Judicial review of arbitral awards is limited, focusing on patent illegality and public policy; courts should respect arbitrators' decisions unless they lack evidence or contravene explicit terms of the contract.

JUDGMENT :

ARAVIND KUMAR, J.

1. Heard. Leave Granted.

2. We have been called upon to examine the correctness of the Judgement and order dated 03.05.2023 passed by the High Court of Chhattisgarh at Bilaspur in ARBA No. 05 of 2017 whereby the arbitral award dated 15.07.2012 passed by the sole Arbitrator awarding a sum of Rs. 3,71,80,584 (Three crores seventyone lacs eighty thousand five hundred eighty-four only) along with the statutory interest to the appellant, affirmed by the Commercial Court by judgement and order dated 02.01.2017 in MJC No. 33/16 while exercising jurisdiction under section 34 Arbitration and Conciliation Act, 1996 (hereinafter “A&C Act”) has been set aside by the High Court in exercise of its limited appellate jurisdiction under section 37 of the A&C Act.

3. The facts shorn of unnecessary details are set forth herein under:

3.1. The respondent-Bharat Aluminum Company Limited (in short “BALCO”) invited a tender for the purpose of mining and transporting 3,70,000 Metric Tons (MTs) of Bauxite from Mainpat mines to respondent’s Korba Alumina plant. The appellant submitted his bid at Rs. 697/- per metric ton which happened to be the lowest among all the bids received. Therefore, the respondent, after negotiation, entered into an agreement with the appellant for mining and transporting of 2,22,000 MTs of Bauxite from the Mainpat Mines to Alumina plant at rate of Rs. 634.20 per MT on 11.12.1999. The said work had to be completed within a period of 18 months i.e., by May 2001 but it was extended up to September 2001. After the appellant had completed supplying the agreed quantity of bauxite, the respondent by letter dated 05.01.2002 requested the appellant to continue the work of mining and transporting and the rate for the extra work was agreed to be decided in due course of time after consulting with the appellant. Thereafter, appellant continued the work and supplied total quantity of 1,95,000 MT of Bauxite between 16.06.2001 to 31.03.2002. Subsequently, dispute arose between the parties regarding the payment of extra work performed by the appellant which led to invocation of arbitration clause and the claimant approached the High Court by filing an application seeking appointment of an arbitrator under section 11(6) of the A&C Act. The High Court by way of order dated 12.04.2007 in MCC No. 192 of 2006 referred the said dispute to the Tribunal as per clause J of the agreement between the parties.

3.2. The sole arbitrator after considering the pleadings filed by the appellant and respondent formulated 13 (Thirteen) issues. The learned sole arbitrator after hearing both the parties at length passed the arbitral award dated 15.07.2012 in favour of the appellant as follows:

Claim Heading Description Amount Awarded

Para 19.1 Claim for extra work of 1,95,000 MT allowed @Rs. 10 per metric ton Rs.31,85,000/- (including interest @10% p.a. from 31.03.2001 till Aug 2007

Para 19.2 Claim for restriction and quantity of Trucks resulting in extra cost of transportation Rs.1,23,06,058/- (including interest @10% p.a. from March 2002 till July 2007)

Para 19.3 Claim for removal of extra overburden Nil

Para 19.4 Claim for idle manpower and machinery during the strike period of 67 days Rs.71,36,568/- (including interest @10% p.a. from 13.03.2001 till 25.08.2007

Para 19.5 Claim on interest on account of delay in respect of 15th R.A. Bill Rs.8,30,157/- (Interest has been awarded @18% p.a. for a period of 90 days and thereafter from 01.06.2001 to 31.08.2007

TOTAL Rs. 2