Madras High Court
M/S.Suryadev Alloys And Power Pvt. Ltd vs East Coast Constructions & Industries ... on 4 October, 2018
Author: M.Sundar
Bench: M.Sundar
1
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on : 07. 03 .2019
Delivery on : 20. 03 .2019
CORAM
THE HON'BLE MR.JUSTICE M.SUNDAR
O.P.No.153 of 2019
&
A.No.1572 of 2019
M/s.Suryadev Alloys and Power Pvt. Ltd.,
Rep. by its Managing Director
Mr.Mukesh Agarwal
No.497 & 498 ISANA Building
8th Floor, Poonamallee High Road
Arumbakkam
Chennai – 106 ..Petitioner
Vs.
East Coast Constructions & Industries Ltd.,
Rep. by its Director
Buhari Buildings, No.4, Moores Road
Chennai- 600 006 .. Respondent
Original Petition filed under Section 34 of Arbitration and
Conciliation Act, 1996 (Act 26 of 1996) to set aside the award dated
04.10.2018 passed by the learned Arbitrator which had arisen out of the
dispute between the petitioner and the respondent insofar as allowing the
claims of the respondent is concerned and also in disallowing the claims of
the petitioner besides directing the respondent to pay the costs of the
petition.
For Petitioner : Mr.Vijay Narayanan
Senior counsel
http://www.judis.nic.in
2
for Mr.A.Abdul Hameed
M/s.AAV Partners
For Respondents : Mr.P.J.Sri Ganesh
JUDGMENT
‘Arbitral award dated 04.10.2018’ (hereinafter ‘impugned award’ for brevity) made by an Arbitral Tribunal (hereinafter ‘AT’ for brevity) constituted by a sole Arbitrator has been assailed in the instant ‘Original Petition’ (‘OP’ for brevity), which has been presented in this Court on 21.12.2018 under Section 34 of ‘The Arbitration and Conciliation Act, 1996’ (hereinafter ‘A & C Act‘ for brevity).
2. Instant OP was listed for admission before this Court and the sole respondent in the instant OP had lodged a Caveat. Mr.Vijay Narayan, learned senior counsel instructed by Mr.A.Abdul Hameed of M/s.AAV Partners (Law Firm) on behalf of sole petitioner and Mr.P.J.Sree Ganesh, assisted by Ms.Ami V. Kataria on behalf of Caveator (to be noted, sole respondent in instant OP has lodged a Caveat as mentioned supra) were before this Court. Learned senior counsel for petitioner, on instructions, and counsel on record for Caveator agreed that the main OP itself can be taken up, heard out and disposed of. Therefore, by consent the main OP itself is taken up for disposal.
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3. To be noted, a perusal of the impugned award reveals that it has been made in A.P.F No.13 of 2015 and Arbitral Case No.19 of 2015. This is mentioned only to complete the narrative.
4. Petitioner before me, namely ‘Suryadev Alloys and Power Pvt. Ltd.,’ (‘SAPL’ for brevity) was the sole respondent before AT and respondent before me, namely East Coast Constructions & Industries Ltd., (‘ECC’ for brevity) was the sole claimant before AT. For the purpose of convenience and clarity, parties shall be referred to by their aforementioned short forms/abbreviations. In other words, petitioner before me, which was a sole respondent before AT shall be referred to as ‘SAPL’ and sole respondent before me and claimant before AT shall be referred to as ‘ECC’.
5. PREFACE 5(i) Before this Court proceeds further it is noted that the caption to instant OP reads as follows:
'PETITION FILED UNDER SECTION 34(2)(A)(IV) & (V) and (B)(2) OF THE ARBITRATION AND CONCILIATION ACT, 1996 AS AMENDED IN 2015.' 5(ii) This Court pointed out that there is mis-description of clauses (which have been given alpha and numeric series in A & C Act) and sub-
http://www.judis.nic.in 4 clauses. Learned senior counsel for SAPL in his usual fairness submitted that instant OP may please be treated as one under Section 34(2)(b)(ii) of A & C Act read with (r/w) Clause (ii) of Explanation 1.
