Case Note & Summary
The appeal under section 37 of the Arbitration and Conciliation Act, 1996 was filed by Maharashtra State Electricity Board (MSEB)/Maharashtra State Electricity Distribution Company Limited (MSEDCL) against the judgment and order dated 18/3/2009 passed by a Single Judge of the Bombay High Court, which dismissed MSEB's petition under section 34 and confirmed an arbitral award dated 18/06/2004. The dispute arose from a contract for supply, erection, commissioning, and maintenance of Load Management System gadgets, including Low Tension Switched Capacitors, awarded by MSEB to M/s Datar Switchgear Limited (DSL). DSL had claimed that MSEB breached the contract by failing to supply Distribution Transformer Centre (DTC) lists, leading to termination of the contract and a claim for damages. MSEB filed a counter-claim. The arbitral tribunal passed an award in favor of DSL. MSEB challenged the award under section 34 before a Single Judge, who initially set it aside. On appeal by DSL, a Division Bench partly allowed the appeal and remanded the matter. On remand, another Single Judge dismissed the petition and confirmed the award. MSEB then filed the present appeal. The court identified multiple points for determination, including whether MSEB committed breach by not supplying DTC lists, whether the contract was one complete contract, whether DSL waived its right to complete lists, whether the award was contrary to public policy, and whether damages and mitigation were properly considered. The court also addressed the scope of interference under sections 34 and 37 and the interpretation of public policy. The matter was heard extensively, with allegations of new grounds being raised. The judgment was reserved on 8/8/2013 and pronounced on 19/10/2013. The provided text of the judgment, however, is incomplete, and the final decision on the appeal is not included in the extracted text.
Issue of Consideration
Whether the Single Judge erred in confirming the arbitral award on grounds including breach of contract, public policy, damages, and other contractual issues
Law Points
- scope of interference under sections 34 and 37 of Arbitration and Conciliation Act
- 1996
- interpretation of public policy
- breach of contract
- waiver
- mitigation of damages
- award of damages
Case Details
2013 LawText (BOM) (10) 91
Appeal No. 166 of 2009 in Arbitration Petition No. 374 of 2004 alongwith Notices of Motion Nos. 3227 of 2010 and 461 of 2010 and Chamber Summons (L) Nos. 1467/2012, 1474/2012 & 1544/2012
V. M. Kanade, K. R. Shriram
Mr. Vikas Singh, Mr. P.P.Chavan, Mr. Chandra Prakash, Ms. Deepika Kalia, Mr. Rahul Sinha, Mr. R.A.Dada, Mrs. Swati Deshpande, Mr. Mukul Tally
Maharashtra State Electricity Distribution Company Ltd (formerly Maharashtra State Electricity Board)
M/s Datar Switchgear Limited, DSL Enterprises Pvt. Ltd., State of Maharashtra
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Nature of Litigation
Appeal under section 37 of the Arbitration and Conciliation Act, 1996 against the order of the Single Judge confirming an arbitral award in a contractual dispute
Remedy Sought
Appellant MSEB seeking to set aside the judgment and order of the Single Judge dated 18/3/2009 and the underlying arbitral award
Filing Reason
MSEB was aggrieved by the arbitral award holding it had breached the contract by not supplying DTC lists, and the Single Judge’s dismissal of its petition under section 34
Previous Decisions
Arbitral award on 18/06/2004; Single Judge (D.K. Deshmukh, J.) allowed petition and set aside award; Division Bench (Bilal Nazki & Kumbhakoni, JJ.) partly allowed appeal and remanded; on remand, Single Judge (R.S. Dalvi, J.) dismissed petition and confirmed award on 18/3/2009; present appeal filed; SLP filed by MSEB against remand order disposed of by Apex Court on 25/8/2009
Issues
Whether the Arbitral Tribunal and the learned Single Judge were justified in concluding that MSEB committed breach of contract by not supplying DTC Lists
Whether the contract was one complete contract that could not be split up
Whether DSL waived their right to receive complete lists of locations
Whether the Award is contrary to public policy under section 34 of the Arbitration and Conciliation Act, 1996
Whether damages were properly awarded
Whether the aspect of mitigation was properly considered
Scope of interference under sections 34 and 37 of the Arbitration and Conciliation Act, 1996, including the interpretation of public policy
Submissions/Arguments
MSEB raised new grounds in the appeal that were not urged before the Arbitral Tribunal or the Single Judge
DSL contended that MSEB’s new arguments should not be entertained
Both parties made extensive submissions on the interpretation of the Apex Court’s order dated 25/8/2009 regarding the remand
Judgment Excerpts
The Appellant – Maharashtra State Electricity Board which is now known as Maharashtra State Electricity Distribution Company Limited (MSEDCL) has filed this appeal under section 37 of the Arbitration & Conciliation Act, 1996 challenging the judgment and order passed by the learned Single Judge (Coram: Mrs. R.S. Dalvi, J.) dated 18/3/2009.
By the said judgment and order, the learned Single Judge dismissed the Petition which was filed by the Appellant herein and confirmed the Award dated 18/06/2004 which was given by the Arbitral Tribunal.
Dispute arose between the parties and, finally, DSL served a notice on MSEB on 19/2/1999 informing MSEB that they would not install further gadgets after December, 1998 in view of the breach committed by MSEB.
Procedural History
Arbitral award passed on 18/06/2004; MSEB filed Arbitration Petition under section 34; Single Judge (D.K. Deshmukh, J.) allowed the petition and set aside the award; DSL preferred appeal under section 37; Division Bench (Bilal Nazki & Kumbhakoni, JJ.) partly allowed and remanded to Single Judge; order of remand challenged by both parties; DSL’s appeal against remand dismissed; Arbitration Petition reheard by Single Judge (Mrs. R.S. Dalvi, J.) who dismissed the petition and confirmed the award on 18/3/2009; MSEB filed present appeal; during pendency, interim orders passed and further orders obtained; SLP filed by MSEB against remand order disposed of by Apex Court on 25/8/2009.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 34, Section 37
- Electricity (Supply) Act, 1948: Section 5(1)
