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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NITIN JAMDAR, C.V. BHADANG, JJ.
Oil & Natural Gas Corporation Ltd. - Appellant
Versus
A Consortium of Sime Darby Engineering Sdn. Bhd. - Respondent
Commercial Appeal No.55 of 2020 In Chamber Summons (L) No.445 of 2019 In Commercial Arbitration Petition No.437 of 2018
Decided On : 03-07-2021
Arbitration and Conciliation Act, 1996 - Sections 34 and 37 - Award - Work construction - Whether an appeal under Section 37 is maintainable - Appellant- ONGC issued a tender for the work - Construction and commissioning for entire facilities of one well cum process platform with living quarters cum power generation cum water injection on an independent jacket - Respondents invoked an arbitration clause and issued notice appointing an arbitrator and called upon Appellant to appoint its arbitrator - Arbitral tribunal was then constituted - Parties filed their pleadings - Appellant filed counterclaims - Appellant was held liable to pay Respondent a sum of USD in full and final settlement of rival claims - Interest at 14% per annum from award till payment was granted.
Finding of the Court: Challenging order of condoning the delay in filing Petition under Section 34 is not maintainable, it does not mean there is no remedy - Arbitral award is set aside in part or in whole and the Appellant is aggrieved, he may prefer an appeal under Section 37 both on merits and on ground delay ought not to have been condoned - Bench observed remedy of challenging decision of condoning the delay is not extinguished but is deferred till final decision of the court on the pending Section 34 petition.
Result: Appeal is dismissed.
Key Points: - The appeal under Section 37 is not maintainable for orders that do not fall within Section 37(1) categories; the Court held the present appeal not maintainable (!) . - Section 37(1)(c) allows an appeal against setting aside or refusing to set aside an arbitral award under Section 34, and the Effect Test may apply to determine maintainability in certain scenarios (e.g., condonation of delay) per Chintels India Ltd. v. Bhayana Builders Ltd. (!) (!) (!) [p_13 p_14]. - The Apex Court decision Kandla Export Corporation v. OCI Corp. is cited for the principle that only those appeals challenging the specific orders under Section 37 are maintainable (!) . - The Division Bench decisions (e.g., Raghuvir Cotton… and Harmanprit Singh Sidhu) are discussed as contrasting views on maintainability of amendments/challenges under Section 37 (!) (!) . - The judgment clarifies that refusing to condone delay in filing under Section 34 may lead to an appeal under Section 37(1)(c), but this does not expand to all amendment rejection scenarios (!) (!) . - The court emphasizes speed and minimal challenges in arbitral proceedings and warns against a practice of filing repeated amendments to prolong proceedings (!) . - The Court ultimately dismisses the appeal as not maintainable (!) . - The observations in this judgment pertain to maintainability, not the merits of the impugned order (!) . - The case involved ONGC challenging an arbitral award and seeking amendments to the petition under Section 34 (!) (!) (!) . - The impugned order granted some amendments and rejected others, which formed the basis of the challenge to Section 34 petition’s maintainability (!) (!) .
JUDGMENT :
Nitin Jamdar, J.
(Through Video Conferencing)
The Appellant- Oil & Natural Gas Corporation Ltd. has filed a Commercial Arbitration Petition under Section 34 of the Arbitration and Conciliation Act, 1996 before the learned Single Judge challenging the arbitral award rendered against the Appellant. In this petition, the Appellant took out a chamber summon to amend the original petition. By the impugned order, the learned Single Judge granted some amendments and rejected the other amendments. The Appellant, by this appeal, has challenged the order of the learned Single Judge rejecting the amendments.
2. Preliminary objection is taken by the Respondent to the maintainability of the appeal. To consider the preliminary objection, a brief narration of facts is necessary, and it is as follows:
3. The Appellant- ONGC issued a tender on 29 May 2009 for the work- ‘The construction and commissioning for entire facilities of one well cum process platform with living quarters cum power generation cum water injection on an independent jacket.’ On 19 May 2010, the tender was awarded to the Respondents for works amounting to USD 618376022/-. Pursuant to the same, an agreement was executed between the parties on 3 July 2010. A dispute arose between the parties regarding the said contract. The Respondents invoked an arbitration clause and issued notice on 1 June 2016 by appointing an arbitrator and called upon the Appellant to appoint its arbitrator. An arbitral tribunal was then constituted. The parties filed their pleadings. The Appellant filed counterclaims. The arbitral tribunal heard the parties and delivered the majority award on 22 March 2018. The Appellant was held liable to pay the Respondent a sum of USD 5127915.40 (INR 333724734/-) in full and final settlement of rival claims. Interest at 14% per annum from the award till payment was granted. Most of the counterclaims were rejected.
4. Being aggrieved by the Award, the Appellant filed Arbitration Petition No.437/2018 on 26 March 2018. On 25 March 2019, the Appellant took out Chamber Summons (L) No. 445/2019 to amend the Arbitration Petition and add grounds to challenge the Award. The schedule of amendments contained various grounds to be added. The Respondent filed its reply to the chamber summons and contested the chamber summons. The learned Single Judge grouped the amendments into three categories. First, the grounds R to TT (except SS) pertaining to the challenge to the counterclaim of the Appellant being rejected by the Arbitrators. The second, grounds SS to W and III, elaborated the existing grounds of challenge regarding the delay and liquidated damages. The third, pertaining to various individual claims not raised during the contract work but were claimed as additional work.
5. After noting the law on the subject regarding amendments, more particularly amendments to the arbitration petition filed under Section 34 of the Act of 1996, the learned Single Judge opined that the grounds in the elaboration of existing grounds, i.e. the second category of grounds need to be granted. As for the third category, the learned Single Judge observed that these grounds were additional grounds of challenge and could not have been taken up after the expiry of the period of limitation. So far as the first category of grounds, the learned Single Judge observed that in respect of the counterclaim, there are new grounds and would introduce a new claim or cause of action, and no circumstances exist why an exception should be made in an ordinary rule of not granting amendments after the period of limitation. The learned Single Judge, thus, by the impugned order dated 28 August 2019, granted some of the amendments and rejected the others as above.
6. This order is under challenge before us in the present appeal. According to the Appellant, the chamber summons ought to have been allowed in entirety. A preliminary objection is taken by the Respondent to the maintainability of the appeal, contending t
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