The Arbitrator's findings are not amenable to judicial review unless they are perverse or patently illegal.

JUDGMENT :

1. Ahlcon Parenterals (India) Ltd. (hereinafter ‘Ahlcon’), a company incorporated under the Companies Act, 1956, has filed the present petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter the ‘A&C Act’) impugning an Arbitral Award dated 31.08.2020, as amended on 16.09.2020 and 26.09.2020 (hereafter ‘the impugned award’) delivered by the Arbitral Tribunal comprising of a former judge of the Supreme Court of India as the Sole Arbitrator.

2. The impugned award has been rendered in the context of disputes that have arisen between the parties in relation to a Loan License Agreement (hereafter ‘the Agreement’) dated 25.01.2012, which was further on 21.01.2015 and 20.01.2017.

3. Ahlcon had claimed an amount of Rs.3,87,07,178.39 along with interest. The Arbitral Tribunal partly allowed the claims and by the impugned award, entered an award for an amount of Rs.1,39,76,327 with interest at the rate of 12% per annum from 25.01.2015 till the date of payment. The Tribunal further awarded proportionate cost in relation to the proceedings, incurred by the petitioner.

4. Ahlcon assails the impugned award to the limited extent that the Arbitral Tribunal has disallowed its claim to the extent of Rs.2,57,61,614.52, which Ahlcon claims were due and payable in respect of products supplied to M/s Rowtech Ltd. and M/s Alter Ego Ltd.

5. Ahlcon is engaged in the business of manufacturing and selling pharmaceutical formulations. Ahlcon manufacturing facility is located at Bhiwadi, Rajasthan. Ahlcon states that it had spare capacities at its manufacturing facilities and the respondent (hereinafter ‘Scan Biotech’) was desirous of utilising the same. Therefore, the said parties entered into the Agreement dated 25.01.2012, whereby Ahlcon agreed to manufacture certain formulations on job work basis on the terms and conditions as set out in the Agreement. In terms of the Agreement, the formulations were to be manufactured strictly according to the specifications as provided by Ahlcon.

6. The Agreement (Loan License Agreement – LLA) continued to be in operation till 24.01.2019.

7. Ahlcon claimed that it had supplied finished products (formulations) to Scan Biotech and to other entities at the instance of Scan Biotech. It claimed that Scan Biotech used to accept deliveries of the formulations supplied in India at Ahlcon’s manufacturing facility. However, insofar as the exports are concerned, Ahlcon used to dispatch the products in question to various entities at the instance of Scan Biotech.

8. The overseas entities included M/s Spring Bourne Management and Trading Ltd. at UK, M/s Rowtech Ltd. at UK (hereinafter ‘Rowtech’) and M/s Alter Ego Ltd. at Ukraine (hereinafter Alter Ego). Ahlcon claimed that M/s Spring Bourne Management and Trading Ltd. was a sister concern of Rowtech and Scan Biotech had issued a corporate guarantee to secure the payments due to Ahlcon for the formulations exported to M/s Spring Bourne Management and Trading Ltd. According to the Ahlcon, this established that supplies were made by it to Rowtech and AEL at the instance of the Scan Biotech.

9. The controversy involved in the present petition, essentially, relates to payments claimed by Ahlcon for the products exported to Rowtech and Alter Ego.

10. Whilst Ahlcon claimed that Scan Biotech was also liable to pay for the supplies made by Ahlcon to Rowtech and Alter Ego, Scan Biotech disputed the same. According to Scan Biotech the said supplies were made against invoices raised on the said entities and Scan Biotech had no liability for such supplies. Amount due, if any, against such supplies was payable by those entities and not by Scan Biotech.

11. The claims made by Ahlcon in the Statement of Claims are summarised as under:-