2012 Supreme(Bom) 10

2012(2) AllMR 881
High Court of Judicature at Bombay
ANOOP V. MOHTA
Axios Navigation Co. Ltd.
Versus
Indian Oil Corporation Limited
ARBITRATION PETITION NO. 132 OF 2009
Decided On : 04-01-2012

Headnote:Arbitration and Conciliation Act, 1996 - Section 31 - Challenge to award by majority - A majority award, cannot be set aside on basis of what is stated in minority award but can only set aside on basis of what is stated therein if challenge is sustained.

       Therefore, the Court under Section 34 needs to consider whether the majority view is a possible view on the basis of material on the record. The opinion expressed by dissenting arbitrator if supports the contentions raised by the loosing party, the Court just cannot overlook and deny the right of the loosing party to refer to the well assessed and detailed opinion of dissenting arbitrator. There is no quarrel with the proportion that the majority award can only be set aside on what is stated therein if challenge is sustained and not on the basis of what is stated in the minority award. But the issue is if the Court independently come to the conclusion and finds that the majority award is not correct and/or perverse and/or illegal, in that case, the Court is bound to interfere with the majority award. It cannot be stated that the Court has accepted the minority opinion to set aside the majority award. It all depends upon the facts and circumstances of each case. The loosing party and/or the Petitioners cannot be totally debarred from pointing out the opinion expressed by the dissenting Arbitrator. Every Arbitrator, is entitled to express his opinion as the institution has at the instance of the parties and selected all these arbitrator to adjudicate their dispute. To say that the dissenting arbitrator should not express his opinion and/or should not sign even the award, considering the scheme and purpose of the arbitration Act and/or the principle of fair and equitable justice, will cause hardship and injustice will hamper the scheme of the Arbitration Act, where the parties are entitled to choose their private judge and also entitled to know the view or opinion on the dispute raised.

       Arbitration and Conciliation Act, 1996 - Section 34 - Arbitration agreement - International transaction/contract needs to be made by parties on basis of international trade and practice and laws, as agreement between parties based upon international trade and practice.

       There is no doubt that the agreement as entered into between the parties is the commercial document, based upon the international trade and practice. The Arbitration Act which is on the foundation to UNCITRAL is also based upon the international commercial Arbitration practice and proceedings. Therefore, it is necessary to give business like interpretation to achieve the commercial object which commercial per have adopted and agreed accordingly. Therefore, it is necessary to give business common sense and meaning based upon the international trade and practice of such transaction. Therefore, such clause which put the restriction to make the claim within a prescribed period is against the public policy. The international transaction/contract needs to be made by the parties on the basis of the international trade and practice and laws in contra intention, will disturb the international trade and commerce.

       Arbitration and Conciliation Act, 1996 - Section 34 - Arbitral award by majority - Although the parties were aggrieved by reasoned award yet majority assenting opinion shall be treated as an award for purpose of finality or decision.

       The Court even otherwise, is entitled and empowered to express opinion on merits of the matter if case is made out even by setting aside the majority view/opinion. It cannot be stated here that the Court ought not to have looked into the reasons given by dissenting arbitrator’s opinion. Any opinion given by any of the Arbitrator whether by majority and/or by minority, if based upon the valid foundation of law and the record, just cannot be overlooked by the Court under Section 34 of the Arbitration Act, 1996. The Court’s independent reasonings irrespective of the reasons given by the majority and/or minority arbitrator should prevail.

       Arbitration and Conciliation Act, 1996 - Section 34 - Award - Court, under Section 34 of Act, cannot ignore any opinion given by any of arbitrator whether by majority or by minority, if such opinion is based upon valid foundation of law and record.

       That when the parties have aggrieved by the reasoned award, though for the purpose of finality and/or decision, the majority assenting opinion shall be treated as an award, yet the dissenting arbitrator’s reasoned opinion cannot be overlooked while deciding the objection/ contention raised by the loosing party/petitioner who has challenged the majority opinion.

       Arbitration and Conciliation Act, 1996 - Section 34 - Modification of award - The Court has power under Section 34 of Act to modify an arbitral award.

       It is to be noted that the award of the majority arbitrator was not based upon the interpretation of agreement and/or any particular clause so far as the counter-claim in question is concerned. The reasoning are based upon the material evidence placed by the rival parties on record. In view of above, if there is a wrong appreciation of material by not giving equal opportunity to both the parties and breach the principle of natural justice, the majority award, with regard to the grant of counter-claim needs interference.

       Arbitration and Conciliation Act, 1996 - Section 34 - Setting aside of award - An award by majority based on wrong appreciation of material by not giving equal opportunities to both parties and in breach of principle of natural justice, is not sustainable and liable to be set aside.

       Another facet is, Section 28 of the Contract Act itself permits the parties to get their dispute settled through the arbitration and the amount so awarded in the arbitration shall only be recoverable. In totality, therefore, the submission that any arbitration proceedings, based upon the commercial documents, where an agreement limiting the time within which party must assert its right failing which the claim of damages/compensation shall be forfeited and/or not entitled to claim damages after prescribed period, can be stated to be against the public policy and/or any such analogue doctrine.

       Contract Act, 1872 - Section 28 - Arbitration and Conciliation Act, 1996, Section 34 - Arbitration. Since parties permitted by Section 28 of Contract Act itself to get their dispute settled through arbitration hence amount so awarded in arbitration shall only be recoverable.