Case Note & Summary
The Petitioner, an Austrian contracting company, challenged a majority arbitral award dated 11 July 2007 that dismissed its claim for payment of dewatering in an additional stretch of work under a contract with the Municipal Corporation of Brihan Mumbai. The contract, executed on 2 March 2001, involved trenchless rehabilitation of sewers and included dewatering as Item No. 3 of the Bill of Quantities. The Petitioner claimed that dewatering was required for the additional stretch, but the majority arbitrators rejected the claim. The High Court, under Section 34 of the Arbitration and Conciliation Act, 1996, examined whether the award was patently illegal or contrary to the contract terms. The Court found that the contract explicitly provided for dewatering as a separate item and the additional stretch was part of the contract scope. The majority award's reasoning that dewatering was not payable because it was not specifically mentioned for the additional stretch was contrary to the contract. The Court set aside the majority award on this claim and remitted the matter to the arbitral tribunal for fresh consideration. The petition was partly allowed.
Headnote
A) Arbitration - Challenge to Arbitral Award - Section 34 Arbitration and Conciliation Act, 1996 - Court's interference limited to grounds under Section 34 - Majority award rejected claim for dewatering in additional stretch - Held that the award suffers from patent illegality and is contrary to the terms of the contract, as the contract provided for dewatering as a separate item and the additional stretch was part of the contract (Paras 1-10).
Issue of Consideration
Whether the majority arbitral award rejecting the claim for dewatering in the additional stretch is liable to be set aside under Section 34 of the Arbitration and Conciliation Act, 1996.
Final Decision
The Court partly allowed the petition, set aside the majority award insofar as it rejected the claim for dewatering in the additional stretch, and remitted the matter to the arbitral tribunal for fresh consideration of that claim.
Law Points
- Arbitration
- Contract Interpretation
- Dewatering Claim
- Additional Work
- Remission
Case Details
2012 LawText (BOM) (11) 40
Arbitration Petition No. 164 of 2009
Mr. Zal Andhyarujina with Ms. Dohita Lewis, Mr. Javed Gaya, Ms. Vidya Choudhari, Ms. Mona Malvade i/by Chamber of Javed Gaya for the Petitioner; Mr. Kevic Setalwad, Senior Counsel with Ms. Daisy Dubash and Mr. Harshad Pimple i/by S.H. Ujjainwala for the Respondent
M/s. Angerlehner Structural & Civil Engineering Co.
Municipal Corporation of Brihan Mumbai
Subscribe to unlock Case Details (Citation, Judge, Date & more)
Subscribe Now
Nature of Litigation
Challenge to arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996.
Remedy Sought
Petitioner sought setting aside of majority arbitral award dated 11 July 2007 and confirmation of minority award.
Filing Reason
The majority arbitrators dismissed the claim for payment of dewatering in the additional stretch, which the Petitioner contended was contrary to the contract.
Previous Decisions
Majority arbitral award dated 11 July 2007 dismissed the claim; minority award was in favour of the Petitioner.
Issues
Whether the majority arbitral award rejecting the claim for dewatering in the additional stretch is patently illegal or contrary to the contract terms.
Submissions/Arguments
Petitioner argued that the contract included dewatering as a separate item and the additional stretch was part of the contract, so dewatering was payable.
Respondent argued that the award was within the arbitrators' jurisdiction and not liable to be interfered with.
Ratio Decidendi
The majority award's rejection of the dewatering claim for the additional stretch was patently illegal as it ignored the contract terms that provided for dewatering as a separate item and the additional stretch was part of the contract scope.
Judgment Excerpts
The majority learned Arbitrators have dismissed the claim for payment of dewatering in the additional stretch and thereby rejected all other claims.
The contract was initially for a period of 24 months, but was extended on justifiable grounds to nearly 29 months.
Procedural History
The Petitioner filed Arbitration Petition No. 164 of 2009 challenging the majority arbitral award dated 11 July 2007. The Court reserved judgment on 8 October 2012 and pronounced on 1 November 2012.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 34
