AVNEESH JHINGAN, J. (ORAL)

1. This petition is filed under Section 34 of the Arbitration and Conciliation Act, 1996 (for short „the Act‟) for setting aside of the arbitral award dated 01.10.2022.

2. The brief facts are that the respondent/Indian Oil Corporation Ltd. (hereinafter referred to as „IOCL‟) vide tender dated 15.01.2018 invited bids for supply of 26,000 MT of Acetic Acid (for brevity „the acid‟). The petitioner was the successful bidder and a purchase order (for short „PO‟) dated 25.05.2018 was issued for supply of 13,000 MT at the rate of Rs. 50,500/- per MT. The supply was to be made over a period of one year from the date of first supply or till completion of the total ordered quantity, whichever was earlier. The PO stipulated delivery to be on a staggered basis as per the schedule to be issued by IOCL and the required quantity of the material was to be supplied within four to seven days of the intimation. The petitioner made the first supply on 04.06.2018 and the contract was to expire on 03.06.2019. Till 02.02.2019, the petitioner supplied 6504.42 MT of acid in compliance with the schedules issued by IOCL. The plant of IOCL was shut down in February, 2019 due to technical reasons and resumed operations on 28.07.2019. IOCL on 03.04.2019 extended the tenure of the contract up to 31.08.2019. The petitioner was intimated on 17.06.2019 that the plant was under shut down and acid storage was full.

2.1 By email dated 05.08.2019 the petitioner sought extension of the PO by six months or till completion of the supply of balance quantity whichever was earlier. IOCL vide letter dated 05.08.2019 asked the petitioner to maintain the supply against the PO at the rate of 70 MT of acid per day for a further period of one week. On 20.08.2019 the petitioner was informed that no further supply of acid was envisaged. The terms and conditions agreed between the parties provided for dispute resolution through arbitration and the proceedings were invoked by the petitioner.

2.2 The petitioner raised the following claims:

(i) declaration that IOCL breached the contract. Damages of Rs.8,58,27,060/- for breach of contract were sought. Damages were quantified by taking the difference between the contract price and the actual price at which the balance quantity of acid was sold;

(ii) a sum of Rs. 3,71,91,726/- was claimed on account of expenses incurred for storing 5201.64 MT of acid; and

(iii) a sum of Rs. 4,87,119/- towards compensation for expenses incurred for furnishing of performance bank guarantee (for short „PBG‟) and keeping it alive till it was returned.

2.3 The first issue was decided in favour of the petitioner and IOCL was held to be in breach of the contract. With regard to the claim for damages for non-supply of the balance quantity of acid the arbitrator awarded a sum of Rs. 25,000/- as nominal damages along with interest at the rate of 9% per annum from the date of the award till realisation. The claims for storage charges and expenses incurred towards furnishing the PBG were rejected. Litigation costs of Rs.12,00,000/- were awarded. Hence, the present petition.

3. Learned counsel for the petitioner contends that the impugned award is perverse and suffers from patent illegality. It is argued that relevant evidence including the deposition of CW-1 wherein it was stated that the petitioner was ready and willing to supply the balance quantity and that sufficient stock was available with the petitioner from time to time was ignored. Submission is that no reasons have been recorded by the arbitrator for awarding damages of Rs. 25,000/- which is grossly inadequate.

3.1 Reliance is placed upon the decision of Supreme Court in Associate Builders v. Delhi Development Authority, (2015) 3 SCC 49 to contend that non-consideration of relevant evidence vitiates the award of patent illegality. The decisions of the Supreme Court in Oil and Natural Gas Corporation Ltd. v. Western Geco International Ltd., (2014)