Delhi District Court
M/S Wapcos Ltd vs M/S C And C Energy Pvt Ltd on 25 September, 2024
IN THE COURT OF ANURAG SAIN, DISTRICT JUDGE
(COMMERCIAL COURT-01), PATIALA HOUSE COURTS, NEW
DELHI
OMP (COMM.) 173/2019
WAPCOS Ltd.
Through its Authorized Representative
Sh. Ashish Sharma
Having its Registered Office at:
Kailash 5th Floor, 26, KG Marg,
New Delhi-110001
[email protected]
Also at:
76-C, Institutional Area,
Sector-18, Gurgaon,
Haryana-122015
[email protected]
.........Petitioner
Versus
C & C Energy Pvt. Ltd.
Through its Director
Having its Registered Address:
Block-F, Ground Floor,
The Mira Corporate Suites 1 & 2,
Old Ishwar Nagar, Mathura Road,
New Delhi-110065
.......Respondent
Date of institution : 20.09.2019
Date of reserving judgment : 05.08.2024
Date of pronouncement : 25.09.2024
OMP (COMM.) 173/2019 Page 1 of 44
JUDGMENT
1. The present petition under Section 34 of the Arbitration and Conciliation Act, 1996 has been filed by the petitioner for setting aside of Award dated 21.06.2019 passed by Ld. Sole Arbitrator.
2. Along with the present petition, the petitioner has also filed an application under Section 34(3) of the Arbitration and Conciliation Act, 1996 seeking condonation of two days delay in filing the present petition under Section 34 of the Arbitration and Conciliation Act, 1996.
3. It has been averred in the application that after the passing of the impugned award, the parties attempted to settle all their disputes and this fact has also been mentioned in one of the similar arbitral proceedings pending before the Ld. Arbitrator however, due to the reasons attributable to the respondent, the dispute could not be settled amicably. It has been further averred that the petitioner had to refer the award to the management and the decision was to be taken for filing the present petition Section 34 of the Arbitration and Conciliation Act, 1996 for challenging the award. It has been further averred that subsequently, meetings were required with the counsel for preparation of the present petition and it is subsequent to that when the present petition could be finalized after detailed OMP (COMM.) 173/2019 Page 2 of 44 discussions and deliberations and hence, there is a delay of two days in filing the present petition which is neither intentional nor deliberate but due to the reasons mentioned above. On these premise, the instant application has been moved on behalf of the petitioner.
4. No reply to the present application has been filed by the respondent.
5. Section 34(3) is reproduced herewith for better appreciation:
"(3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral tribunal:
Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter."
6. The Hon'ble Supreme Court of India in a case titled as Rani Kusum Vs. Kanchan Devi and Anrs, Civil Appeal No. 5066/2005 has held as under:-
"All the rules of procedure are the handmaid of justice. The language employed by the draftsman of processual law may be liberal or stringent, but the fact remains that the object of prescribing procedure is to advance the cause of justice. In an OMP (COMM.) 173/2019 Page 3 of 44 adversarial system, no party should ordinarily be denied the opportunity of participating in the process of justice dispensation. Unless compelled by express and specific language of the Statute, the provisions of the CPC or any other procedural enactment ought not to be construed in a manner which would leave the court helpless to meet extraordinary situations in the ends of justice".
