Bombay High Court: In an application seeking stay on order dated 4-12-2021 passed by the Arbitral Tribunal, R.I. Chagla, J. ordered stay on the operation, effect, implementation, execution and enforcement of the impugned award while pointing out the prima facie finding of perversity or patent illegality on face of the award going into the roots of matter.
The impugned order of the Arbitral Tribunal was passed with the finding that the Minutes of Meeting (‘MoM’) dated 24-04-2017 was a new contract and the delays prior to the said date were considered on account of the new agreement. The Court viewed that by taking such delays into consideration, there was a ‘patent perversity apparent on the face of the award’. The said view was based out of Section 62 of Contract Act, 1872 which lays that in case of an alteration of contract by a new contract, the original contract in terms of delays arising prior to MOM were not to be affected as done by the Arbitral Tribunal in the award.
The Court expressed that the standards laid in Kishor Shah v. Urban Infrastructure Trustees Ltd., 2020 SCC OnLine Bom 4098 regarding unconditional stay of arbitration award, that such ‘award must be shown without any great convolutions to be facially perverse and untenable’, were prima facie met in the instant case.
The Court relied on Supreme Court’s decision in PSA SICAL Terminals (P) Ltd. v. Board of Trustees of V.O. Chidambranar Port Trust Tuticorin, 2021 SCC OnLine SC 508 wherein it was held that one of the grounds of interference with the arbitral award under Section 34 of Arbitration and Conciliation Act, 1996 was patent illegality appearing on face of the Award getting into the roots of the matter.
The Court considered that there were claims awarded by the Arbitral Tribunal including claims for unpaid bills which the Tribunal held payable to the petitioner, and the petitioner was required to make some deposit for the monetary claims awarded by the Tribunal.
The Court expressed that one could not lose sight of the fact that the arbitral award was in nature of a money decree but considering the prima facie finding of perversity or patent illegality on face of the award going into the roots of matter, the entire amount to be deposited for stay of arbitral award was not required.
Therefore, the Court ordered stay on the operation, effect, implementation, execution and enforcement of the impugned award dated 4-12-2021, subject to the petitioner depositing a sum of Rs 1.15 Crores with the Prothonotary and Senior Master of the Court and directed the Prothonotary and Senior Master of the Court to invest the said sum in a Fixed Deposit in a Nationalised Bank. The Court granted liberty to the respondent to make an appropriate application for withdrawal of the said amount.
[Oasis Landmark LLP v. Gannon Dunkerley & Co. Ltd., Interim Applications No. 1512-1513 of 2023 in Commercial Arbitration Petition No. 252 and 293 of 2022, Order dated 23-08-2023]
Advocates who appeared in this matter
For Petitioner: Senior Advocate Zubin Behramkamdin, Advocate Jennifer Michael, Advocate Kapil Madan, Advocate Prerak Talati – Jain Law Partners LLP
For Respondent: Advocate Karl Tamboly, Advocate Ryan D’Souza, Advocate Sapana Rachure
