Case Note & Summary
The appellant, Anmol Steel Processors Private Limited (claimant), filed a Commercial Appeal under Section 37 of the Arbitration and Conciliation Act, 1996 against the judgment of the learned Single Judge dismissing its petition under Section 34 of the Act. The petition challenged an arbitral award dated 9th June 2018 passed by the learned arbitrator. The claimant had supplied steel material to the respondent, Colour Roof (India) Limited, pursuant to purchase orders. The claimant alleged that the respondent owed approximately Rs. 25 crores, but the respondent admitted liability only to the extent of Rs. 15 lakhs via email dated 20th July 2011 and later Rs. 1.5 lakhs via email dated 5th January 2012. The respondent made payments totaling Rs. 3,74,30,757/- in installments, which the claimant appropriated against old outstanding invoices on a FIFO basis. The arbitrator rejected the claimant's claim for the balance amount, holding that the claimant failed to prove the outstanding dues beyond the admitted liability. The learned Single Judge upheld the award, finding no ground for interference under Section 34. The Division Bench, after hearing the parties, dismissed the appeal, holding that the scope of appeal under Section 37 is limited and the arbitrator's findings were not perverse. The court noted that the claimant did not produce sufficient evidence to establish the claim and that the unilateral appropriation of payments on FIFO basis was not binding on the respondent.
Headnote
A) Arbitration - Appeal under Section 37 - Scope - The appeal under Section 37 of the Arbitration and Conciliation Act, 1996 is against the judgment dismissing the petition under Section 34 of the Act. The court's interference is limited to grounds under Section 34 and does not permit re-appreciation of evidence. (Paras 1-2)
B) Arbitration - Arbitral Award - Claim for Outstanding Dues - The claimant failed to prove that the respondent owed more than the admitted liability of Rs. 15 lakhs. The arbitrator's finding that the claimant did not produce sufficient evidence to establish the claim was not perverse. (Paras 3-5)
C) Arbitration - Appropriation of Payments - FIFO Basis - The claimant's unilateral appropriation of payments on FIFO basis was not binding on the respondent in the absence of agreement. The arbitrator's rejection of such appropriation was justified. (Para 4)
Issue of Consideration
Whether the learned Single Judge erred in dismissing the petition under Section 34 of the Arbitration and Conciliation Act, 1996 challenging the arbitral award which rejected the claimant's claim for outstanding dues beyond the admitted liability of Rs. 15 lakhs.
Final Decision
The appeal is dismissed. The judgment of the learned Single Judge dated 5th September 2019 dismissing Commercial Arbitration Petition No. 987 of 2018 is upheld.
Law Points
- Section 37 of the Arbitration and Conciliation Act
- 1996
- Scope of appeal under Section 37
- Limited interference with arbitral award
- Burden of proof on claimant
- Appropriation of payments
- FIFO basis
Case Details
2022 LawText (BOM) (01) 55
Commercial Appeal No. 574 of 2019 in Commercial Arbitration Petition No. 987 of 2018
R. D. Dhanuka, R. N. Laddha
Mr. J. P. Sen, Senior Advocate a/w Mr. Kezer Kharawala and Mr. Pradosh Patil i/by M/s. Lex Juris for the Appellant; Mr. Chetan Kapadia a/w Mr. Rohan Agrawal, Ms. Sakina Ruhawala i/by M/s. Consulta Juris for the Respondent
Anmol Steel Processors Private Limited (Formerly known as Anmol Steel & Infra Pvt. Limited)
Colour Roof (India) Limited
Subscribe to unlock Case Details (Citation, Judge, Date & more)
Subscribe Now
Nature of Litigation
Commercial appeal under Section 37 of the Arbitration and Conciliation Act, 1996 against dismissal of petition under Section 34 challenging arbitral award.
Remedy Sought
The appellant sought to set aside the judgment of the learned Single Judge dismissing its petition under Section 34 and to set aside the arbitral award.
Filing Reason
The appellant claimed that the respondent owed approximately Rs. 25 crores for supply of steel material, but the arbitrator rejected the claim beyond the admitted liability of Rs. 15 lakhs.
Previous Decisions
The learned Single Judge dismissed the Commercial Arbitration Petition No. 987 of 2018 on 5th September 2019, upholding the arbitral award dated 9th June 2018.
Issues
Whether the learned Single Judge erred in dismissing the petition under Section 34 of the Arbitration and Conciliation Act, 1996?
Whether the arbitral award was perverse or contrary to law?
Submissions/Arguments
The appellant argued that the respondent admitted liability of Rs. 15 lakhs and later Rs. 1.5 lakhs, but the total outstanding was much higher.
The respondent contended that the claimant failed to prove the claim beyond the admitted amount and that the appropriation of payments on FIFO basis was unilateral.
Ratio Decidendi
The scope of appeal under Section 37 of the Arbitration and Conciliation Act, 1996 is limited to grounds under Section 34. The arbitrator's findings of fact, based on evidence, cannot be interfered with unless perverse. The claimant failed to prove the outstanding dues beyond the admitted liability.
Judgment Excerpts
The appellant has filed this Appeal under Section 37 of the Arbitration and Conciliation Act, 1996 impugning the judgment dated 5th September, 2019 passed by the learned Single Judge, dismissing the Commercial Arbitration Petition No. 987 of 2018 impugning the Arbitral Award dated 9th June, 2018 passed by the learned arbitrator.
It is the case of the claimant that on 30th October, 2020 offer was sent to the respondent for supply of steel material by the claimant.
It is the case of the claimant that vide an email dated 5th January, 2012, the respondent acknowledged the debt and admitted the liability to the extent of Rs.1.5 lakhs allegedly due and payable to the claimant.
Procedural History
The claimant filed a statement of claim before the learned arbitrator. The arbitrator passed an award on 9th June 2018 rejecting the claim beyond the admitted liability. The claimant filed Commercial Arbitration Petition No. 987 of 2018 under Section 34 of the Act, which was dismissed by the learned Single Judge on 5th September 2019. The claimant then filed the present Commercial Appeal No. 574 of 2019 under Section 37 of the Act.
Acts & Sections
- Arbitration and Conciliation Act, 1996: 37, 34
