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2012 Supreme(Online)(Chh) 83

IN THE HIGH COURT OF CHHATTISGARH AT BILASPUR
Not Mentioned, Not Mentioned
M/s Satjas Glorocks Private Ltd. – Appellant
Versus
Bharat Aluminum Company Limited – Respondent
Civil Suit (Arbitration Case) No.31A / 2007



Advocates:
For the Appellants/Petitioners: Shri Rahul Jha
For the Respondents: Shri Ratnanko Banerjee, Shri Tarun Aich, Shri Abhishek Sinha

The court upheld the limited scope of intervention in arbitration awards, emphasizing that arbitrators must adequately address counter-claims and provide reasons for decisions to avoid judicial misconduct.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 34 - Appeal against order setting aside arbitrator's award - Dispute between parties regarding supply and transport of Bauxite - Breaches of agreement by appellant including quality and timely supply - Award by Sole Arbitrator upheld in part - Learned District Judge's order stating that counter-claim was not properly considered - Court emphasizes limited scope of interference in arbitration awards as per precedents. (Paras 1, 4, 25)

(B) Arbitrator's failure to provide reasons - Importance of addressing counter-claims highlighted - Validity of the impugned order discussed in light of judicial precedents on arbitration standards. (Paras 21, 24)

Table of Content
1. introduction to appeal's background and disputes. (Para 1 , 2 , 4)
2. appellant's argument regarding the validity of the arbitrator's award. (Para 5 , 7)
3. court's analysis of the award’s compliance with legal standards. (Para 8 , 10 , 12 , 16)
4. key findings on counter-claims and reasoning standards in arbitration. (Para 21 , 24)
5. conclusion on the appeal's dismissal. (Para 25)

1.The instant appeal is directed against order dated 19-11-2009 passed by the District Judge, Korba in Civil Suit (Arbitration Case) No.31A / 2007, whereby the application preferred by respondent Bharat Aluminum Company Limited under S.34 of the Arbitration and Conciliation Act, 1996 (henceforth `the Act, 1996') has been allowed and award dated 25-7-2007 passed by the Sole Arbitrator has been set aside.

2.Facts of the case, as projected in it, in brief, are that appellant M/s Satjas Glorocks Private Ltd. is engaged in business of mining, transportation and logistics solutions. Respondent Bharat Aluminum Company Limited is a well - known aluminum maker. The respondent extracts Bauxite from its captive mines at Mainpat in Surguja District (Chhattisgarh). The ore, thus mined, is then transported by road to its alumina plant in Korba District (Chhattisgarh). This mining and transportation of ore is done through contractors. The appellant, vide letter dated 2-2-2002, approached the respondent to offer its services in this behalf. A profile of the appellant detailing its assets, professional team and experience was attached with this introductory letter. After preliminary discussion with the respondent's representatives on 7-2-2002, the appellant, vide letter dated 10-2-2002, offered to mine and transport Bauxite from Mainpat to Korba plant for Rs.585/- P.M.T. The offer was accepted by the respondent vide letter dated 22-2-2002. A formal agreement was executed between the parties on 6-3-2002. Work, under the contract, commenced from 8-3-2002. The respondent suggested norms under title, "Good Mining Practices" vide letter dated 6-3-2002. After the agreement, the appellant failed to achieve monthly target of supply of Bauxite and thereby, it breached terms and conditions of the contract. Quality of the Bauxite mined by the appellant was poor and, therefore, the respondent deducted some penalty in terms of Clause 12.2 of the agreement. The appellant also failed to make payments regarding labour - charges, provident - fund, pension - deposits, workers' wages / remuneration and Panchayat - Tax, which, it required to do in terms of the agreement. Appellant M/s Satjas Glorocks Private Ltd. asked for revision of rates, which were fixed under the agreement. The rates were revised in terms of the agreement due to escalation in wages of semi - skilled workers and also due to variation in price of diesel. The respondent, during execution of the agreement, introduced bonus and incentive schemes for benefit of the appellant. The appellant failed to execute the contract within its stipulated period, i.e., 36 months. The appellant failed to supply quality Bauxite, as agreed. The appellant failed to execute the contract in proper manner and it also failed to achieve the monthly target of supply of Bauxite, as agreed. The appellant abandoned the work after 4-1-2004. In view of the aforesaid breaches committed by the appellant, the respondent suffered loss and damages. Disputes and differences, claims and counter - claims arose between the parties out of the contract. Subsequently, vide order dated 9-1-2006, passed in M.C.C.No72/2004 (M/s Satjas Glorocks Private Ltd. v. Bharat Aluminum Company Limited), learned Shri Justice P.N.S.Chouhan (retired) was appointed as Sole Arbitrator by this Court. Learned Sole Arbitrator entered into the reference and passed the award dated 25-7-2007. Being aggrieved, the respondent impugned the said award by filing an application under S.34 of the Act, 1996 before the learned District Judge.

3. The appellant, opposing the case





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