7. In DDA Vs. Ajab Singh and Company, 2022 SCC Online Del 2236, the Hon'ble High Court of Delhi has held:-
"26. The Hon'ble Supreme Court in the case of State of Haryana Vs. Chandra Mani and Others, (1996) 3 Supreme Court Cases 132, in Paragraphs 11 and 12 has held as under:
"11. It is notorious and common knowledge that delay in more than 60 per cent of the cases filed in this Court -- be it are barred by limitation and this Court generally adopts liberal approach in condonation of delay finding somewhat sufficient cause to decide the appeal on merits. It is equally common knowledge that litigants including the State are accorded the same treatment and the law is administered in an even-handed manner. When the State is an applicant, praying for condonation of delay, it is common knowledge that on account of impersonal machinery and the inherited bureaucratic methodology imbued with the note-making, file-pushing, and passing-on-the-buck ethos, delay on the part of the State is less difficult to understand though more difficult to approve, but the State represents collective cause of the community. It is axiomatic that decisions are taken by officers/agencies proverbially at slow pace and encumbered process of pushing the files from table to table and keeping it on table for considerable time causing delay OMP (COMM.) 173/2019 Page 4 of 44
-- intentional or otherwise -- is a routine. Considerable delay of procedural red-tape in the process of their making decision is a common feature. Therefore, certain amount of latitude is not impermissible. If the appeals brought by the State are lost for such default no person is individually affected but what in the ultimate analysis suffers, is public interest. The expression "sufficient cause"
should, therefore, be considered with pragmatism in justice-oriented approach rather than the technical detection of sufficient cause for explaining every day's delay. The factors which are peculiar to and characteristic of the functioning of the governmental conditions would be cognizant to and requires adoption of pragmatic approach in justice-oriented process. The court should decide the matters on merits unless the case is hopelessly without merit. No separate standards to determine the cause laid by the State vis-à-vis private litigant could be laid to prove strict standards of sufficient cause. The Government at appropriate level should constitute legal cells to examine the cases whether any legal principles are involved for decision by the courts or whether cases require adjustment and should authorise the officers to take a decision or give appropriate permission for settlement. In the event of decision to file appeal needed prompt action should be pursued by the officer responsible to file the appeal and he should be made personally responsible for lapses, if any. Equally, the State cannot be put on the same footing as an individual. The individual would always be quick in taking the decision whether he would pursue the remedy by way of an appeal or application since he is a person legally injured while State is an impersonal machinery working through its officers or servants. Considered from this perspective, it must be held that the delay of 109 days in this case has been explained and that it is a fit case for OMP (COMM.) 173/2019 Page 5 of 44 condonation of the delay."
8. It is also a settled proposition of law that refusing to condone delay can result in meritorious matter being thrown out at the very threshold and the cause of justice being defeated. When substantial justice and technical consideration are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot have claim to have vested right in injustice being done because of non-deliberate delay.
9. Perusal of the record shows that the reasons so stated by the petitioner in the application are well founded and he has given plausible explanation as to why the present petition could not be filed within time prescribed though the same has been filed within the extended period of 30 days of Section 34 of the Act as permissible. In the present case, the delay is explained satisfactorily, the petitioner has acted bona fide, and not in a negligent manner, the delay can be condoned.
10.No doubt the petitioner has not filed the present petition within 90 days i.e. within statutory period as prescribed under Section 34 of the Arbitration and Conciliation Act, 1996. Undoubtedly there is a delay in filing the present petition however, the same is within the extended time of 30 days beyond three months but at the same time, this court is of the considered view that the petitioner has given the plausible reasons for the delay in filing the present petition.
OMP (COMM.) 173/2019 Page 6 of 4411.The court is guided by the principles of natural justice. The cardinal principle of 'Audi alteram partum' which is an essential rule of principles of natural justice is germane to the matter. 'Hear the other side' or 'that no one should be condemned unheard' is the basic postulate of cannons of justice. Right of hearing is not just a procedural formality, but an inalienable substantive right. The same cannot be dispensed with under any circumstance.
12.Accordingly, the instant application under Section 34(3) of the Arbitration and Conciliation Act, 1996 seeking condonation of delay in filing the present petition under Section 34 of the Arbitration and Conciliation Act, 1996 is allowed and disposed off accordingly.
