Case Note & Summary
The appeal was directed against a judgment of the Delhi High Court concerning an arbitration award related to a contract for the supply of oil. The appellant, Markfed Vanaspati & Allied Industries, had offered to supply various categories of oil to the Union of India but failed to meet the delivery schedule, leading to the cancellation of the contract and reliance on a force majeure clause. The dispute was referred to arbitration, resulting in a non-speaking award that was later made rule of the court. The appellant's appeal to the Division Bench of the High Court was dismissed, prompting the current appeal. The Supreme Court examined the applicability of the force majeure clause, noting that the government ban only restricted the use of rapeseed oil for manufacturing Vanaspati, not its production. The court found the appellant's argument lacking merit. Furthermore, the court addressed the limited scope of interference in non-speaking awards, affirming that it could not delve into the arbitrator's reasoning. The court upheld the findings of the High Court and dismissed the appeal, directing the parties to bear their own costs.
Headnote
A) Arbitration - Force Majeure - Applicability of Clause - Arbitration and Conciliation Act, 1996 - The appellant claimed the benefit of the force majeure clause due to a government ban on rapeseed oil for manufacturing Vanaspati. The court held that the ban did not restrict the manufacture of rapeseed oil, rendering the force majeure claim meritless. (Paras 5-8) B) Arbitration - Non-speaking Award - Scope of Interference - Arbitration and Conciliation Act, 1996 - The court reiterated that interference in a non-speaking award is limited, and it cannot probe the arbitrator's reasoning. The court emphasized the need to support the award unless invalidated by misconduct. (Paras 9-15)
Issue of Consideration
Whether the force majeure clause was applicable and the scope of interference in a non-speaking arbitration award.
Final Decision
The Supreme Court dismissed the appeal, affirming the High Court's judgment and the arbitrator's non-speaking award, directing the parties to bear their own costs.
Law Points
- Arbitration
- Non-speaking award
- Force majeure
- Scope of interference
- Liquidated damages