5(iii) In the backdrop of the aforementioned prefatory note, this Court now proceeds to set out a thumbnail sketch of facts that are imperative for appreciating this order and the same is done under the caption ‘Factual Matrix in a Nutshell’ infra.
6. FACTUAL MATRIX IN A NUTSHELL 6(i) It unfurls from the case file placed before this Court that it is the case of SAPL that it is an industry in Steel and Power plant business. SAPL , according to instant OP, has a wide range of reinforcement steel rebars, carbon steel cast billets, corrosion resistance steel rebars etc., This court is informed that these products find application in various engineering and construction industries.
6(ii) Sometime in the year 2011, SAPL invited tenders from various intending contractors for setting up 2 x 80 MV Captive Thermal Power Plant at New Gummidipoondi, Chennai. ECC participated in the aforesaid tender process and was issued Letter of Intent dated 09.05.2011 to carry out the aforesaid work of setting up Captive power plant at a cost of about Rs.850 http://www.judis.nic.in 5 Crores (hereinafter ‘said project’ for the sake of convenience and clarity) . Subsequent to aforesaid Letter of Intent dated 09.05.2011, a contract was entered into between SAPL and ECC. This contract is dated 16.05.2011 and this contract shall hereinafter be referred to as ‘said contract’ for the sake of convenience and clarity.
6(iii) There is no dispute or disagreement before me that there is an arbitration agreement i.e., arbitration agreement within the meaning of Section 7 of A & C Act between SAPL and ECC and said arbitration agreement is in the form of a Covenant in said contract. To be precise, the covenant is Article 35 in said contract. As there is no dispute or disagreement on this aspect of the matter, it is not necessary to delve any further into factual details in this regard. SAPL raised arbitrable disputes stating that ECC failed to execute the said project within the time frame stipulated in said contract and that SAPL was forced to deploy additional contractor from outside incurring additional expenditure, that on 18.06.2012 the scope of work qua the said contract was reduced owing to failure on the part of ECC to mobilize adequate manpower, that Unit-I qua said project was ultimately commissioned on 01.04.2013, though it was scheduled to be commissioned by the end of October 2012, that Unit-II was commissioned on 13.08.2013, though it was scheduled to be commissioned by end of January 2013 and that respondent was carrying out civil work in http://www.judis.nic.in 6 Unit-II till the end of September 2013. Raising arbitrable disputes on this basis, SAPL made claims under six different and distinct heads. There shall be little more elaboration on this infra.
6(iv) ECC resisted the aforesaid claim and averred that revenue loss for ECC was more than Rs.1.39 Crores.
6(v) Suffice to say that Arbitration agreement between the parties was invoked, AT was constituted and AT entered upon reference.
6(vi) On AT entering reference, SAPL filed a claim statement dated 31.12.2015 making claims under 6 different and distinct heads as mentioned supra. 6 different and distinct heads and the quantum of claims thereunder are as follows:
SI.No. Head of Claim Amount
1 Unpaid Bills Rs.1,43,33,509/-
2 Hire Charges for various Rs.4,07,62,096/-
machinery and materials
wrongly withheld
3 Price Variation for the total Rs.1,20,64,632/-
work executed including
extension
4 Overhead Expenses for the Rs.3,02,43,024/-
extended period of Contract
from May 2012 to April 2013
5 Loss of Profit due to reduction Rs.56,25,000/-
in scope of work
6 Cost of Plant and Machinery Rs.5,74,33,787/-
and Shuttering Material
6(vii) This Court refers to the claims as 6 different/distinct heads as 7th and 8th heads of claim are not specific qua said contract or said project http://www.judis.nic.in 7 as claims 7 and 8 are interest at the rate of 18% and costs of Arbitral proceedings respectively. To be noted, AT has referred to this as 8 heads of claim.