13.Now coming back to the facts of the present case, it is the case of the petitioner that the petitioner was awarded the work of conducting Due Diligence Studies for Hwange Power Station from Zimbabwe Power Company and pursuant thereof, a Memorandum of Understanding dated 20.04.2010 was signed between the petitioner and Zimbabwe Power Company (ZPC). It is further the case of the petitioner that as per the agreement, the petitioner associated with M/s Chadha Power for the abovementioned work. It has been averred that after the completion of Phase-1, the petitioner started work on project Phse-II of the project i.e. Providing Skill Support for Operation and Maintenance of Hwange Power Station for which the OMP (COMM.) 173/2019 Page 7 of 44 petitioner associated with M/s Chadha Power for the said work vide agreement dated 05.01.2011. It has been further averred that the said agreement was for a period of 12 months and as per Article 5 of the agreement, on 27.01.2012, for next stage of service, an addendum was executed between the petitioner and M/s Chadha Power which was valid for 12 months from 01.02.2012. The said arrangement with M/s Chadha Power was accordingly finished w.e.f. 31.01.2013. The petitioner got the renewal of the contract from ZPC w.e.f. 04.03.2013 for a period of one year to provide operation and maintenance support for Hwange Power Station. The petitioner thereafter associated with the respondent vide separate agreement dated 28.03.2013 for the aforesaid work. This agreement, as per Article 5, was effective from 04.03.2013 for 12 months and thus, the tenure of the contract was from 04.03.2013 to 03.03.2014.
14.It has been further averred that payment part was governed as per Article 8 of the agreement. The respondent was to be paid an amount of USD 1,324,526/-. As per the agreed terms, the respondent was to be paid the aforesaid amount in equivalent INR at the exchange rate prevailing on the day of signing of the contract. The fixed rate of exchange on the date of signing of the contract was Rs. 54.39 against a US dollar and the same was specifically mentioned in the contract. The said exchange rate of Rs. 54.39 was the RBI reference rate at the prevailing time. It has been further averred that as per Article 9.2 of the OMP (COMM.) 173/2019 Page 8 of 44 agreement, the monthly payment was to be released against the invoice raised by the respondent subject to realization of quarterly advance payment of petitioner from NPC. As per Article 9.1 of the agreement, 20% of the contract value was released in equivalent INR at the rate of Rs. 54.39.
15.It has been further averred that during the subsistence of contract, vide addendum dated 14.10.2013, the parties amended Clause 8.1 of Article 8 which regulates remuneration and payment qua the parties and it was then agreed that the respondent was to be paid the equivalent INR based on the prevailing rate of US Dollar on the date of invoice raised by the respondent or on the prevailing rate of the date of payment released by petitioner which is lower in place of earlier provision of fixed exchange rate of Rs. 54.39/-.
16.It has been further averred that as per the invoices raised by the respondent for the month of April-September 2013 were submitted after the date of addendum i.e. 14.10.2013, the petitioner inadvertently made payment in INR in respect of these invoice as per addendum dated 14.10.2013 i.e. at per criteria of 'rate of US Dollar on the date of invoice raised by the respondent or on the prevailing rate of the date of payment released by petitioner, which is lower" whereas the respondent was entitled to receive the equivalent payment in INR at the rate of Rs. 54.39 as these invoices relates to the period prior to the date of signing of the addendum i.e. 14.10.2013.
OMP (COMM.) 173/2019 Page 9 of 4417.It has been further averred that the rate at which the inadvertent payment in equivalent INR as released to respondent in place of applicable exchange of Rs. 54.39 are as under:-
a. April 2013 Rs. 61.92 per USD
b. May 2013 Rs. 61.98 per USD
c. June 2013 Rs. 61.9 per USD
d. July 2013 Rs. 62.18 per USD
e. August 2013 Rs. 61.94 per USD
f. September 2013 Rs. 60.1 per USD
(The aforesaid exchange rates were also determined in accordance with RBI reference rate.)
18.The petitioner accordingly was entitled to deduct an amount of Rs. 38,28,733/- along with interest @ 18% (amount paid over and above the entitlement of respondent for the period from April 2013-September 2013) from the final bill of the respondent. In this regard, the petitioner also raised its counter claim before the Ld. Arbitrator.
