Case Note & Summary
The Union of India (Petitioner) challenged an arbitral award dated 28th March, 2007 (amended on 19th April, 2007) passed by the sole Arbitrator (Chief Engineer, Pune) in a dispute arising out of a contract for replacement of Central Airconditioning Plant at Wecors, Naval Dockyard, Mumbai. The contract was awarded to M/s. Arctic India (Respondent) on 15th June, 1996 for Rs. 2,85,83,220/-, with work order issued on 2nd July, 1996, site handed over on 4th July, 1996, and completion date set as 3rd May, 1997. The respondent commenced work but delays occurred. The arbitrator allowed the respondent's claims for additional costs, damages, and interest, and rejected the petitioner's counterclaim for damages due to delay. The petitioner challenged the award under Section 34 of the Arbitration and Conciliation Act, 1996, arguing that the award was contrary to public policy, perverse, and based on no evidence. The court examined the arbitrator's findings and held that the arbitrator had considered all evidence and given plausible reasons. The court noted that the arbitrator found the delay attributable to the petitioner, not the respondent. The court reiterated that under Section 34, the court cannot re-appreciate evidence or substitute its own view if the arbitrator's view is plausible. The court found no perversity or error of law, and dismissed the petition, upholding the award.
Headnote
A) Arbitration Law - Challenge to Arbitral Award - Section 34 of the Arbitration and Conciliation Act, 1996 - Public Policy - The court considered whether the award was contrary to public policy or perverse. Held that the court cannot re-appreciate evidence or substitute its own view if the arbitrator's view is plausible. The award was based on evidence and reasoning, and no ground for interference was made out. (Paras 1-20) B) Contract Law - Delay and Damages - Breach of Contract - The dispute pertained to delay in completion of a contract for replacement of Central Airconditioning Plant. The arbitrator found that the delay was attributable to the petitioner (Union of India) and not the respondent contractor. Held that the findings on delay and damages were based on evidence and were not perverse. (Paras 2-15) C) Arbitration Law - Counterclaim - Rejection of Counterclaim - The arbitrator rejected the petitioner's counterclaim for damages due to delay. The court held that the arbitrator's decision was plausible and not arbitrary, as the delay was not caused by the respondent. (Paras 16-20)
Issue of Consideration
Whether the arbitral award dated 28th March, 2007 (amended on 19th April, 2007) is liable to be set aside under Section 34 of the Arbitration and Conciliation Act, 1996 on the grounds of being contrary to public policy, perverse, or based on no evidence.
Final Decision
The High Court of Bombay dismissed the Arbitration Petition No. 388 of 2007, upholding the arbitral award dated 28th March, 2007 (amended on 19th April, 2007). No order as to costs.
Law Points
- Arbitration and Conciliation Act
- 1996
- Section 34
- Public policy
- Perversity
- Plausible view
- Counterclaim
- Damages
- Interest
