1994 Supreme(Del) 857

High Court Of Delhi
GAS AUTHORITY OF INDIA LIMITED - Appellant
Versus
SPIE CAPAG, S.A. - Respondent
Interim Application 9069 of 1994
Decided On : 12/20/1994

The court held that the claims which were specifically held not to be referable to the Arbitral Tribunal by the judgment of this court dated 15th October, 1993 cannot be permitted. The Arbitral Tribunal was constituted for a limited purpose. Since, restricted reference was made to Arbitral Tribunal pertaining to the claims covered in Section VII of the Request for Arbitration. Consortium by way of placing the summary of its case, cannot be permitted to smuggle in those very claims which were specifically rejected by this court vide judgment of 15th October, 1993. The additional disputes now raised are either covered in Section VI of Request for Arbitration or are outside the arbitration agreement.

Headnote:

ARBITRATION - ICC RULES - MODIFICATION OF CLAIMS - JURISDICTION - NATURAL JUSTICE - FARE ACT - STAY OF PROCEEDINGS:

Fact of the Case:

The petitioner, GAIL, challenged the additions/modifications of claims/disputes/questions lodged by respondents 1 to 3 led by Spie Capag S. A. (Consortium) which the Consortium did while filing its statement of claims before the Arbitral Tribunal and which the Arbitral Tribunal has incorporated in the draft Terms of Reference inspite of GAIL’s protest.

Finding of the Court:

The court held that the claims which were specifically held not to be referable to the Arbitral Tribunal by the judgment of this court dated 15th October, 1993 cannot be permitted. The Arbitral Tribunal was constituted for a limited purpose. Since, restricted reference was made to Arbitral Tribunal pertaining to the claims covered in Section VII of the Request for Arbitration. Consortium by way of placing the summary of its case, cannot be permitted to smuggle in those very claims which were specifically rejected by this court vide judgment of 15th October, 1993. The additional disputes now raised are either covered in Section VI of Request for Arbitration or are outside the arbitration agreement.

Issues: 1. Whether the Consortium can modify or add new claims after the constitution of the Arbitral Tribunal? 2. Whether the Arbitral Tribunal has jurisdiction to adjudicate upon the additional claims raised by the Consortium? 3. Whether the principles of natural justice have been violated by the Arbitral Tribunal? 4. Whether the petition of the GAIL is admissible and is liable to be stayed under Section 3 of the FARE Act?

Ratio Decidendi: 1. The court held that there is no provision in the ICC Rules permitting the parties to modify, add or change the claims already made. The phrase “most recent submissions” appearing in Article 13 would mean the actual disputes having arisen between the parties as on the date the Terms of Reference are drawn up. The submissions being the matter in dispute would naturally mean the dispute as on that date. 2. The court held that the claims which were specifically held not to be referable to the Arbitral Tribunal by the judgment of this court dated 15th October, 1993 cannot be permitted. The Arbitral Tribunal was constituted for a limited purpose. Since, restricted reference was made to Arbitral Tribunal pertaining to the claims covered in Section VII of the Request for Arbitration. Consortium by way of placing the summary of its case, cannot be permitted to smuggle in those very claims which were specifically rejected by this court vide judgment of 15th October, 1993. The additional disputes now raised are either covered in Section VI of Request for Arbitration or are outside the arbitration agreement. 3. The court held that there has not been and there will not be any breach of the principles of natural justice in relation to the new claims. The summary of the Consortium’s claim was communicated to the GAIL on 18th July, 1994 with further amendments on 11th August, 1994. No complaint of the failure of the principles of natural justice was made by the GAIL prior to the Terms of Reference meeting held on 22nd and 23rd August, 1994 nor such complaint was made at the time of the meeting or in the submissions filed at that meeting with the arbitrators. It was also not the case of the GAIL before the Arbitrator that new claims were beyond the scope of the reference. 4. The court held that the proceedings cannot be stayed because para 7. 3 (b), 7. 5, 7. 6, 7. 7 since do not under the arbitration agreement, as already held by this court in its judgment dated 15th October, 1993, therefore, qua them there is no Arbitration Agreement and cannot be referred to Arbitral Tribunal. Hence, provisions of Section 3 of the FARE Act do not apply in these circumstances.

Final Decision: The petition GAIL as well as of the Consortium stands disposed. Parties are left to bear their own costs.