The court upheld the arbitral award, emphasizing limited grounds for interference under Section 34, and affirmed the validity of the Arbitrator's appointment despite the appellant's claims of jurisdictional issues.

JUDGMENT

G.S. Sandhawalia, J.

Challenge in the present appeal by one of the partners of M/s A.A. Associates-respondent No.2 herein is to the order dated 13.10.2023 passed by the Commercial Court, Gurugram wherein the award passed on 27.04.2017 (Annexure A-1) in favour of respondent No.1-claimant has been upheld while dismissing the petition filed under Section 34 of the Arbitration & Conciliation Act, 1996 (for short, the 'Act').

2. The Arbitrator had awarded a sum of Rs. 1,95,25,885/- against the initial claim of Rs. 4,91,61,916.03. The contractual rate of interest was 16.5% per annum from 01.03.2015 was also allowed. The claimant was also held entitled to encash and appropriate the fixed deposit of the amount of Rs. 2,75,00,000/- which was received pursuant to the sale of the equipment along with interest which had accrued thereon apart from the amount of Rs. 5,55,000/- towards cost of arbitration which were never paid by the appellant or the partnership concern. Additional cost of Rs. 30,000/- was also imposed upon the appellant during the proceedings which were also granted in favour of respondent No.1 while pronouncing the award. The reasoning given by the Commercial Court to uphold the award was that the Court had limited supervisory jurisdiction to interfere with the award of the Arbitral Tribunal which it had found to be a plausible one and there was no material irregularity or illegality or perversity in the award which could shock the conscious of the Court to interfere in the same.

3. The argument that 3 machines had not been supplied by the respondent-claimant and that there was misreading of the documents was rejected by noticing that the appellant and the partnership concern was required to pay a sum of Rs. 66,45,000/- as down-payment out of the total consideration but only a part-payment had been made. Therefore if the 2 machines had not been supplied but the main CT Machine was supplied and therefore, having not paid the full advance amount, the said defence was not tenable while referring to various clauses of the Hypothecation and Deferred Payment Agreement dated 27.09.2012 (Annexure A-3). It was noticed that failure to make payment entitled the claimant to take possession of the hypothecated equipments and stop the support and maintenance service/equipment and therefore, the conditions were applicable if the claimant had defaulted in making the payment. It was also noticed that there was default in making the deferred payments and therefore, the claimant-company was within its right not to provide services in the absence of the full margin money and there was no such liability of the claimant to supply the other 2 machines. The factum of the appellant residing abroad and having terminated the partnership with M/s A.A. Associates was kept in mind that he had only joined the proceedings before the Arbitrator and filed his statement of defence and also contested the proceedings and therefore could not now hold out that any prejudice had been caused to him.

4. The dismissal of the counter-claim by the Arbitrator and the fact that the Arbitrator had been appointed at the behest of the claimants was also rejected by noticing that the other persons had not come forward to examine themselves as witnesses and only the appellant/partner had challenged the impugned award which had held the claimants to claim the amount jointly and severally from M/s A.A. Associates and others. The judgment in Perkins Eastman Architects DPC & another v. HSCC (India) Ltd., 2020 AIR (SC) 59 was distinguished on the ground that it was delivered on 26.11.2019 after the award of the Arbitrator on 27.04.2017 and no objection had ever been raised regarding the appointment of the Arbitrator and only time had been sought for payment. The objection had not been raised by the partnership firm and the judgment relied upon was thus distinguished.

5. It is not disputed that the purchase order dated 22.09.2012 had been given to the claimant-company for