19.It has been further averred that the petitioner has paid the amount as per contract for the month of October and November 2013 at the rate applicable as per addendum and the rates taken were RBI reference rate. As per addendum, the applicable RBI reference rate for the month of October and November 2013 was Rs. 60.1. The aforesaid payments were timely made to the respondent as and when received by the petitioner from ZPC.
20.It has been further averred that in the invoices submitted by the OMP (COMM.) 173/2019 Page 10 of 44 respondent for the month of September, October and November 2013, the equivalent INR to be released against the entitled USD payment was found to be imaginary and at higher side, although, no exchange rate is mentioned on the invoice for conversion of USD in INR but on the basis of simple math, the exchange rate taken by the respondent is Rs. 62.5 per USD for September 2013, Rs. 62 for October and November 2013 whereas the applicable exchange rate as per the contract and addendum was Rs. 60.1 per USD.
21.It has been further averred that the respondent had submitted invoice for the month of December 2013 in the same fashion as described in the aforesaid para and in this connection, it is submitted that the petitioner had already released approx. 75% for the month of December 2013 as per the exchange rate applicable in terms of the contract. The remaining portion was not released as the same was not received at that time from ZPC.
22.It has been further averred that the invoices for the month of January and February 2014 raised and submitted by the respondent were incorrect as described in the above paras i.e. by applying the wrong exchange rate.
23.It has been further averred that the respondent vide letter dated 20.03.2016 raised a demand of Rs. 1,99,33,831.33 and provided a table in support thereof. (It is pertinent to mention that the Proforma Invoice no. PI/2013-14/26 dated 12.03.2014 for the OMP (COMM.) 173/2019 Page 11 of 44 purported month of February 2013 was not included in the said demand). The said letter was duly replied by the petitioner vide its letter dated 02.08.2016 wherein respondent was informed that the exchange rate while raising the respective invoices are wrong and whatever the payment has been received by the ZPC, has been accordingly made to the respondent as per the contract.
24.Thereafter, the respondent vide letter dated 19.09.2016 surprisingly came up with a demand of Rs. 2,60,16,870.68 without any justification and calculation sheet to which vide its letter dated 27.09.2016 informed the respondent that its demand has already been replied in terms of letter dated 02.08.2016 and the petitioner was unable to reconcile the new figure of Rs. 2,60,16,870.68. In response to which, the respondent vide letter dated 27.09.2016 invoked the settlement procedure envisaged in the contract for resolution of dispute. The petitioner vide letter dated 13.10.2016 issued reminder for letter seeking clarification on 27.09.2016 the surprising demand of Rs. 2,60,16,870.68.
25.For the first time, the respondent vide letter dated 24.10.2016 introduced a reference of such Proforma Invoice no. PI/2013- 14/26 dated 12.03.2014 amounting to Rs. 63,24,204.35 as his clarification in respect to the query of the petitioner by mere mentioning it in the table annexed with letter. The petitioner informed the respondent that such invoice raised by him does not hold any water in the eyes of law as the same has been OMP (COMM.) 173/2019 Page 12 of 44 raised without any foundation.
26.The petitioner time and again informed the respondent that its claim for invoice from September 2013 till February 2014 are not in line with the provisions of contract executed amongst the parties and further the Proforma Invoice is factious and is being only used as a ploy to harass the petitioner. Further for the Proforma Invoice dated 12.03.2014, it has been mentioned that during the month of February 2013, no contract in any manner whatsoever was there as the contract amongst the parties was executed on 28.03.2013 while its effective date was 04.03.2013.
27.It has been further averred that the respondent is guilty of raising invoices based on fictitious calculation and further the respondent is also guilty of raising a false and illegal invoice dated 12.03.2014. All the certified invoices raised by the respondent in respect of MoU dated 28.03.2013 already stood paid and the respondent was not liable for any further claim. The remaining payment of the month of December 2013 to February 2014 cannot be completed as the respondent has not raised the said invoices as per the contract thereby trying to make false and fictitious claims.
