Case BriefsHigh Courts

Bombay High Court: The Bench of S.C. Gupte, J. while addressing an arbitration petition challenging the award passed by a sole arbitrator, noted the points of evidence asserted by the sole arbitrator and dismissed the petition.

In the present petition, the crux of the issue involved an agreement for manufacturing of the petitioner’s liquor products. The particular agreement was between the petitioner (who was the respondent to the reference) and the respondent (who was the claimant before the arbitral forum) inter alia engaging services of respondent for manufacture, on a priority basis of various liquor products of the petitioner in the State of Maharashtra.

Respondent stated in his points of contentions that in a meeting held between the representatives of the parties, it was agreed that bottling charges would be increased by Rs 10 per case. Claimant had sent out an e-mail with a letter requesting the petitioner to confirm the minutes of the meeting held for which no response from the petitioner was received. Further, it was stated that though respondent did not receive any written communication from the petitioner, respondent, with consent from the petitioner, went on adjusting from jointly operated account payments towards bottling charges at the rate of Rs 40 per case.

Petitioner in his behalf placed that, a sum of Rs 40,46,165.87 was due and payable by the petitioner to the respondent after the payments adjusted. Further, for the said amount, it was agreed between the petitioner and the respondent that the petitioner would pay the same in four installments which never got fulfilled.

A legal notice was sent to the petitioner regarding the above stated and thereafter present reference was filed.

Learned sole arbitrator while giving its award held that the petitioner had failed to pay the agreed amount and as a result, awarded a sum of Rs 64,08,685.82, comprising of the principal amount as stated above along with interest. The said award has been challenged under Section 34 of the Arbitration and Conciliation Act, 1996.

While concluding the decision, the bench stated that the oral agreement was consistently acted upon by the parties for a long period of time. “Whatever view the Court may take of an oral modification clause generally or in the particular case we are concerned with, the mandate of challenge to the court under Section 34 of the Act is to see whether the view taken by the arbitrator, even if it be on a question of law or its application to the facts of the case, is a possible view or view which a fair and judiciously minded person could well take.” Therefore, the view taken by the arbitrator could well be said to be a possible view and supported by evidence. The view must pass muster under Section 34 of the Act.

Thus, the challenge to the impugned award had no merit and the petition was accordingly dismissed. [John Distilleries (P) Ltd. v. Brihan Maharashtra Sugar Syndicate Ltd., 2019 SCC OnLine Bom 67, dated 14-01-2019]

Case BriefsHigh Courts

Jharkhand High Court: An arbitration appeal was filed before a Single Judge Bench comprising of Shree Chandrashekhar, J., under Section 37(1)(b) of Arbitration and Conciliation Act, 1996.

Facts of the case were that claimant, a construction company, was allotted the construction work of open channel and tunnel under Konar Irrigation Project and for the same, an agreement was executed. The construction work was to be completed in 3 years where time was the essence of the contract. Claimant had conveyed the problem faced by them in construction but the response of the Water Resources Department for the same took a long time. Claimant approached the Superintending Engineer, Tenughat Dam Circle to enter into arbitration and entering the same, arbitration took place and an award favouring claimant was passed.

The award was challenged by the Department by a petition under Sections 12, 13, 16 and 34 of the Act before the High Court. Impugned order’s legality was in question on the ground that the claims of claimant were barred under the limitation law. Claimant contended that Arbitrator answered the issue of limitation which is a question of fact against the Department and therefore it was not open to re-examination under Section 34 of the Act.  Court viewed that it would be wrong to completely immune finding in arbitration from judicial scrutiny in a proceeding under Section 34 or Section 37 as the same cannot be done if an error on the face of award is found.

High Court was of the view that the finding by Arbitrator of the claims not barred by limitation was an error apparent on the face of the award. Therefore, the arbitration appeal partly succeeded and impugned order to the extent where claims of claimant were allowed was declared time-barred claims and was set aside. [State of Jharkhand v. Sutlej Construction Limited,2018 SCC OnLine Jhar 1474, dated 12-10-2018]