2020 Supreme(Del) 113

IN THE HIGH COURT OF DELHI AT NEW DELHI
YOGESH KHANNA, J.
Sporty Solutionz Pvt. Ltd. – Petitioner
Versus
Badminton Association of India Through its President & Another – Respondents
O.M.P. (COMM). Nos. 316, 362 of 2017
Decided On : 07-02-2020

Headnote:

Petitioner challenged the arbitral award dated 08.05.2017 passed by the sole arbitrator. The petitioner alleged that the respondent no.1 cancelled IBL altogether in the year 2014 (30.09.2014 to 15.10.2014 - The dates fixed for the IBL) and the next tentative dates fixed were January-February, 2015 without any prior notice or consultation with the Petitioner. The petitioner also alleged that the respondent no.1 issued press statements that it had decided to "rechristen the Indian Badminton League (IBL) as Premier Badminton League (PBL), which will be held from January 2 to 17, 2016. The petitioner claimed specific performance of the said agreement and order of restraining the respondents from holding any badminton tournament under the name of 'Premier Badminton League' or 'PBL' or any other name. The petitioner claimed Rs.21,26,57,871/- towards the expenses incurred by it during the financial year 2012-13, 2013-14 & 2014-15 and interest thereon @ 24% per annum and Rs.18,335 lacs towards loss of profit which the petitioner would have earned during 10 years contractual period. The learned Arbitral Tribunal made the Award wherein it is held the termination of the Agreement dated 16.07.2013 the respondents vide notice dated 21.04.2015 although, not in terms of Clause 11 of the 2013 agreement, subject to the Respondent No.1 paying compensation of Rs.2.5 crores to the Petitioner within a period of three months from the date of delivery of the award. It is alleged vide the said Award, the learned Arbitral Tribunal wrongly held the 2013 agreement was no longer subsisting between the parties and had rejected all other reliefs/claims sought by the petitioner in the statement of claim. Vide the said award the learned Arbitrator has also rejected the counter claims filed by respondent no.1, hence this petition.

Fact of the Case:

The petitioner and the respondents No.1 & 2 entered into a tripartite agreement dated 16.07.2013 executed between the petitioner and the respondents No.1 & 2 wherein all the rights qua the events were given to the petitioner for holding events for ten years and to commercially exploit the events by earning revenue in every possible way through banners, media, advertisements etc and in turn they were bound to pay fees which was, initially, for the first year at Rs.1.00 Crores and later was subject to increase. The petitioner came across a news item published on http://www. televisionpost.com/news/bai-awards-longterm- rights-of-premier-badminton-league-tosportzlive/dated 16.09.2016 announcing that the respondent No.1 has awarded long term rights of its franchise based Indian Badminton League (IBL) which was rechristened as Premier Badminton League (PBL) for year 2017.

Finding of the Court:

The petitioner had accepted damages of Rs.2.50 Crore towards the termination period, hence is now estopped to challenge the award or claim interest. Award can be challenged, primarily, on grounds viz being patently illegal; or opposed to public policy; or in violation of fundamental policy of Indian law. Section 34(2) (b) (ii) with explanation 2 and 2A of the Act are:- “34 Application for setting aside arbitral award.” (1) xxx. (2) An arbitral award may be set aside by the Court only if— (a) xxxx (b) the Court finds that— (i) xxx (ii) the arbitral award is in conflict with the public policy of India. Explanation 2. — For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute. 2A An arbitral award arising out of arbitrations other than international commercial arbitrations, may also be set aside by the Court, if the Court finds that the award is vitiated by patent illegality appearing on the face of the award: Provided that an award shall not be set aside merely on the ground of an erroneous application of the law or by re-appreciation of evidence. 28 Rules applicable to substance of dispute. – (1) and (2) xxx (3) While deciding and making an award, the arbitral tribunal shall, in all cases, take into account the terms of the contract and trade usages applicable to the transaction.” A bare perusal of the above provisions would show the petitioner cannot claim a review on merit and neither the erroneous application of law nor re-appreciation of evidence can be a ground of appeal. Per Section 28(3) of the Act the Arbitrator shall take into account the terms of the contract. This is at variance with the earlier law viz Section 28(3) of the Act, prior to amendment, wherein the arbitrator was to decide the dispute in accordance with the terms of the contract and hence the interpretation of the contract is within the domain of the Arbitrator alone. Thus the law as it stands today is examining the terms of the contract is exclusively within the jurisdiction of the learned Arbitrator. The Arbitrator alone has the power to interpret the terms of the contract and to examine the dispute purely in accordance with such terms. Now, if two views are possible on such terms, the view the learned Arbitrator has taken, ought to be followed until and unless there is patent illegality in it. This Court cannot sit in appeal under Section 34 of the Act to impose its own views if the view taken by the arbitrator is correct but even second view is possible.

Issues: Whether the petitioner is entitled to challenge the arbitral award dated 08.05.2017 passed by the sole arbitrator.

Ratio Decidendi: The petitioner had accepted damages of Rs.2.50 Crore towards the termination period, hence is now estopped to challenge the award or claim interest. Award can be challenged, primarily, on grounds viz being patently illegal; or opposed to public policy; or in violation of fundamental policy of Indian law. Section 34(2) (b) (ii) with explanation 2 and 2A of the Act are:- “34 Application for setting aside arbitral award.” (1) xxx. (2) An arbitral award may be set aside by the Court only if— (a) xxxx (b) the Court finds that— (i) xxx (ii) the arbitral award is in conflict with the public policy of India. Explanation 2. — For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute. 2A An arbitral award arising out of arbitrations other than international commercial arbitrations, may also be set aside by the Court, if the Court finds that the award is vitiated by patent illegality appearing on the face of the award: Provided that an award shall not be set aside merely on the ground of an erroneous application of the law or by re-appreciation of evidence. 28 Rules applicable to substance of dispute. – (1) and (2) xxx (3) While deciding and making an award, the arbitral tribunal shall, in all cases, take into account the terms of the contract and trade usages applicable to the transaction.” A bare perusal of the above provisions would show the petitioner cannot claim a review on merit and neither the erroneous application of law nor re-appreciation of evidence can be a ground of appeal. Per Section 28(3) of the Act the Arbitrator shall take into account the terms of the contract. This is at variance with the earlier law viz Section 28(3) of the Act, prior to amendment, wherein the arbitrator was to decide the dispute in accordance with the terms of the contract and hence the interpretation of the contract is within the domain of the Arbitrator alone. Thus the law as it stands today is examining the terms of the contract is exclusively within the jurisdiction of the learned Arbitrator. The Arbitrator alone has the power to interpret the terms of the contract and to examine the dispute purely in accordance with such terms. Now, if two views are possible on such terms, the view the learned Arbitrator has taken, ought to be followed until and unless there is patent illegality in it. This Court cannot sit in appeal under Section 34 of the Act to impose its own views if the view taken by the arbitrator is correct but even second view is possible.

Final Decision: The petition is bereft of any merits and accordingly is dismissed. Pending applications, if any, also dismissed. Parties to bear their own costs.