The limited scope of appellate review under the Arbitration Act prohibits courts from reassessing arbitral findings unless demonstrable procedural or jurisdictional errors are shown.

JUDGMENT :

Sanjeeb K. Panigrahi, J.

1. This Appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “A&C Act”) has been filed against the judgment dated 15.12.2012 passed by the learned District Judge, Khurda at Bhubaneswar in Arbitration Proceeding No.148 of 2011 wherein the learned District Judge has dismissed the petition filed under Section 34 of the A&C Act there by confirming the award dated 30.4.2011 passed by the learned Sole Arbitrator Justice B.A.Khan.

I. FACTUAL MATRIX OF THE CASE:

2. The factual matrix traces its origin to the tender process initiated by the appellant, National Aluminium Company Ltd. (NALCO), which on 2.6.2009 floated tenders for supply of burnt quick lime for its Damanjodi plant in Koraput district. The respondent, J.P. Mishra & Company, participated in the process and emerged as one of the successful bidders, along with four other suppliers. A formal purchase order was issued on 9.10.2009, stipulating, inter alia, that the lime supplied must conform to specifiedCaO content standards and that sampling and analysis would be conducted at the destination point, i.e., the NALCO laboratory at Damanjodi, whose results would be final and binding.

3. Pursuant to the contract, the respondent supplied material through three railway rakes. The rakes reached the site on 26.6.2010, and unloading was completed by 27.6.2010. There was no dispute in respect of the first two rakes; however, the third rake containing 2733.774 MT of lime soon became the focal point of controversy. The purchase order mandated that acceptance of material be based solely on NALCO’s laboratory analysis. According to NALCO, the third rake’s CaO content fell below the minimum acceptable limit of 60%, resulting in rejection and forfeiture of the consignment in accordance with Clause 8 of the purchase order. Intimation of such rejection was communicated to the respondent through letters referred to in the appeal papers.

4. The respondent protested immediately upon receiving the rejection communication and, by letters dated 29.6.2010 and 30.06.2010, sought a second sampling of the material. Although the contract did not expressly provide for re-sampling, further correspondence ensued between the parties, culminating in a second sampling exercise conducted on 28.7.2010 at Damanjodi. The respondent alleges that both the original and subsequent samplings were undertaken without proper notice and in its absence, thereby violating principles of natural justice. NALCO, on the other hand, maintains that notice was not contractually required, and even otherwise, the respondent’s representative had been present at the plant premises during the unloading and sampling process, an assertion said to be supported by the respondent’s own pleadings.

5. Dissatisfied with the rejection and asserting financial loss, the respondent invoked the arbitration clause on 19.10.2010. The dispute was referred to a sole arbitrator Justice B.A. Khan (Retd.) who entered reference and heard the parties. The respondent raised a monetary claim of Rs. 1,49,93,961, premised on the assertion that the material had been improperly rejected. NALCO defended the rejection on the ground that the laboratory tests were conducted strictly in accordance with contractual provisions, supported by standard sampling methodologies. Evidence of NALCO officials who conducted the tests was placed before the arbitrator. These competing narratives formed the basis upon which the arbitral tribunal undertook its assessment.

6. The learned arbitrator delivered the award on 30.04.2011, substantially allowing the respondent’s claim and granting Rs.1,19,66,698 in its favour. The award held, inter alia, that sampling and testing had not been done in accordance with the contract and that the respondent had been denied an opportunity to be present during the critical testing process. The arbitrator found procedural deficiencies serious enough to vitiate the rejection and f