28.In the aforesaid backdrop, the dispute arose between the parties and the matter was referred for adjudication to the arbitration. Both the parties participated in the proceedings. The respondent filed the claims and the petitioner also filed counter claim before the Ld. Arbitrator.
OMP (COMM.) 173/2019 Page 13 of 4429.The controversies between the parties in the pleadings and documents has led the Ld. Arbitrator to frame following issues on 07.03.2013:-
1. Whether the claimant is entitled to recovery of Rs.
2,42,36,017/- as prayed in Claim No.I in Statement of Claim ? (OPC)
2. Whether the claimant is entitled to interest @ 18% per annum upto 15.08.2017 amounting to Rs. 1,48,37,236/- as prayed in Claim No.II in Statement of Claim ? (OPC)
3. Whether the claimant is entitled to cost as prayed in Claim No.V and quantified before DAC ? (OPC)
4. Whether the Respondent/Counter Claimant is entitled to recovery of the amount of Rs. 38,28,733/- along with interest as prayed in Counter Claim No.I (OPR)
5. Whether the Counter Claim is barred by limitation ? OPC)
6. Whether the Respondent is entitled to cost as prayed in Counter Claim No. III (OPR)
7. Relief.
30.The impugned award was pronounced and delivered by the Ld. Arbitrator on 21.06.2019 and by virtue of the impugned award, Ld. Arbitrator allowed the claims of the respondent in part and dismissed all the counter claims of the petitioner.
31.The petitioner is only challenging the impugned award to the extent whereby the claims of the respondent have been allowed OMP (COMM.) 173/2019 Page 14 of 44 viz claim 1, claim 2, claim 3 and the counter claims of the petitioner have been dismissed viz counter claim 1 and counter claim 2. By way of the present petition, the petitioner has challenged the impugned award on the grounds such as the impugned award is, on the face of it, patently in violation of statutory provisions, against public interest adversely affects the administration of justice; the impugned award is passed in a cryptic manner causing grave injustice to the petitioner; the counter claims of the petitioner have been disallowed arbitrarily without adjudication and without any basis and the interest has been exorbitantly awarded in favour of the respondent. In the petition, the petitioner has placed reliance upon the judgments viz (1) ONGC Ltd. Vs Saw Pipes Ltd, (2003) SCC 705, (2) Hindustan Zinc Ltd. Vs. Friends Coal Carbonisation, (2006) 4 SCC 445, (3) DDA Vs R.S. Sharma and Co., (2008) 13 SCC 80, (4) Union of India Vs Col. L.S.N. Murthy, (2012) 1 SCC 718, (5) ONGC Ltd. Vs. Western Geco International Ltd., 2014 (9) SCC 263 and (6) Associate Builders Vs. Delhi Development Authority, 2015(3) SCC 49. On these premise, the petitioner has prayed for setting aside of the impugned award dated 21.06.2019.
32.No reply to the present petition has been filed by the respondent and on 26.02.2020, Ld. Counsel for the respondent submitted that he will straightway argue the matter.
33.I have heard Sh. Varun Sharma, Ld. Counsel for the petitioner OMP (COMM.) 173/2019 Page 15 of 44 and Sh. Arshdeep Singh Khurana along with Ms Tannavi Sharma, Ld. Counsels for the respondent and perused the record.
34.Ld. counsel for the petitioner has argued that the impugned award is against the facts as well as against the law and has been passed by the Ld. Arbitrator without application of mind and the award is a non-speaking award. It has been further argued that the impugned award is based on surmises and conjectures and it has been passed without considering the documents on record and is against the public policy. It has been further argued that the impugned award suffers of various irregularities, violation of principles of natural justice and against the public policy. On these premise, Ld. Counsel for the petitioner prayed that the impugned award be set aside.
35.On the other hand, Ld. Counsel for the respondent has argued that the objections are not maintainable as the award has been passed by the Ld. Sole Arbitrator after considering the material on record and is a reasoned award and it does not suffer from any infirmity or illegality as alleged by the petitioner. He therefore, argued that the objections are without any merit and are liable to be dismissed.
