Case Note & Summary
The appellant, M/s. Pratibha Industries Limited, filed a commercial appeal under Section 13(1A) of the Commercial Courts Act, 2015, read with Section 37(1)(c) of the Arbitration and Conciliation Act, 1996, challenging the judgment dated 12.02.2025 passed by the LXXXVII Additional City Civil and Sessions Judge, Bengaluru (Commercial Court) in Com.A.P No.118/2024. That petition had been filed by the appellant to set aside an arbitral award dated 02.05.2024 rendered by a sole arbitrator (a former judge of the High Court). The principal controversy before the Arbitral Tribunal was the appellant's claim for 2% of the total contract value under a Memorandum of Understanding (MOU) dated 06.06.2017 entered into between the appellant and the respondent, M/s. Amrutha Constructions Private Limited. The appellant claimed entitlement to this amount despite not having executed any work for the performance of the contract awarded to the joint venture of the parties. The Arbitral Tribunal rejected the claim, and the Commercial Court dismissed the appeal under Section 37 of the A&C Act, upholding the award. In the present appeal, the High Court considered the limited scope of interference under Section 37 and found no patent illegality or perversity in the arbitral award. The court noted that the appellant had not performed any work under the contract, and the claim for 2% of the contract value was not justified. The appeal was dismissed, and the impugned judgment and award were upheld. The court also condoned the delay in filing the appeal as per I.A No.1/2025.
Headnote
A) Arbitration - Appeal under Section 37(1)(c) - Scope of Interference - Commercial Courts Act, 2015, Section 13(1A) - The court examined the limited scope of interference with an arbitral award under Section 37 of the A&C Act, holding that the Commercial Court did not err in dismissing the appeal as the arbitral award was not patently illegal or perverse. (Paras 1-3) B) Contract - Memorandum of Understanding - Claim for Facilitation Fee - No Work Performed - The appellant claimed 2% of the total contract value under the MOU dated 06.06.2017 despite not executing any work for the contract awarded to the joint venture. The Arbitral Tribunal rejected the claim, and the Commercial Court upheld the award. The High Court found no ground to interfere. (Paras 2-3)
Issue of Consideration
Whether the Commercial Court erred in dismissing the appeal under Section 37 of the A&C Act against the arbitral award which rejected the appellant's claim for 2% of the total contract value under the MOU dated 06.06.2017.
Final Decision
The appeal is dismissed. The impugned judgment dated 12.02.2025 passed by the Commercial Court and the arbitral award dated 02.05.2024 are upheld. The delay in filing the appeal is condoned.
Law Points
- Arbitration
- Commercial Appeal
- Section 37(1)(c) Arbitration and Conciliation Act
- 1996
- Section 13(1A) Commercial Courts Act
- 2015
- Scope of interference with arbitral award
- No work no pay
- Interpretation of MOU
