FAO(OS) 342/2009 and CM 11287/2009

The question canvassed before us is whether the learned Single Judge fell in error in remitting the disputes back to the Arbitral Tribunal. Briefly stated, the Arbitral Tribunal had constituted an Expert Committee to hear the parties and adjudicate upon the damages, if any, which could be awarded to the Canara Bank/ Respondent No. 1 or Renewable Energy System Ltd. (RESL for short)/Respondent No.2, for the failure by Bharat Sanchar Nigam Limited (BSNL), to place confirmed Orders of Solar Power Generating System. It appears that according to the Respondents, confirmed contract for 9070 Solar Power Generating System had been placed by the Appellant on RESL, out of which, only 1000 were actually ordered and supplied. The arrangement was that Canara Bank would advance funds to RESL and the products when manufactured would be leased out to the Appellant. RESL had actually supplied and sold these 1000 units to Canara Bank, which in turn, had given them out on lease to the Appellant. Lease charges amounting to about rupees 2.6 crore had not been paid. It is brought to our notice that this amount has since been deposited by the Appellant in this Court.

2. The question whether there is power to remit the A ward for fresh determination under Section 34(4) of the Arbitration and Conciliation Act, 1996 is no longer in question, so far as this Court is concerned. Such an Order has been passed by a Division Bench of this Court in National Highway Authority of India Limited v. ITDC Cementation India Ltd., 2008 (100) DRJ 431 (DB). According to learned Counsel for the Appellant, the argument that Section 34(4) does not envisage such an action had not been specifically raised before the Division Bench. Even if that be so, this question had specifically been raised and answered by a Division bench in Vindhya Tele Links Ltd. v. Bharat Sanchar Nigam Limited, in FAO(OS) 433/2006 while remanding/remitting back to the learned Arbitrator the disputes pertaining to some other claims. Review preferred by the BSNL before the said Bench substantially on the ground that the power to remit disputes to the Arbitrator was foreign to the Arbitration and Conciliation Act was rejected vide Order dated 18.9.2009. This very question was thereafter taken by way of Special Leave to Appeal (Civil) 4768/ 2010 to the Honble Supreme Court. The Special Leave Petition, however, was dismissed. We are, therefore, of the view that the power to remit disputes back to the Arbitral Tribunal are envisaged in Section 34(4) of the Arbitration and Conciliation Act, 1996.

3. No ground for interference is made out. Appeal is dismissed. Interim Orders stand recalled.

Appeal dismissed.