6(viii) SAPL filed a statement of defence styled/captioned ‘Counter Claim’ dated 16.02.2016. A perusal of the aforesaid pleadings of SAPL dated 16.02.2016 reveals that the counter claim is under 4 distinct heads and the details are as follows:
SI.No. Head of Claim Amount 1 Amount receivable from the claimant Rs.1,09,55,320/-
after adjusting all the bills with interest at the rate of 18% p.a. from the date of Award till payment in full 2 Amount paid to other contractor with Rs.12,00,000/-
interest at the rate of 18% p.a. from the date of Award till payment in full 3 Total revenue loss for the respondent Rs.1,39,96,80,000/-
from Units I and II on account of the delay caused by the claimant in not completing the project in time 4 Admitted amounts as per the letters Rs.90,36,127/-
dated 04.4.2013 and 28.12.2012 with interest at the rate of 18% p.a. 6(ix) As there is a counter claim, ECC filed a rejoinder in March of 2016 and pleadings were thus completed before AT. On the basis of http://www.judis.nic.in 8 aforesaid pleadings, four issues were framed by AT and they read as follows:
'1) Whether the respondent honoured the bills raised by the Claimant for the works done?
2) Who is responsible for the delays in the project?
3) Whether the claimant is entitled for the claims as prayed for?
4) Whether the Respondent is entitled to any counter claim and what reliefs?'' 6(x) After completion of pleadings, there were oral hearings. Oral and documentary evidence was let-in followed by arguments. On the side of ECC, one Mr.Mohamed Saleem, who is described as Assistant General Manager of ECC, deposed as CW1 and Exs.C1 to C72 were marked. On the side of SAPL, two witnesses, namely one Mr.S.Sivaraj, whom this Court is informed is President (power) of SAPL and Mr.Govind Gagoria, one of the Directors of SAPL were examined as RW1 and RW2 respectively. Exs.R1 to R64 were marked on the side of SAPL.
6(xi) This Court continues to refer to the claim made by ECC as 6 heads in the light of 7th and 8th heads being towards interest and costs of arbitration respectively as mentioned supra.
http://www.judis.nic.in 9 6(xii) With regard to the 6 heads of claim, three heads of claim namely, Rs.1,20,64,632/- towards price variation, Rs.3,02,43,024/- towards overhead expenses for extended period, Rs.56,25,000/- towards loss of profit were rejected and three heads of claim, namely Rs.1,43,33,509/- towards unpaid bills, Rs.1,35,87,365/- towards hire charges and Rs.3,15,88,582/- towards cost of machinery were partly allowed. To be noted, against a claim of Rs.4,07,62,096/- towards hire charges for machinery and materials, Rs.1,35,87,365 was allowed and with regard to the claim of Rs.5,74,33,787/- towards cost of plant, machinery and shuttering material, Rs.3,15,88,582/- was allowed. With regard to the counter claim made by SAPL, a sum of Rs.90,36,127/- being the 4th head of claim made towards admitted amounts of price and steel supplied by SAPL vide Exs.57 and 58 being letters dated 04.04.2013 and 21.05.2013 was allowed. The other heads of counter claim were not acceded to inter alia on the ground that the same had not been proved. It may not be necessary to delve more into these aspects of the matter as learned senior counsel for petitioner submitted that arguments in instant OP and the grounds on which impugned award are assailed shall be limited to Claims (b) and (f) or in other words claims 2 and 6, which were partly allowed (details of which have been set out supra).
http://www.judis.nic.in 10 6(xiii) Taking this Court through the impugned award, particularly Paragraph 36 of the impugned award, learned senior counsel for SAPL submitted that AT had held that ECC has not furnished details about the type of machineries and materials, probable hire charges that would have been earned in the specific period, details regarding hire charges so given are not supported by proof, but has still gone ahead and given 1/3 rd of amount claimed as hire charges. This according to learned senior counsel is unacceptable and is a ground to have the award set aside. It was also argued that it is impermissible to award hire charges and thereafter, also award cost for the machinery and material under the 6th head of claim. It was the specific submission of learned senior counsel that these two run into each other or in other words, these two contradict one another and therefore, the impugned award is liable to be set aside.
