Raigad district of Maharashtra
State either by Sea or by road tankers.
In this connection they are informed that the above two companies have
imported Special DS for specific purpose and for any change in the
purpose or for sale of imported SDS they have to obtain specific
permission from the Govt., and without that they cannot sell the material.
For this purpose they have to approach the Govt.
As regards the request in the reference cited M/s. Laxmi Organic Industries
Ltd., are informed that they have no Locus Standi and any representation
in this regard has to be made by the owner of the property i.e. M/s. KCP
Sugar & Industries Corpn. Ltd. and M/s. Jeypore Sugar & Co. Ltd., Hence
their request cannot be considered."
43. It is quite evident from the contents of the said letter that the Appellant/Petitioner had
imported Special SDS for a specific purpose and for any change in the purpose or for sale
of imported SDS, they have to obtain specific permission from the Government and
without that they could not sell the material for which, they have to approach the
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27. Government. As such, in the considered opinion of this Court, the Appellant/Petitioner
cannot fall back upon the tenor and spirit clause 6.2 of the Agreement dated 11.03.2005.
44. Coming to the aspect of the term 'Import' under Section 2(23) of the Customs Act,
same enjoins as follows:--
"Import", with its grammatical variations and cognate expressions, means
bringing into India from a place outside India;"
Further Section 2(24) of the Act reads as under:--
"Import manifest "or "import report" means the manifest or report required
to be delivered under Section 30;
Section 2(25) of the Act reads as under:--
"Imported goods" means any goods brought into India from a place outside
India but does not include goods which have been cleared for home
consumption"
Section 2(26) defines Importer as follows:-- green book
"Importer", in relation to any goods at any time between their importation
and the time when they are cleared for home consumption, includes any
owner or any person holding himself out to be the importer;
45. It is to be pointed out that the term 'Import' signifies etymologically 'to bring in'. To
import 'Goods' into the territory of India, therefore means to bring into the Territory of
India, Goods from abroad. The course of import starts from one point and ends at another.
It starts when the 'Goods' cross the customs barrier in foreign country and ends when
they cross the customs barrier in the 'Importing Country'.
46. In the instant case, the Produce/Product is very much in the 'Bonded Ware House' and
therefore there is no process of 'Import of Goods'. Viewed in that perspective, the
Agreement dated 11.03.2005 entered into by the respective parties (namely the
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28. Appellant/Petitioner and the 1st Respondent/Claimant) is not a legally tenable one in the
Eye of Law, as opined by this Court.
Result
47. On a careful consideration of respective contentions and also this Court on going
through the entire gamut of the Award dated 19.08.2009 passed by the learned Arbitrators
and the Impugned order of the Learned Single Judge dated 06.07.2015 in O.P. No. 643 of
2009 this Court by applying its Judicial thinking mind comes to an inescapable conclusion
that the Appellant/Petitioner had committed the breach of the Agreement dated
11.03.2005 and as such it is liable to repay the advance of Rupees One Crore together
with interest at 12% per annum from 03.05.2005 till the date of payment and in this regard
the reasonings and the conclusions arrived at by the Learned Arbitrators as well as the
Single Judge of this Court while dismissing the Original Petition, do not suffer from any
material irregularities or patent perversities or legal infirmities in the Eye of Law. Looking
at from that angle, the Original Side Appeal sans merits.
In the result the Original Side Appeal is dismissed leaving the parties to bear their own
costs. Resultantly, the Order dated 06.07.2015 in O.P. No. 643 of 2015 passed by the
Learned Single Judge in dismissing the Original Petition is affirmed by this Court for the
reasons ascribed in this Appeal.
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