36.Before deciding the validity of the impugned Award, it is relevant to observe that the scope of inquiry in Section 34 of the Arbitration and Conciliation Act, 1996 proceedings is restricted to consideration whether any one of the grounds mentioned in OMP (COMM.) 173/2019 Page 16 of 44 Section 34 (2) of the Arbitration and Conciliation Act, 1996 exists for setting aside the Award. The scope of the interference by the court under Section 34 (2) of the Arbitration and Conciliation Act, 1996 has been time and again restricted in catena of judgments by the Hon'ble Superior Courts and it has been held that in proceedings under Section 34 of the Arbitration and Conciliation Act, 1996, the re-appreciation of the facts, evidence or interpretation of the terms of contract is not permissible. What is permissible is, if there is a patent illegality, apparent error on the face of the record, perversity in the Award or misconduct by the Ld. Arbitrator.
37.Section 34(2) of the Arbitration and Conciliation Act, 1996 reads as under:-
"34.Application for setting aside arbitral award-
(1)Recourse to a court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3). (2)An arbitral award may be set aside by the court only if-
(a) the party making the application furnishes proof that-
(i) a party was under some incapacity, or
(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or
(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or OMP (COMM.) 173/2019 Page 17 of 44
(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration;
Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or
(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or
(b) the court finds that-
(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or
(ii) the arbitral award is in conflict with the public policy of India.
Explanation 1 - For the avoidance of any doubt, it is clarified that an award is in conflict with the public policy of India, only if,-- (i) the making of the award was induced or affected by fraud or corruption or was in violation of Section 75 or Section 81; or (ii) it is in contravention with the fundamental policy of Indian law; or (iii) it is in conflict with the most basic notions of morality or justice. Explanation 2.-- For the avoidance of doubt, the test as to whether there is a contravention with the fundamental OMP (COMM.) 173/2019 Page 18 of 44 policy of Indian law shall not entail a review on the merits of the dispute.
(2A) An arbitral award arising out of arbitrations other than international commercial arbitrations, may also be set aside by the Court, if the Court finds that the award is vitiated by patent illegality appearing on the face of the award:
Provided that an award shall not be set aside merely on the ground of an erroneous application of the law or by re- appreciation of evidence.
(3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral tribunal:
Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter."
38.Normally, the general principles are that Arbitrator is a Judge of the choice of the parties and his decision, unless there is an error apparent on the face of the award which makes it unsustainable, is not to be set aside even if the court as a court of law would come to a different conclusion on the same facts. The court cannot reappraise the evidence and it is not open to the court to sit in appeal OMP (COMM.) 173/2019 Page 19 of 44 over the conclusion of the arbitrator. It is not open to the court to set aside a finding of fact arrived at by the arbitrator and only grounds on which the award can be cancelled are those mentioned in the Arbitration Act. Where the arbitrator assigns cogent grounds and sufficient reasons and no error of law or misconduct is cited, the award will not call for interference by the court in exercise of the power vested in it. Where the arbitrator is a qualified technical person and expert, who is competent to make assessment by taking into consideration the technical aspects of the matter, the court would generally not interfere with the award passed by the arbitrator.
39.The Hon'ble Supreme Court of India in a case titled as Associate Builders vs. Delhi Development Authority, (2015) 3 SCC 49 has held that the interference with an arbitral award is permissible only when the findings of the arbitrator are arbitrary, capricious or perverse or when conscience of the Court is shocked or when illegality is not trivial but goes to the root of the matter. It is held that once it is found that the arbitrator's approach is neither arbitrary nor capricious, no interference is called for on facts. The arbitrator is ultimately a master of the quantity and quality of evidence while drawing the arbitral award. Patent illegality must go to the root of the matter and cannot be of trivial nature.
