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CASE NO.:

Appeal (civil) 1280 of 2007

PETITIONER:

BOC India Ltd

RESPONDENT:

Bhagwati Oxygen Ltd

DATE OF JUDGMENT: 12/03/2007

BENCH:

Dr.AR.Lakshmanan & Tarun Chatterjee

JUDGMENT:

J U D G M E N T

(Arising out of S.L.P. [C] No. 13662/2005 )

TARUN CHATTERJEE,J.

Leave granted.

This is an appeal from a judgment of a Division

Bench of the Calcutta High Court dismissing an appeal

which was filed against the judgment of a learned Judge

refusing to accept the objection filed by the appellant

under Section 30 read with Section 33 of the Arbitration

Act, 1940 (hereinafter referred to as the "Act").

The brief facts of this appeal are as follow:

BOC Ltd. being the appellant herein and one

Nippon Sansa K.K. (NSKK) entered into an agreement in

order to facilitate the respondent to import components

for setting up a 25 tons per day Oxygen plant at

Ghatsila, Bihar (now in the State of Jharkhand). In the

month of April/May 1990 the appellant and the

respondent entered into a contract for erection,

installation and commission of the aforesaid plant at

Ghatsila, Jharkhand. On 5th June 1990 a tripartite

meeting between the representatives of the appellant

and the respondent and NSKK were held where the

letter of intent was signed and purchase orders were

issued by the respondent in favour of the appellant. The

respondent awarded a turnkey contract on 6th June,

1990 to the appellant for manufacture, supply, erection

and commission of the said plant. Vide letter dated 18th

December 1990, the respondent had agreed to pay

interest on margin money and reimburse the same to

the appellant. The appellant thereafter on 31st March

1992 raised final invoices and subsequently on 13th

April 1992 the respondent raised claims and sought

refund from the appellant. By a letter dated 9th March

1993 the appellant informed the respondent indicating

therein the interest payable by them to the respondent.

Finally, when the prior invoice and letter were not

responded to, on 13th September 1993 the respondent

again raised claims and sought refund from the

appellant. When the refund was not made by the

appellant, the respondent made an application under

Sections 8 and 33 of the Act for the appointment of an

arbitrator on 24th November 1995 in the High Court at

Calcutta.

In the meantime, on 21st September 1995 the High

Court directed the appellant to release the spares to the

respondent on payment of Rs. 10,19,000/- by them. A

lawyer was thereafter appointed as Arbitrator by

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consent of the parties and the said arbitrator

subsequently was replaced on 12th February, 1996 by

Late Arbitrator Shri P.K. Roy. On 29th July 2000, Late

Shri Roy had passed his award in favour of the

respondent for a sum of Rs. 24,92,165/- with an

interest of 12 per cent on the amount. However, the

counter claim of the appellant was rejected.

On 30th October, 2000, the appellant filed an

application for setting aside the award passed by the

arbitrator under Section 30 of the Act before the High

Court at Calcutta. In the said application, the appellant

raised objection to the effect that the award in question

suffered errors apparent on the face of it. It was alleged

that the arbitrator erred in awarding the claim of the

respondent for a sum of Rs. 17,95,710/- relating to

claim no. 9 although the learned arbitrator held issue

no. 4 in favour of the appellant. It was also alleged that

since the appellant had not realised any sum in excess

of Rs. 50 lacs against indigenous supply, the award of

the learned arbitrator to the effect that the respondent

was entitled to receive back from the appellant, the said

sum of Rs. 17,95,710/-, was not only erroneous on the

face of the award but also contradictory and

inconsistent with the findings of the arbitrator against

issue no. 4. It was further alleged by t