IMPORTANT POINT
Challenge to arbitral award – Interference under Section 37 of Arbitration and Conciliation Act, 1996 cannot travel beyond restrictions laid down under Section 34 of Arbitration and Conciliation Act, 1996.

JUDGMENT

Mohan M. Shantanagoudar, J.

This civil appeal arises out of the judgment and final order dated 09.02.2009 passed by a Division Bench of the High Court of Judicature at Bombay in Appeal No. 949 of 2002, affirming the judgment and order dated 05.08.2002 of the Learned Single Judge whereby the Appellant's Objections Petition challenging the Majority Award dated 27.06.2001 had been disallowed. Vide the Majority Award, the Appellant had been directed to pay certain amounts to the Respondent under their agreement dated 14.12.1993.

2. The brief facts leading to the instant appeal are as follows: M/s Sterlite Industries (India) Ltd., (renamed M/s Vedanta Ltd., the Respondent herein) was a manufacturer of continuous Cast Copper Rods. Vide the agreement dated 14.12.1993, MMTC Ltd. (the Appellant herein), a government company, was appointed as a consignment agent from whom the Respondent could avail services such as storage, handling and marketing of the copper rods produced by the Respondent. Such rods were to be stored at various godowns of the Appellant. The agreement dated 14.12.1993 contained an arbitration clause.

3. Importantly, under the aforementioned agreement, the Appellant raised its own invoices in the name of the customers of the products sold and delivered. Goods were to be sold only against payment of 100% advance by the customer to the Appellant, who then had to remit the same to the Respondent after deducting service charges (i.e. commission) at the rate of Rs. 500/- per metric tonne.

4. The aforementioned agreement was materially altered for the first time on 06.01.1994, in terms of a Memorandum of Understanding between the parties. This amendment enabled the Appellant to supply goods to customers against a letter of credit (usance or stand-by), i.e. without advance payment, while maintaining that it was the "total responsibility" of the Appellant to ensure the bona fides of the letter of credit furnished and that the principal and interest were paid on the due date for the supplies made against the letter of credit. In case of a stand-by letter of credit, it was further specified that it was the Appellant's responsibility, in the event of non-payment by the due date, to negotiate the stand-by letter of credit in a timely way and credit the sale proceeds to the Respondent. Interest was fixed at 18.25% per annum.

5. A further revision to the above terms was undertaken vide a meeting between the parties on 20.01.1994, the minutes of which indicate that the Appellant could thereafter extend credit to customers on its own terms and responsibility, and in case of credit being extended, payment to the Respondent was to be effected by the Appellant upon delivery of the copper rods to the customer.

6. The dispute in the instant matter pertains to supplies of the Respondent's copper rods made by the Appellant to Hindustan Transmission Products Ltd. (in short, "HTPL") after April 1995. Payment for the same were not made by HTPL to the Appellant, who also subsequently failed to make payment for the supplied goods to the Respondent. Hence, the Respondent invoked the arbitration clause under the agreement dated 14.12.1993 and the dispute was referred to a three-member arbitral tribunal.

7. The majority of the arbitral tribunal found in favour the Respondent, and vide its award dated 27.06.2001, inter alia directed the Appellant to pay to the Respondent a sum of Rs. 15,73,77,296/- with interest at the rate of 14% p.a. from 05.02.1997 till the date of the award and at the rate of 18% p.a. thereafter, as well as an amount of Rs. 2.25 crores as interest on overdue payment up to 05.02.1996. The said award was confirmed by the learned Single Judge of the High Court of Bombay as well as the Division Bench thereof.

8. There were several grounds of challenge raised by the Appellant before the learned Single Judge of the High Court; however, before the Division Bench as well as before this Court the main ground raised concerns the arbitrabi