OMP (COMM.) 173/2019 Page 20 of 4440.The Hon'ble Supreme Court of India in a case titled as Ssangyong Engineering & Construction Co. Ltd. vs. National Highways Authority of India, 2019 SCC OnLine SC 677 has held that under Section 34 (2A) of The Act, a decision which is perverse while no longer being a ground for challenge under "public policy of India", would certainly amount to a patent illegality appearing on the face of the award. A finding based on the documents taken behind the back of the parties by the arbitrator would also qualify as a decision based on no evidence inasmuch as such decision is not based on evidence led by the parties and therefore would also have to be characterized as perverse. It is held that a finding based on no evidence at all or an award which ignores vital evidence in arriving at its decision would be perverse and liable to be set aside on the ground of patent illegality.
41.The Hon'ble High Court of Delhi in a case titled as J.K. Kashypal Vs. M/s M.G. Capital Services and another (2002) II AD, (Delhi) 363 has held :-
"that the objections are to be examined on the parameters given in section 34 of the Act and observed in the following words:
"Furthermore the objections are to be examined on the touch stone of Section 34 of the Arbitration and Conciliation Act, 1996 and such a contention raised by the petitioner is not covered by any of the provisions contained in Section 34 of the said Act. The Arbitrator was the best OMP (COMM.) 173/2019 Page 21 of 44 judge to adjudicate upon the merits of the case and this court is not supposed to fathom the mind of the Arbitrator or to arrive at its own conclusion on merits or to sit as an Appellant Authority over the findings of the Arbitrator."
42.In a case titled as Himachal Joint Venture Vs. Panilpina World Transport (India) Pvt. Ltd. Reported in 2008 (3) Arbitration Law Reported 497, a Division Bench of the Hon'ble High Court of Delhi has held that :
"When the view taken by the Arbitrator is a plausible view, it is not permissible for the court to interfere with the Arbitrator's view merely because another view of the matter is possible. It is not permissible for the Court to re- appreciate the evidence placed before the Arbitrator. It is well-settled that the Arbitrator is the best judge of the quality as well as quantity of evidence and it will not be for the Court to take upon itself task of being a Judge of the evidence before the Arbitrator.
43.In a case titled as N.H.A.I. V. U.T.D. Cementation India Ltd., (2015) 14 SCC 21, Hon'ble Supreme Court of India has observed as follows:
"It is thus well settled that construction of the terms of a contract is primarily for an arbitrator to decide. He is entitled to take the view which he holds to be the correct one after considering the material before him and after interpreting the provisions of the contract. The Court while considering challenge to an arbitral award does not sit in appeal over the findings and decisions unless the arbitrator OMP (COMM.) 173/2019 Page 22 of 44 construes the contract in such a way that no fair-minded or reasonable person could do."
44.In a case titled as Delhi Airport Metro Express Pvt. Ltd. Vs. Delhi Metro Rail Corporation Ltd. in CA No.5628/2021 decided on 09.09.2021, the Hon'ble Supreme Court of India has observed as follows :
"23. For a better understanding of the role ascribed to courts in reviewing arbitral awards while considering applications filed under Section 34 of the 1996 Act, it would be relevant to refer to a judgment of this Court in Ssangyong Engineering and Construction Company Limited v. National Highways Authority of India (NHAI) wherein R.F. Nariman, J. has in clear terms delineated the limited area for judicial interference, taking into account the amendments brought about by the 2015 Amendment Act. The relevant passages of the judgment in Ssangyong (supra) are noted as under:− "34. What is clear, therefore, is that the expression "public policy of India", whether contained in Section 34 or in Section 48, would not mean the "fundamental policy of Indian law: as explained in paras 18 and 27 of Associate Builders [Associate Builders v. DDA, (2015) 3 SCC 49: (2015) 2 SCC (Civ) 204] i.e. the fundamental policy of Indian law would be relegated to "Renusagar" understanding of this expression. This would necessarily mean that Western Geco [ONGC v.Western Geco International Ltd., (2014) 9 SCC 263 : (2014) 5 SCC (Civ) 12] expansion has beendone away with. In short, Western Geco [ONGC V. Western Geco International Ltd., OMP (COMM.) 173/2019 Page 23 of 44 (2014) 9 SCC 263 : (2014) 5 SCC (Civ) 12], as explained in paras 28 and 29 of Associate Builders {Associate Builders v. DDA, (2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204], would no longer obtain, as under the guise of interfering with an award on the ground that the arbitrator has not adopted a judicial approach, the Court's intervention would be on the merits of the award, which cannot be permitted post amendment. However, insofar as principles of natural justice are concerned, as contained in Sections 18 and 34(2) (a) (iii) of the 1996 Act, these continue to be grounds of challenge of an award, as is contained in para 30 of Associate Builders [Associate Builders v. DDA, (2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204].
