Case Note & Summary
The Petitioner, Bharat Lakhotya, sole proprietor of M/s. Salasar Hanumanji Industries, challenged an arbitral award dated 22 July 2010 under Section 34 of the Arbitration and Conciliation Act, 1996. The dispute arose from a supply contract with the Respondent, Bharat Sanchar Nigam Ltd. (BSNL), for Galvanized Tapered Steel Tubes. The Petitioner's tender was accepted for Rs.56,30,100/-, with delivery due by 15 December 2000. The Petitioner claimed that a labour strike from 20 September 2000 to 15 November 2000 prevented timely supply, and informed the Respondent by letter on 25 September 2000. The Assistant Labour Commissioner certified the strike on 11 January 2001. The Petitioner requested extension of time on 19 February 2001. The Respondent levied Liquidated Damages (LD) charges for delay. The arbitrator dismissed the Petitioner's claim for refund of LD charges and quashed the claim for sales tax. The Petitioner argued that the award was patently illegal and perverse, and that the strike was force majeure. The Respondent contended that the award was based on evidence and not liable to be interfered with. The court held that the arbitrator's findings were based on evidence, and the Petitioner failed to prove that the strike was the sole cause of delay. The court dismissed the petition, upholding the award.
Headnote
A) Arbitration - Challenge to Arbitral Award - Section 34 of the Arbitration and Conciliation Act, 1996 - Scope of Interference - The court considered whether the arbitral award was patently illegal or perverse. The court held that the award was based on evidence and findings of fact, and no interference was warranted under Section 34. (Paras 1-10) B) Contract - Force Majeure - Labour Strike - The Petitioner claimed that a labour strike constituted force majeure, entitling extension of time. The court noted that the Petitioner failed to prove that the strike was the sole cause of delay and that the Respondent did not accept the strike as force majeure. (Paras 3-6) C) Contract - LD Charges - Liquidated Damages - The Respondent levied LD charges for delayed supply. The court upheld the arbitrator's finding that the LD charges were correctly levied and no refund was due. (Paras 2-8)
Issue of Consideration
Whether the arbitral award dated 22 July 2010 dismissing the Petitioner's claim for refund of LD charges and quashing the claim for sales tax is liable to be set aside under Section 34 of the Arbitration and Conciliation Act, 1996.
Final Decision
The court dismissed the Arbitration Petition No. 59 of 2012, upholding the arbitral award dated 22 July 2010.
Law Points
- Section 34 of the Arbitration and Conciliation Act
- 1996
- Scope of interference with arbitral award
- LD charges
- Force majeure
- Labour strike as force majeure
- Extension of time
- Burden of proof
