Case Note & Summary
The case involves cross-appeals arising from an arbitration dispute between Oil & Natural Gas Corporation Limited (ONGC) and M/s. Soconord OCTG, SA (Soconord) concerning a contract for the supply of casing pipes for oil wells. The parties referred their disputes to arbitration, and upon disagreement between the arbitrators, the matter was referred to a retired Supreme Court Judge, V.D. Tulzapurkar, as Umpire. The Umpire, by an award dated 20th December 1999, dismissed Soconord's claim for payment and allowed ONGC's counterclaim for damages. Soconord filed a petition under Section 30 of the Arbitration Act, 1940 to set aside the award. The learned Single Judge, by an order dated 8th February 2002, set aside the award and remanded the matter to the Umpire on the ground that the Umpire had failed to consider certain aspects. Subsequently, by an order dated 14th January 2011, the learned Single Judge rendered certain findings against Soconord. ONGC appealed against the order setting aside the award and remanding the matter (Appeal No. 516 of 2002), while Soconord appealed against the findings rendered against it (Appeal No. 331 of 2011). The Division Bench of the Bombay High Court allowed ONGC's appeal and dismissed Soconord's appeal. The court held that the learned Single Judge erred in setting aside the award as the Umpire had considered all relevant material and the award was not vitiated by any error of law apparent on the face of the record. The court further held that the power to remand is not available under Section 30 of the Arbitration Act, 1940. Consequently, the Umpire's award was restored, and Soconord's appeal challenging the findings was dismissed as infructuous.
Headnote
A) Arbitration Law - Setting Aside Award - Section 30 of Arbitration Act, 1940 - Error of Law Apparent on Face of Record - The court considered whether the Umpire's award could be set aside under Section 30 of the Arbitration Act, 1940 on the ground that the Umpire failed to consider certain aspects. The Division Bench held that the learned Single Judge erred in setting aside the award as the Umpire had considered all relevant material and the award was not vitiated by any error of law apparent on the face of the record. The court emphasized that the scope of interference under Section 30 is limited and does not permit reappreciation of evidence or remand for fresh consideration unless the award is perverse or suffers from a legal error. (Paras 1-53)
B) Arbitration Law - Remand by Court - Section 30 of Arbitration Act, 1940 - Power to Remand - The court examined whether the learned Single Judge had the power to remand the matter to the Umpire after setting aside the award. The Division Bench held that the power to remand is not available under Section 30 of the Arbitration Act, 1940, and the proper course would have been to either uphold the award or set it aside finally. The remand was held to be without jurisdiction. (Paras 1-53)
C) Contract Law - Breach of Contract - Oil Well Casing Pipes - Damages - The dispute pertained to a contract for supply of casing pipes by Soconord to ONGC. The Umpire dismissed Soconord's claim for payment and allowed ONGC's counterclaim for damages due to alleged breach. The court upheld the Umpire's findings that Soconord had failed to supply pipes conforming to specifications and that ONGC was entitled to damages. The court found no error in the Umpire's appreciation of evidence or application of law. (Paras 1-53)
Issue of Consideration
Whether the learned Single Judge was justified in setting aside the Umpire's award and remanding the matter on the ground that the Umpire failed to consider certain aspects of the matter, and whether the findings rendered against Soconord by the learned Single Judge were correct.
Final Decision
The Division Bench allowed Appeal No. 516 of 2002 filed by ONGC, setting aside the orders of the learned Single Judge dated 8th February 2002 and 14th January 2011, and restored the Umpire's award dated 20th December 1999. Appeal No. 331 of 2011 filed by Soconord was dismissed as infructuous.
