Case Note & Summary
The petitioner, Indian Oil Corporation Ltd., challenged an arbitral award dated 30.6.2005 made by the learned sole Arbitrator, Hon'ble Mr. Justice A.B. Palkar (Retired), directing the petitioner to pay Rs.3,12,74,444/- with interest to the respondent, Artson Engineering Ltd. The dispute arose from a contract for execution of work of 'Crude Distribution system' for AU V project at Gujarat Refinery site of the petitioner. The contract contained an arbitration clause. The respondent filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996 (Arbitration Application No.31 of 2002), and the parties arrived at consent terms appointing Mr. H. Parekh as arbitrator. However, Mr. Parekh could not make the award within the fixed time, and the parties did not agree on extension. Consequently, proceedings were initiated in the High Court, and in place of Mr. Parekh, Hon'ble Mr. Justice A.B. Palkar (Retired) was appointed as sole arbitrator. The parties appeared before the new arbitrator, filed pleadings, produced evidence, and the arbitrator made the award. The petitioner challenged the award under Section 34 of the Act. The court, after perusal of the award, found that the arbitrator had considered the evidence and material on record, and the findings were not perverse or beyond jurisdiction. The court held that the scope of interference under Section 34 is limited and the court cannot reappreciate evidence. Accordingly, the petition was dismissed with no order as to costs.
Headnote
A) Arbitration Law - Challenge to Arbitral Award - Section 34 of Arbitration and Conciliation Act, 1996 - Limited Grounds - The court considered whether the award could be set aside on grounds of perversity or jurisdictional error - Held that the court cannot reappreciate evidence and the arbitrator's findings were based on material on record, hence no interference warranted (Paras 1-2).
Issue of Consideration
Whether the arbitral award dated 30.6.2005 directing the petitioner to pay Rs.3,12,74,444/- with interest is liable to be set aside under Section 34 of the Arbitration and Conciliation Act, 1996.
Final Decision
The petition is dismissed. No order as to costs.
Law Points
- Arbitration award
- Section 34 challenge
- limited grounds
- no reappreciation of evidence
- arbitrator's jurisdiction
- consent terms
- substitution of arbitrator
Case Details
2006 LawText (BOM) (11) 41
Arbitration Petition No.408 of 2005
Mr. R.P. Bhatt with M.R. Bhatt i/b. B.K. & Girdharilal for petitioner; Mr. Milind Vasudeo i/b. Ms. Swapnila Rane for respondent
Indian Oil Corporation Ltd.
Subscribe to unlock Case Details (Citation, Judge, Date & more)
Subscribe Now
Nature of Litigation
Challenge to an arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996.
Remedy Sought
The petitioner sought to set aside the arbitral award dated 30.6.2005 directing payment of Rs.3,12,74,444/- with interest.
Filing Reason
The petitioner challenged the award on grounds permissible under Section 34 of the Act.
Previous Decisions
The respondent had earlier filed a petition under Section 9 of the Act (Arbitration Application No.31 of 2002), and the parties arrived at consent terms appointing Mr. H. Parekh as arbitrator. Mr. Parekh could not make the award within the fixed time, and subsequently, Hon'ble Mr. Justice A.B. Palkar (Retired) was appointed as sole arbitrator by the court.
Issues
Whether the arbitral award is liable to be set aside under Section 34 of the Arbitration and Conciliation Act, 1996.
Submissions/Arguments
The petitioner argued that the award should be set aside on grounds available under Section 34 of the Act.
The respondent supported the award, contending that the arbitrator's findings were based on evidence and within jurisdiction.
Ratio Decidendi
The court held that the scope of interference under Section 34 of the Arbitration and Conciliation Act, 1996 is limited and the court cannot reappreciate evidence. The arbitrator's findings were based on material on record and were not perverse or beyond jurisdiction, hence no grounds to set aside the award.
Judgment Excerpts
By this petition the Award dated 30.6.2005 made by the learned sole Arbitrator directing the petitioner to pay to the respondent an amount of Rs.3,12,74,444/- with interest, is challenged.
Perusal of the award shows that the learned Arbitrator has considered the evidence and material on record and has come to the conclusion. The findings recorded by the learned Arbitrator cannot be said to be perverse or beyond jurisdiction.
Procedural History
The respondent filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996 (Arbitration Application No.31 of 2002). The parties arrived at consent terms appointing Mr. H. Parekh as arbitrator. Mr. Parekh could not make the award within the fixed time, and the parties did not agree on extension. Proceedings were initiated in the High Court, and Hon'ble Mr. Justice A.B. Palkar (Retired) was appointed as sole arbitrator. The arbitrator made the award on 30.6.2005. The petitioner filed Arbitration Petition No.408 of 2005 challenging the award under Section 34 of the Act.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 9, Section 34
