IN THE HIGH COURT OF JUDICATURE AT MADRAS
SANJIB BANERJEE, P.D. AUDIKESAVALU, JJ
M/s. Anand Citi Centre Holdings Private Limited, Mylapore, Chennai - Appellant
Versus
M/s. Consolidated Construction Consortium Limited, Chennai - Respondent
O.S.A. No. 143 of 2021
Decided on : 20-09-2021
Arbitration and Conciliation Act, 1996 - Section 37 - Commercial Courts Act, 2015 - Section 13 - Construction work - Inordinate delay - Arbitration Clause - Liquidated damages - Arbitral award - Principal plank of attack is the perceived failure on part of arbitrator to look into documents filed by appellant herein in support of appellant’s claim for damages on account of breach committed by respondent contractor in completing the construction work and inordinate delay on part of contractor - Appellant complains that the key documents are not referred to in arbitral award and arbitration court did not consider such aspect to be a serious ground of challenge - Whether there was any delay occasioned as a result of any breach or failure on part of contractor - Held, Arbitration court would be minded to accept a challenge to an award when very basis of a claim is found to be undone by a document which is not referred to in award. Similarly, if a particular head of claim appears to be virtually admitted by other side and the relevant document is not noticed by the arbitrator while dismissing such head of claim, arbitration court may set aside finding on such score by referring to document that was already before arbitral tribunal - There does not appear to be any basis to appellant’s grievance that arbitration court did not take relevant considerations into account in assessing impugned award - O.S.A. dismissed.
JUDGMENT :
Sanjib Banerjee, J.
(Prayer: Appeal filed under Section 13 of the Commercial Courts Act, 2015 read with Section 37 of the Arbitration and Conciliation Act, 1996 against the order dated 27.08.2019 passed in O.P.No.1051 of 2017.)
1. A spirited challenge is made to the order impugned by which a petition questioning the propriety of an arbitral award has been, by and large, repelled.
2. The principal plank of attack is the perceived failure on the part of the arbitrator to look into the documents filed by the appellant herein in support of the appellant’s claim for damages on account of breach committed by the respondent contractor in completing the construction work and the inordinate delay on the part of the contractor. The appellant complains that the key documents are not referred to in the arbitral award dated September 27, 2017 and the arbitration court did not consider such aspect to be a serious ground of challenge.
3. According to the appellant, the building was to be constructed for the purpose of its use as a hotel and commercial complex. The appellant says that the contractor was aware of the nature of the project and of the contracts entered into by the appellant with third parties promising to make over possession of the constructed areas to such third parties within agreed timelines. The appellant complains that despite the contractor being aware of the damages that the appellant was exposed to qua third parties, the contractor did not take diligent steps to complete the project in accordance with the specifications or hand over the completed project within time. The appellant says that it is for such purpose that the contract provided for liquidated damages, but the arbitrator willy-nilly disregarded the same.
4. As to the various documents that were exhibited in course of the arbitral reference and not dealt with or referred to by the arbitrator in the impugned award, the appellant complains that the arbitration court has recorded that the arbitration court has looked into some of the documents and found that the award would not have been altered even if such documents had been looked into. According to the appellant, the test applied by the arbitration court in such regard is flawed and the arbitration court ought to have set aside the award on the ground that it failed to take relevant considerations into account and was, accordingly, manifestly arbitrary and patently erroneous.
5. It is elementary that the arbitrator is the final judge of the quality and quantity of the evidence. There is no rule that every document that is carried to an arbitral reference must be expressly referred to in the award. It is evident from the award that the arbitrator duly applied his mind to the matters in issue and referred to both the documents and the oral evidence before him in reaching the conclusions. Ordinarily, in exercise of the limited authority available under Section 34 of the Arbitration and Conciliation Act, 1996, the court cannot look into the basis of reasoning or even the law that may have been applied by the arbitrator in considering the matters in issue. It is only when the award appears to be completely flawed in the sense that it shocks the conscience of the court or when the methodology adopted for assessment is found to be opposed to public policy and egregiously unjust or unfair that an arbitration court would be excited to delve any deeper into the award or annul the same.
6. The arbitrator in this case framed appropriate issues. The first of the issues pertained to whether there was any delay occasioned as a result of any breach or failure on the part of the contractor. Upon referring in detail to how the project was worked out, setting out some of the answers to the questions posed to the witnesses and alluding to several of the documents that had been carried to the reference, the arbitrator concluded that there was breach on the part of the appellant herein, inter alia, in not producing the drawings
The main legal point established in the judgment is that the claim was not time-barred as per the agreement and the Limitation Act, and time was not the essence of the contract due to delays caused b....
Arbitration Award - An Award however can be interfered with if it is found to be vulnerable under any of the grounds in Section 34 including being in contravention with the fundamental policy of Indi....
The main legal point established in the judgment is that the Arbitral Tribunal's award must be in line with the Contract Agreement and applicable legal principles, as evidenced by the judgments cited....
The scope of interference under Section 34 of the Arbitration and Conciliation Act, 1996, is extremely limited and is confined to cases where an award is in conflict with the public policy of India, ....
Legal injury must be established for claiming liquidated damages, and the appellant's delays justified the imposition of such damages.
Login now and unlock free premium legal research
Login to SupremeToday AI and access free legal analysis, AI highlights, and smart tools.
Login
now!
India’s Legal research and Law Firm App, Download now!
Copyright © 2023 Vikas Info Solution Pvt Ltd. All Rights Reserved.