A party seeking to set aside an arbitral award must demonstrate proven loss related to the breach, which was not established in this case.

J U D G M E N T

~~~~~~~~~~~ P.S.Gopinathan, J.

In this appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act'), the appellant assails the order of the District Judge, Thiruvananthapuram, dismissing O.P.(Arb) No.136/2008, a petition under Section 34 of the Act. By the impugned order, the request of the appellant to set aside a part the arbitral award by the sole Arbitrator was declined.

2. The brief facts leading to the dispute are that the appellant and the respondent both public sector companies, entered into an agreement for supply of cables. The 1st respondent, who was bound to supply the cables, had furnished bank guarantee. Alleging that the 1st respondent failed to supply in response to the additional order placed by the appellant, bank guarantee was invoked and a sum of Rs. 13,32,588/- was withheld by the appellant following which the dispute arose. It was duly referred to the Arbitrator.

3. Before the Arbitrator, no oral evidence was adduced from either side. Documents alone were relied on by the parties. The Arbitrator, on analysis of the documents produced, arrived at a finding of fact that the appellant sustained no loss following the alleged failure to supply additional quantity of cables so as to withhold the above amount. Consequently, the Arbitrator ordered to return that amount.

4. The court below, analysing the materials on record, arrived at a conclusion that none of the ingredients coming under Section 34 (2) to set aside the award was established by the appellant. Having heard the learned counsel for the appellant and perusing the appeal memorandum and the order impugned, we find that none of the grounds urged in the appeal memorandum would come within any of the grounds available to the appellant to set aside the award under of the Act. The admitted facts would show that order for supply of 50%alone was given to the respondent. It was duly supplied. Order for the supply of remaining 50% was given to L-2 and L-3 bidders. But they didn't supply. When L2- and L3 bidders failed, additional order was given to the respondent which they didn't honour. The finding of the Arbitrator is that though there is failure on the side of the respondent to honour the additional order, no material was placed before the Arbitrator to conclude that the appellant had to purchase cables for higher value to meet the requirement and thus the appellant sustained any loss so as to recover from the 1st respondent. Such being the facts and circumstances, the award of the Arbitrator to return the withheld amount is no way vitiated to be interfered by the court below or by this Court. Therefore, we find no merit in this appeal. Appeal is devoid of merits. Accordingly, it is dismissed with no order as to costs.

(K.HEMA, JUDGE)

(P.S.GOPINATHAN, JUDGE)

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