6(xiv) Responding to this, learned counsel for ECC submitted that Paragraph 36 of the impugned award has to be read as a whole. According to learned counsel for ECC, a perusal of Paragraph 36 in entirety would reveal that AT had returned a finding that machineries and shuttering materials of ECC has been wilfully withheld at the site. Thereafter, series of electronic mails particularly Exs.53 to 61 and 64 have been alluded to and the costs of the machineries and shuttering material has been set out in http://www.judis.nic.in 11 these mails. The concluding part of Paragraph 36, according to learned counsel for ECC only means that ECC has not given proof for the entire claim for having the total claim allowed, but there is enough and more materials /proof for 1/3rd of the claim.
6(xv) In this regard, a judgment of Hon’ble Supreme Court in McDermott International v. Burn Standard Co. Ltd., reported in (2006) 11 SCC 181) was pressed into service by learned counsel for ECC and attention of this Court was drawn to Paragraph 110. Referring to this McDermott principle, learned counsel for respondent submitted on a demurrer that though rough and ready quantum/price can be arrived at by AT, that by itself cannot be a ground for having an impugned award set aside. In any event, it is the submission of learned counsel for ECC that a reading of Paragraph 36 of the impugned award in its entirety would reveal that it only means that evidence to support the entire claim may not be available, as evidence in the form of Exs.C53 to 61 and 64 are available in which values and numbers have been mentioned and therefore, AT was right in awarding 1/3rd of the claim made. In other words it was specific submission that it is not a case of no evidence.
6(xvi) Elaborating on this submission, learned counsel for ECC submitted that the aforesaid Exs.C53 to 61 and 64 were marked by consent http://www.judis.nic.in 12 and a perusal of the deposition will reveal that witness of ECC being CW1 before AT was not confronted in cross-examination on this aspect of the matter.
6(xvii) With regard to the second and sixth heads of claim being awarded simultaneously and with regard to they running into each other, learned senior counsel for SAPL submitted that if ECC is entitled to hire charges, they are not entitled to costs for the same machinery and shuttering material. According to learned counsel, it is axiomatic that if ECC is entitled to costs of machinery and shuttering material, they would not be entitled to hire charges.
6(xviii) Responding to this aspect of the matter, Mr.Sri Ganesh, learned counsel for ECC submitted that upto 31.12.2015, which is the date of the claim statement, ECC has claimed hire charges and thereafter it has claimed costs of material as it is not in dispute that machinery and shuttering material were withheld/lying at the site and it is open to SAPL to appropriate the same.
6(xix) It was also asserted that the machinery and shuttering material belong to ECC and as long as it was deployed at the site of the said project, ECC is entitled to hire charges. It run upto 31.12.2015 and thereafter as http://www.judis.nic.in 13 machineries and shuttering materials have now been left at the site for SAPL, the cost was claimed and this has also been acceded to.
6(xx) Before this Court proceeds further, though it was projected on the side of SAPL that instant OP is predicated on 34(2)(b) (ii) r/w.Clause (ii) of Explanation 1, in the light of the submissions which have been alluded to supra, this Court is of the considered view that it would be appropriate to test the impugned award under Section 34(2A) also i.e., patent illegality ground.