Law Points
- Arbitration Act
- 1940
- Section 30
- Scope of setting aside award
- Error of law apparent on face of record
- Non-consideration of material
- Remand by court
- Cross-appeals
- Umpire's award
- Contractual interpretation
- Breach of contract
- Damages
- Counterclaim
Case Details
2014 LawText (BOM) (07) 62
Appeal No. 516 of 2002 in Arbitration Petition No. 300 of 2000; Appeal No. 331 of 2011 in Arbitration Petition No. 300 of 2000
S.J. Vazifdar, A.K. Menon
Mr. Pradeep Sancheti, senior counsel with Mr. Sagar Ghogre and Mr. Anirudh Bhalwal i/b Vyas & Bhalwal for the Appellant in Appeal No.516 of 2002 and for Respondent No.1 in Appeal No.331 of 2011; Mr. S. Malik with Mr. K.G. Singhania, Mr. B.P. Barretto, Mrs. Annapurna and Mr. S.N. Verma i/b M/s. Singhania & Co. for the Appellant in Appeal No. 331 of 2011 and for the Respondent No.1 in Appeal No.516 of 2002
Oil & Natural Gas Corporation Limited (in Appeal No. 516 of 2002); M/s. Soconord OCTG, SA (in Appeal No. 331 of 2011)
M/s. Soconord OCTG, SA and V.D. Tulzapurkar (in Appeal No. 516 of 2002); Oil & Natural Gas Corporation Limited and V.D. Tulzapurkar (in Appeal No. 331 of 2011)
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Nature of Litigation
Cross-appeals against orders of learned Single Judge in arbitration petition under Section 30 of Arbitration Act, 1940 to set aside Umpire's award.
Remedy Sought
ONGC sought setting aside of the order setting aside the award and remanding the matter; Soconord sought setting aside of findings rendered against it by the learned Single Judge.
Filing Reason
The learned Single Judge set aside the Umpire's award and remanded the matter on the ground of non-consideration of certain aspects, and rendered findings against Soconord.
Previous Decisions
The Umpire (V.D. Tulzapurkar, J.) by award dated 20th December 1999 dismissed Soconord's claim and allowed ONGC's counterclaim. The learned Single Judge by order dated 8th February 2002 set aside the award and remanded the matter, and by order dated 14th January 2011 rendered findings against Soconord.
Issues
Whether the learned Single Judge was justified in setting aside the Umpire's award under Section 30 of the Arbitration Act, 1940 on the ground of non-consideration of certain aspects.
Whether the learned Single Judge had the power to remand the matter to the Umpire after setting aside the award.
Whether the findings rendered against Soconord by the learned Single Judge were correct.
Submissions/Arguments
ONGC argued that the learned Single Judge erred in setting aside the award as the Umpire had considered all relevant material and the award was not vitiated by any error of law apparent on the face of the record. The power to remand is not available under Section 30 of the Arbitration Act, 1940.
Soconord argued that the learned Single Judge correctly set aside the award due to non-consideration of certain aspects, and the findings against Soconord were erroneous.
Ratio Decidendi
The scope of interference under Section 30 of the Arbitration Act, 1940 is limited to errors of law apparent on the face of the award or misconduct. The court cannot reappreciate evidence or remand the matter for fresh consideration unless the award is perverse or suffers from a legal error. The Umpire had considered all relevant material, and the award was not vitiated by any error of law. The power to remand is not available under Section 30 of the Act.
Judgment Excerpts
The learned Judge, by an order and judgment dated 8th February 2002, set aside the award and remanded the matter to the learned Umpire on the ground that the Umpire had failed to consider certain aspects of the matter.
The Division Bench held that the learned Single Judge erred in setting aside the award as the Umpire had considered all relevant material and the award was not vitiated by any error of law apparent on the face of the record.
Procedural History
The parties referred disputes to arbitration. Arbitrators disagreed, matter referred to Umpire V.D. Tulzapurkar, J. Umpire passed award on 20th December 1999 dismissing Soconord's claim and allowing ONGC's counterclaim. Soconord filed Arbitration Petition No. 300 of 2000 under Section 30 of Arbitration Act, 1940 to set aside award. Learned Single Judge by order dated 8th February 2002 set aside award and remanded matter to Umpire. By order dated 14th January 2011, learned Single Judge rendered findings against Soconord. ONGC filed Appeal No. 516 of 2002 against the order setting aside award and remanding. Soconord filed Appeal No. 331 of 2011 against the findings. Division Bench heard both appeals and delivered judgment on 24th July 2014.
Acts & Sections
- Arbitration Act, 1940: Section 30
