The dismissal of a petition under Section 34 of the Arbitration Act was justified due to the petitioner's failure to meet limitation requirements, as procedural defects impeded timely filing.

ORDER

Chandra Dhari Singh, J. (Oral)--The instant petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter "Arbitration Act") has been filed on behalf of the petitioner seeking setting aside of Award dated 29th June 2019 passed by the Sole Arbitrator.

2. A perusal of the record reveals that an Agreement was entered into between the parties on 2nd June 2016 for supply of Ghee, which was valid for 2 years. The parties exchanged e-mails and telephonic conversations to work the terms and conditions of the agreement as well as to discuss the quantity, price and other relevant details of the order to be placed. Thereafter, disputes arose between the parties with respect to the quantity requirement and the price thereto and it is the claim of the petitioner that the respondent neither remitted the entire decided amount nor did it comply with certain conditions of the agreement.

3. Ultimately, the respondent terminated the agreement vide communication/e-mail dated 29th August 2017. Subsequent thereto, the Arbitration Clause was invoked and the parties commenced the Arbitration proceedings for resolution of their dispute. The learned Sole Arbitrator made the Award dated 29th June 2019 observing that the cancellation of Purchase Order was without any risk/cost and did not amount to provisions of the agreement, there was no breach of contract on the part of the respondent herein under the Clause 5(a) governing the Delivery Schedule, non-service of formal notice did not cause any prejudice to the petitioner herein, amongst others. The learned Sole Arbitrator also held that the claimant, i.e. the respondent herein, was entitled to recover the following amount from the petitioner herein:

a. A sum of Rs.1,05,000/- paid by the former claimant, Ameet Metaplast;

b. A sum of Rs.20,00,000/- paid to the respondent as advance payment towards the proposed second Purchase Order;

c. A sum of Rs.34, 82,460/- for loss of profit; and

d. A sum of Rs.20,00,000/- towards loss of goodwill and reputation.

4. The petitioner being aggrieved by the order passed by the learned Sole Arbitrator has approached this Court assailing the same.

5. Learned counsel appearing on behalf of the petitioner submitted that the impugned Award is contrary to law and facts and has led to serious miscarriage of justice.

6. It is submitted that the Agreement entered into between the parties was in the nature of a Memorandum of Understanding and was not an executable contract stipulating any final price, quantity, quality, delivery schedule etc. There was no confirmed Purchase Order to be executed and it was impossible for the petitioner to deliver the products since the factors like procurement price of milk, delay in delivery of packaging materials, price escalation and delivery schedules were all debated between the parties. The learned Arbitrator failed to consider that the delay was on the account of the respondents changing the size and type of containers/packaging material and hence, the observation that the respondent could not be held liable for deficiency and delay as well as the change of size and delivery of packaging material is erroneous.

7. It is further submitted that the respondent terminated the said agreement without observing the terms and conditions of the agreement which required a notice of 90 days prior to the termination. Further, the learned Sole Arbitrator failed to consider that the Clause 14 of the Agreement which provided that novation of contract would no longer be binding on the parties merely because the parties did not agree