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IN THE HIGH COURT OF GAUHATI, ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH
PARTHIVJYOTI SAIKIA, J.
UNION OF INDIA – Petitioner
VERSUS
M/S RAITANI ENGINEERING WORKS PVT. LTD. – Respondent
Arb. Appeal No. 2 of 2021
Decided On : 05-05-2022
Arbitration and Conciliation Act, 1996 – Section34, 34(2)(b), 34 (2), 37 – No jurisdiction to remand matter to same Arbitrator unless it is so consented by both the parties – Representing the appellant – Whether, regardless of errors in application of law or determination of facts, the decision resulted from a legitimate process - Powers of the court U/S. 34 is limited and courts should not expand their own powers granted by the statute. Any such attempts by the courts while exercising their powers under S.34 of the Arbitration and Conciliation Act, 1996 shall frustrate the purpose of the above said Act itself.
(Para 15)
Finding of the court:
In appeal, decision under review not only may be confirmed, but may also be modified – In annulment, on other hand, decision under review may either be invalidated in whole or in part or be left to stand if plea for annulment is rejected – Annulment operates to negate a decision, in whole or in part, thereby depriving portion negated of legal force and returning parties, as to that portion, to their original litigating positions – Annulment can void, while appeal can modify – Section 34 is found to provide for annulment only on grounds affecting legitimacy of process of decision as distinct from substantive correctness of contents of decision – Remedy of appeal focuses upon both legitimacy of the process of decision and substantive correctness of decision.
Results: Appeal is dismissed.
JUDGMENT :
PARTHIVJYOTI SAIKIA, J.
1. Heard Mr. S. Chakraborty, learned counsel representing the appellant as well as Mr. R. Hussain, learned counsel appearing for the respondent.
2. This is an appeal under Section 37 of the Arbitration and Conciliation Act, 1996 against the judgment dated 02.01.2019 passed by the learned District Judge, Kamrup (Metro) in Misc. (Arb.) Case No. 27/2013.
3. The respondent was given a contract to build a bridge in the Lumding-Silchar Gauge Conversion Project. The total value of the contract was Rs.17,48,23,500/-. The date of completion of the project was 06.12.2007.
4. The respondent claimed that it submitted the bridge drawing on 09.08.2007 for approval. On that day, the drawing of the box girder was also submitted. The respondent claimed that due to law and order situation in the period 2006 to 2008 in the N.C. Hills area, the entire construction works were affected. During that period, government failed to restore law and order and to stop militant activities. It was further claimed that one of its employees was hit by a stray bullet while he was travelling with railway officials and other personnel of another company. The employees of the respondent company were scared and were reluctant to go to the site. In this way, construction works remained suspended for a period of 180 days. Therefore, the respondent invoked the force majeure clause on 17.11.2008 whereby the contract was terminated according to the agreement.
5. At this stage, the force majeure clause of the agreement may be quoted. Clause 17 reads as under:
PROVIDED FURTHER that if the performance in whole or in part of any obligation under this contract is prevented or delayed by reason of any such event for a period exceeding 180 (one hundred eighty) days, either party may its option terminate the contract by giving notice to the other party.”
6. So, the dispute arose accordingly. The matter went to arbitration.
7. The respondent had terminated the contract on 17.11.2008 pursuant to Clause 17 of the agreement by invoking Force Majeure Clause and before that on 16.05.2008, the respondent had issued a notice to the present appellant stating that they had stopped work from 11.05.2008. The contract was, thereafter, was terminated by the present appellant by issuing 7 (seven) days’ notice on 06.11.2008. The appellant also issued a 48 hours notice on 19.11.2008 and on 26.11.2002 issued a termination letter at the risk and cost of the present appellant.
8. Under the aforesaid circumstances, the Tribunal held that both sides simultaneously took actions and that proved that no work was going on at the site due to valid reasons. Therefore, the Tribunal further held that the termination of the contract at the risk and cost of the present respondent was not logical and it is not liable for the same. The Tribunal held that though the contract was terminated at the risk and cost of the respondent, no subsequent tender was finalized with the same terms and conditions, whi
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