6(xxi) Learned senior counsel for SAPL pressed into service a judgment of Supreme Court in State of Rajasthan and Another Vs. Ferro Concrete Construction Private Limited., reported in (2009) 12 SCC 1 for the principle that an award passed merely on the basis of claim statement without anything more and if there was no evidence at all, it is invalid. Specific reference was drawn to Paragraph 55, which reads as follows:
'55. While the quantum of evidence required to accept a claim may be a matter within the exclusive jurisdiction of the arbitrator to decide, if there was no evidence at all and if the arbitrator makes an award of the amount claimed in the claim statement, merely on the basis of the claim statement without anything more, it has to be held that the award on that account would be invalid. Suffice it to say that the entire award under this head is wholly illegal and beyond the http://www.judis.nic.in 14 jurisdiction of the arbitrator, and wholly unsustainable.' 6(xxii) The instant case, in the considered view of this Court, is clearly distinguishable on facts as it is not a case of no evidence (as mentioned supra), but it is a case with sufficient evidence which in the appreciation of AT was good enough to sustain the claims to the extent it did. As rightly pointed out by learned counsel for respondent Exs.53 to 64 are e-mails, which pertain to this aspect of the matter and that has been alluded to in Paragraph 36 of the impugned award itself. It is a matter of appreciation of evidence before it by AT. Therefore, obviously what the AT has concluded is, this evidence is not good enough to support the entire claim, but in the light of there being evidence, in the light of these exhibits being marked by consent and in the light of exhibits not being confronted in cross-examination of CW1, AT has awarded 1/3rd of the claim. Therefore Ferro Concrete Construction Private Limited case is distinguishable on facts. Having said that this Court is of the considered view that AT is the sole judge of the quality and quantity of evidence before it and this principle which is known as the Hodgkinson principle (as it was laid down in the celebrated Hodgkinson v. Fernie, the reference being 140 ER 712). To be noted, this Hodgkinson principle though an ancient English case law is by no means vintage as it has been repeatedly reiterated by Hon’ble Supreme Court in a line of authorities including the oft-quoted Associate Builders http://www.judis.nic.in 15 Vs. Delhi Development Authority case reported in (2015) 3 SCC 49. To be noted, Associate Builders was pressed into service by learned senior counsel for SAPL and this Court shall deal with the same infra.
6(xxiii) Associate Builders was pressed into service by learned senior counsel for the principle that ‘fundamental policy of Indian Law’ has been lucidly explained by the Apex Court in Associate Builders case. Specific reference was made to Paragraph 31, which reads as follows :
'31. The third juristic principle is that a decision which is perverse or so irrational that no reasonable person would have arrived at the same is important and requires some degree of explanation. It is settled law that where:
(i) finding is based on no evidence, or
(ii)an Arbitral Tribunal takes into account something irrelevant to the decision which it arrives at; or
(iii) ignores vital evidence in arriving at its decision, such decision would necessarily be perverse.' 6(xxiv) Before I proceed further, learned counsel for respondent placed before me Report No.246 of the Law Commission of India and submitted that the expansive meaning given to the term ‘public policy’ occurring in Section 34 was sought to be negated and the amendments by way of Explanation 2 to Section 34(2)(b)(ii) and proviso to 34(2A) was brought in for this very purpose.
http://www.judis.nic.in 16 6(xxv) A careful perusal of Section 34(2)(b)(ii) r/w.Clause (ii) of Explanation I reveals that an arbitral award being in contravention with ‘fundamental policy of Indian law’ is still a ground to hold that it is in conflict with public policy of India, but this is clearly controlled by Explanation 2, which says that while testing an arbitral award on this ground, it shall not give a passport and it shall not entail a review of the merits of the dispute. As contravention with fundamental policy of India law is still a part of the expression ‘conflict with public policy of India’ occurring in Section 34 of A & C Act, one can look into the elucidation qua fundamental policy of Indian law, but while testing an arbitral award that will be circumscribed by Explanation 2 which says that the test as to whether there is a contravention with fundamental policy of Indian law shall not entail a review on merits of the dispute.
