IN THE HIGH COURT OF JUDICATURE AT MADRAS
Sanjib Banerjee, P.D. Audikesavalu, JJ.
M/s. ENEXIO Power Cooling Solutions India Pvt. Ltd., No.443, Rep. by President & CEO T. Parasuram – Appellant
Versus
Gita Power and Infrastructure Pvt. Ltd., Rep. by its Authorised Signatory, Kaushik Ganguly & Another – Respondents
O.S.A.(CAD) Nos. 174 &175 of 2021
Decided On : 01-09-2021
Arbitration and Conciliation Act, 1996 - Section 34 - Application for setting aside arbitral award - An award rendered by the arbitral tribunal constituted by International Chamber of Commerce (ICC) has been rendered to naught on perception of arbitration court that period of limitation applicable to claim and counter-claim may not have been appropriately reckoned and that arbitral tribunal failed to take into account evidence that was before it and ignored same - In effect, arbitral award has been set aside on the ground that it was opposed to public policy as being contrary to law of land - Arbitration court has also proceeded to render independent findings on certain aspects despite award dealing with such matters in great detail - Held, If “A” and "B” are found to have been in negotiation and there is some written evidence of negotiation, where “A” asserts as a creditor, the very fact that there is evidence of negotiation is a virtual acknowledgment of jural relationship between parties - Judgment cannot be read to have provided any more than what is already permissible in law - Judgment reveals a completely different basis for reckoning what period of limitation ought to have been without expressly referring to the findings in the arbitral award or discussion relevant in such regard. Indeed, impugned judgment embarks on an independent exercise to assess claim or validity thereof, which is scarcely possible within restricted ambit of authority available under relevant statutory provision - O.S.A. allowed.
JUDGMENT :
Sanjib Banerjee, J.
(Prayer: Appeals filed against the common Judgment and Decree dated 23.12.2020 passed in O.P.No.562 of 2020 and O.P.No.533 of 2020 on the file of original side of this court.)
1. The flourishing export of litigation by this country may continue unabated till the penchant for wanton tinkering with arbitral awards is reined in. Despite instructive pronouncements in recent years beginning the Associate Builders case [(2015) 3 SCC 49], the narrow ambit of authority available in this jurisdiction, sometimes, appears to be beyond the comprehension of courts in receipt of challenges to arbitral awards.
2. In the present case, an award rendered by the arbitral tribunal constituted by the International Chamber of Commerce (ICC) has been rendered to naught on the perception of the arbitration court that the period of limitation applicable to the claim and the counter-claim may not have been appropriately reckoned and that the arbitral tribunal failed to take into account evidence that was before it and ignored the same. In effect, the arbitral award of July 13, 2020 has been set aside on the ground that it was opposed to public policy as being contrary to the law of the land. The arbitration court has also proceeded to render independent findings on certain aspects despite the award dealing with such matters in great detail.
3. It may do well to recount the rules of assessment in this jurisdiction at the outset. The court exercising authority under Section 34 of the Arbitration and Conciliation Act, 1996 does not assume appellate authority. Indeed, it has been the refrain in this jurisdiction over a century and more of jurisprudence that has developed that the court is loathe to correct any error since the parties had abandoned the sovereign forum of the court and had agreed to carry their disputes to a consensual forum. There is no doubt that the court exercises a degree of superintendence; but, ordinarily, errors of jurisdiction are corrected, rather than errors within jurisdiction. It is also accepted, as in the case of exercise of discretion, that if two views are possible on an issue or an aspect, that the other view appears more plausible to the court may not empower the court to supplant its view over the arbitral tribunal’s while assessing the propriety of an award.
4. The contract here provided for the setting up of a cooling tower in Gummudipoondi. The claim of the appellant contractor was on account of the work and supplies for which it remained unpaid. The counter-claim by the respondent employer was on account of liquidated damages for the delay in the erection and commissioning of the plant, the customs duty component which it ought to have been reimbursed and sundry other claims on account of damaged gear box or faulty ducts or the like.
5. The contentions put forth on behalf of the respondent while challenging the award have been recorded at paragraph 16 of the judgment and order impugned dated December 23, 2020. Five principal grounds appear to have been canvassed. The respondent claimed that the principal claim of the contractor was barred by limitation; that the tribunal adopted varying yardsticks for examining the claim and the counter-claim; that the tribunal ignored vital evidence particularly as apparent from the minutes of a meeting held between the parties on April 19, 2018; that the arbitral tribunal virtually extended the time qua liquidated damages and rejected the claim on such account by finding that the contractor was entitled to more time to complete the work than what the contract indicated; and, that material evidence pertaining to the debit note qua customs duty was ignored.
6. Certain facts are not in dispute and the relevant dates in such regard must be taken from the submission made on behalf of the respondent herein. According to the respondent, the last bill that was raised by the appellant in connection with the work was on December 31, 2014. The two debit notes that the re
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