IN THE HIGH COURT OF DELHI
C. Hari Shankar, J.
World Window Infrastructure Pvt. Ltd. - Appellant
Versus
Central Warehousing Corporation - Respondent
Arb. A. (COMM.) 16 of 2020
Decided On : 24-11-2021

The appeal confirmed that unless fraud or special circumstances exist, arbitrary orders regarding payments or force majeure claims will not suspend contractual obligations, particularly when prior payments and actions indicate acceptance of terms.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 37(2)(b) - Appeal against orders by arbitrator concerning payment obligations and force majeure - Appellant sought injunction against invocation of bank guarantees citing force majeure due to COVID-19 pandemic - Arbitrator found operations at facility were not disrupted, thus refused relief - No basis for injunctive relief unless fraud or irreparable injustice shown. (Paras 21.2 and 67)

(B) Contracts - Interpretation - Arbitral proceedings uphold obligation to pay fixed and variable fees with annual escalation - Continued acceptance of terms and payments till February 2020 implied recognition of obligations - Dispute over terms of interpretation left for final determination, but interim measures denied as unfounded on disruptive circumstances. (Paras 17, 27.3, and 51)

Facts of the case:
The appellant, a logistics company, contracted with Central Warehousing Corporation for operational management involving fixed and variable fee structures. Payment disputes arose concerning escalations, particularly during the COVID-19 pandemic when the appellant sought exemption citing contractual force majeure. Previous payments with escalation had been consistently made until disputes led to a cessation in payments. (Paras 9-10, 19, and 33)

Findings of Court:
The court upheld the arbitrator's rulings that the appellant failed to prove funds' invocation justified under the force majeure principle, confirming that regular business operations continued. The bank guarantees were validly encashed due to the appellant's payment defaults. (Paras 31 and 66)

Issues: The primary issues included whether the pandemic situation warranted force majeure application to expunge appellant liabilities, the appropriate interpretation of contract clauses pertaining to raised fees, and the legitimacy of invoking bank guarantees secured by escrow. (Paras 21.1, 31, and 38)

Ratio Decidendi: The court reinforced the non-interference principle with arbitrator orders unless evident fraud was present, additionally emphasizing that continuity in payments undermined claims of duress or coercive agreements. (Paras 33, 42, and 46)

Result: Appeal dismissed.