6(xxvi) This takes us to the off-quoted Associated Builders case, which was pressed into service by learned senior counsel with regard to fundamental policy of Indian law. Placing reliance and reiterating Western Geco International Ltd., being ONGC Ltd., Vs.Western Geco International Ltd., reported in (2014) 9 SCC 263, Hon'ble Supreme Court in Associate Builders case laid down the three distinct juristic principles with regard to fundamental policy of Indian law. A perusal of the manner in which Associate Builders was pressed into service by learned senior counsel would http://www.judis.nic.in 17 reveal that the reliance is on the third juristic principle i.e., perversity/irrationality. A good working test for testing an arbitral award qua perversity/irrationality is contained in Gopi Nath case [Excise and Tazation Officer-cum-Assessing Authority V. Gopi Nath & Sons reported in 1992 Supp (2) SCC 312] and Kuldeep Singh V. Commissioner of Police reported in (2012) 1 SCC 594.
6(xxvii) A close perusal of the principles in aforementioned case laws will reveal that when an award is passed without evidence (no evidence) or it has been arrived at excluding relevant materials and by taking into account some irrelevant material, the same can be said to be perverse.
6(xxviii) More importantly, perversity and irrationality of decisions is to be tested on the time honoured touch stone of Wednesbury principle of reasonableness as in Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn., reported in (1948) 1 KB 223. To be noted, Associate Builders case itself reiterating Western Geco refers to Wednesbury principle as a touchstone for testing perversity/irrationality. Wednesbury principle, in short and simple terms would mean that an award to set aside on this ground should be so perverse or irrational that no reasonable person would have arrived at such a decision on the basis of material before AT. http://www.judis.nic.in 18 6(xxix) In the light of discussion supra, and particularly in the light of Exs.53 to 61 and 64, read in the context of CW1 not being confronted in cross-examination with regard to these exhibits coupled with the fact that these exhibits were marked by consent, in the considered opinion of this Court, it cannot be said to be a case of no evidence and it is certainly not a case of ignoring material and placing reliance on irrelevant material. At the end of the day, it is appreciation of evidence by the AT as mentioned supra, as in the celebrated Hodgkinson principle. It has also been referred to in Associate Builders case that AT is the sole and final judge of the quantity and quality of evidence before it. On a careful analysis / examination of impugned award, in the considered view of this Court it certainly passes the muster of Wednesbury test or in other words, the test of wednesbury principle of reasonableness as it cannot be gainsaid that the conclusion arrived at by AT is so perverse that no reasonable person could have arrived at such a conclusion with regard to second and sixth heads of claims.
6(xxx) It has already been alluded to supra by this Court that testing impugned award with regard to the plea of it being in conflict with public policy owing to being in conflict with fundamental policy of Indian law and testing the impugned award with regard to whether it is vitiated by patent illegality are clearly circumscribed by Explanation 2 to Section 34(2)(b)(ii) and proviso to Section 34(2A) respectively.
http://www.judis.nic.in 19 6(xxxi) As alluded to elsewhere in this order, test qua fundamental policy of Indian law shall not entail a review of the impugned award on merits of the dispute. Therefore, this Court cannot embark upon the exercise of reviewing the exhibits particularly when they were marked by consent without cross-examination. Likewise, this Court cannot re- appreciate the said evidence to test patent illegality.
6(xxxii) In this view of the matter, learned counsel for respondent pressed into service a recent judgment of Hon'ble Supreme Court (yet to be reported) being a judgment dated 18.02.2019 made in MMTC in Civil Appeal No.1862 of 2014. Learned counsel drew my attention to Paragraphs 10 and 11 of the aforesaid judgment. Considering the significance of the same in the light of the exercise that is being embarked upon in the instant order, this Court deems it appropriate to extract entire paragraphs 10 and 11, which read as follows:
'10. Before proceeding further, we find it necessary to briefly revisit the existing position of law with respect to the scope of interference with an arbitral award in India, though we do not wish to burden this judgment by discussing the principles regarding the same in detail. Such interference may be undertaken in terms of Section 34 or Section 37 of the Arbitration and Conciliation Act, 1996 (for short, "the 1996 Act"). While the former deals with challenges to an arbitral award itself, the latter, inter alia, deals with appeals against an order made under Section 34 setting aside or refusing to set aside an arbitral award.
