R.F.NARIMAN, B.R.GAVAI
PSA SICAL Terminals Pvt. Ltd. – Appellant
Versus
Board of Trustees of V. O. Chidambranar Port Trust Tuticorin – Respondent
Certainly. Based on the provided legal document, the key points are as follows:
The Arbitral Tribunal is not a Court of law and its orders are not judicial orders. It cannot exercise powers ex debito Justitiae and must operate within the scope of the contract and the law (!) (!) .
The role of the Arbitrator is to arbitrate within the terms of the contract. They have no authority beyond what is granted by the parties' agreement, and cannot unilaterally alter or substitute the terms of the contract without mutual consent (!) (!) .
A contract duly entered into between parties cannot be unilaterally substituted or amended without the consent of all parties involved. Any attempt to do so would breach fundamental principles of justice and the contractual agreement (!) .
Judicial intervention to reappreciate evidence or interfere with the merits of an arbitral award is limited. Such interference is only justified if the award is in violation of public policy, involves patent illegality, or is perverse, based on no evidence, or ignores vital evidence (!) (!) (!) .
An arbitral award can be set aside if it involves a patent illegality that goes to the roots of the matter or if it is based on no evidence or is perverse. Errors of law or mere erroneous applications of law, without going to the core of the matter, are generally not sufficient grounds for setting aside an award (!) (!) .
The scope of judicial review under Sections 34 and 37 of the Arbitration Act is narrow. Courts are not to act as appellate bodies but only to ensure that the arbitral process has not exceeded its jurisdiction or violated fundamental principles, especially public policy or natural justice (!) (!) .
Change in law, as defined in the contractual provisions, can provide grounds for relief if it substantially and adversely affects the rights of the Licensee and alters the commercial viability of the project. However, the interpretation of such clauses depends on the conduct of the parties and the context of the agreement (!) (!) .
The Arbitrator's authority is confined to the terms of the contract. Any deviation or alteration, such as substituting the royalty payment method with a revenue-sharing model against the explicit wishes of one party, constitutes a breach of jurisdiction and fundamental principles of justice (!) (!) .
The conduct of the parties, including their representations, correspondence, and the course of their dealings, is relevant in interpreting the contract and determining the intention of the parties. Such conduct can influence the scope and interpretation of contractual clauses (!) .
The document emphasizes that the arbitration process and the courts should not rewrite or modify the contract, especially by unilateral or unjustified amendments that alter the fundamental terms agreed upon by the parties (!) (!) .
The judgments reinforce that interference with arbitral awards is only justified in exceptional circumstances, such as when the award shocks the conscience or breaches fundamental principles of justice, and not for mere errors or disagreements with the outcome (!) (!) (!) .
Overall, the legal principles highlight the importance of respecting the contractual scope of arbitration, limiting judicial review to violations of public policy or patent illegality, and ensuring that arbitrators do not exceed their jurisdiction or alter the contractual balance unilaterally.
JUDGMENT :
B.R. GAVAI, J.
1. The appellant has approached this Court being aggrieved by the judgment and order dated 1st November 2017, passed by the Division Bench of the Madras High Court in C.M.A. (MD) No. 345 of 2016 and C.M.P. (MD) No. 4867 of 2016, thereby allowing the appeal of the respondent No. 1 herein under Section 37(1)(c) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘the Arbitration Act’) vide which the High Court set aside the award dated 14th February 2014, passed by the Arbitral Tribunal and the order passed by the District Judge dated 25th February 2016, rejecting the application filed by the respondent No. 1 herein under Section 34 of the Arbitration Act.
2. The facts necessary for adjudication of the present appeals are as under:
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