11. As far as Section 34 is concerned, the position is wellsettled by now that the Court does not sit in appeal over the arbitral award and may interfere on merits on the limited ground provided under Section 34(2)(b)(ii), i.e. if the award is against the public policy of India. As per the legal position clarified through decisions of this Court prior to the http://www.judis.nic.in 20 amendments to the 1996 Act in 2015, a violation of Indian public policy, in turn, includes a violation of the fundamental policy of Indian law, a violation of the interest of India, conflict with justice or morality, and the existence of patent illegality in the arbitral award.
Additionally, the concept of the "fundamental policy of Indian law" would cover compliance with statutes and judicial precedents, adopting a judicial approach, compliance with the principles of natural justice, and Wednesbury reasonableness. Furthermore, "patent illegality" itself has been held to mean contravention of the substantive law of India, contravention of the 1996 Act, and contravention of the terms of the contract. It is only if one of these conditions is met that the Court may interfere with an arbitral award in terms of Section 34(2)(b) (ii), but such interference does not entail a review of the merits of the dispute, and is limited to situations where the findings of the arbitrator are arbitrary, capricious or perverse, or when the conscience of the Court is shocked, or when the illegality is not trivial but goes to the root of the matter. An arbitral award may not be interfered with if the view taken by the arbitrator is a possible view based on facts. (See Associate Builders v. DDA, (2015) 3 SCC 49). Also see ONGC Ltd. v. Saw Pipes Ltd., (2003) 5 SCC 705; Hindustan Zinc Ltd. v. Friends Coal Carbonisation, (2006) 4 SCC 445; and McDermott International v. Burn Standard Co. Ltd., (2006) 11 SCC 181).
It is relevant to note that after the 2015 amendments to Section 34, the above position stands somewhat modified. Pursuant to the insertion of Explanation 1 to Section 34(2), the scope of contravention of Indian public policy has been modified to the extent that it now means fraud or corruption in the making of the award, violation of Section 75 or Section 81 of the Act, contravention of the fundamental policy of Indian law, and conflict with the most basic notions of justice or morality. Additionally, subsection (2A) has been inserted in Section 34, which provides that in case of domestic arbitrations, violation of Indian public policy also includes patent illegality appearing on 8 the face of the award. The proviso to the same states that an award shall not be set aside merely on the ground of an erroneous application of the law or by reappreciation of evidence. 6(xxxiii) Hon'ble Supreme Court has traced the march of law qua fundamental policy of Indian law and has held that the position as it stands now is somewhat modified in the light of Explanation 2 to Section 34(2)(b)(i) and proviso to Section 34(2A).
7. This discussion and dispositive reasoning leads us to the conclusion which is set out infra.
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8. Conclusion:
In the light of the discussion and dispositive reasoning in the backdrop of preface and factual matrix in a nutshell it follows as a sequitur that the impugned award in instant OP when tested as to whether it is in conflict with public policy of India owing to being in contravention with fundamental policy of Indian law and as to whether it is vitiated by patent illegality in the light of Explanation 2 to Section 34(2)(b) and proviso to Section 34(2A), there is no compelling reason for judicial intervention under Section 34 of A & C Act.
9. This leads us to the decision in the instant OP.
10. DECISION:
Owing to all that have been set out supra, instant OP fails and the same is dismissed. However, considering the nature of instant OP and the trajectory of the hearing before this Court, this Court deems it appropriate to leave the parties to bear their respective costs. Consequently, A.No.1572 of 2019 is closed.
20.03.2019 Speaking order/non-speaking order Index: yes/no gpa http://www.judis.nic.in 22 M.SUNDAR.J., gpa Pre-delivery order in O.P.No.153 of 2019 & A.No.1572 of 2019 20.03.2019 http://www.judis.nic.in 23 Pre-Delivery Order in O.P.No.153 of 2019 To The Hon'ble Mr.Justice M.Sundar Most Respectfully Submitted GPA http://www.judis.nic.in 24 http://www.judis.nic.in