35.It is important to notice that the ground for interference insofar as it concerns "interest of India" has since been deleted, and therefore, no longer obtains. Equally, the ground for interference on the basis that the award is in conflict with justice or morality is now to be understood as a conflict with the "most basis notions of morality or justice". This again would be in line with paras 36 to 39 of Associate Builders [Associate Builders v. DDA, (2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204], as it is only such arbitral awards that shock the conscience of the court that can be set aside on this ground.
36.Thus, it is clear that public policy of India is now constructed to mean firstly, that a domestic award is contrary to the fundamental policy of Indian law, as understood in paras 18 and 27 of Associate Builders [Associate Builders v. DDA, (2015) 3 SCC 49: (2015) 2 OMP (COMM.) 173/2019 Page 24 of 44 SCC (Civ) 204], or secondly that such award is against basic notions of justice or morality as understood in paras 36 to 39 of Associate Builders [Associate Builders v. DDA, (2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204].
Explanation 2 to Section 34(2)(b)(ii) and Explanation 2 to Section 48(2)(b)(ii) was added by the Amendment Act only so that Western Geco [ONGC v. Western Geco International Ltd., (2014) 9 SCC 263 : (2014) 5 SCC (Civ) 12], as understood in Associate Builders [Associate Builders v. DDA, (2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204], and paras 28 and 29 in particular, is now done away with.
37. Insofar as domestic awards made in India are concerned, an additional ground is now available under sub−section (2−A), added by the Amendment Act, 2015, to Section 34. Here, there must be patent illegality appearing on the face of the award, which refers to such illegality as goes to the root of the matter but which does not amount to mere erroneous application of the law. In short, what is not subsumed within" the fundamental policy of Indian law", namely, the contravention of a statute not linked to public policy or public interest, cannot be brought in by the backdoor which it comes to setting aside an award on the ground of patent illegality.
38. Secondly, it is also made clear that re-appreciation of evidence, which is what an appellate court is permitted to do, cannot be permitted under the ground of patent illegality appearing on the face of the award.
39. To elucidate, para 42.1 of Associate Builders [Associate Builders V. DDA, (2015) 3 SCC 49: (2015) 2 OMP (COMM.) 173/2019 Page 25 of 44 SCC (Civ) 204], namely a mere contravention of the substantive law of India, by itself, is no longer a ground available to set aside an arbitral award. Para 42.2 of Associate Builders (Associate Builders V. DDA, (2015) 3 SCC 49: (2015) 2 SCC (Civ) 204), however, would remain, for if an arbitrator gives no reasons for an award and contravenes Section 31(3) of the 1996 Act, that would certainly amount to a patent illegality on the face of the award.
40. The change made in Section 28(3) by the Amendment Act really follows that is stated in paras 42.3 to 45 in Associate Builders [Associate Builders V. DDA, (2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204], namely, that the construction of the terms of a contract is primarily for an arbitrator to decide, unless the arbitrator construes the contract in a manner that no fair−minded or reasonable person would; in short, that the arbitrator's view is not even a possible view to take. Also, if the arbitrator wanders outside the contract and deals with matters not allotted to him, he commits an error of jurisdiction. This ground of challenge will now fall within the new ground added under Section 34(2−A).
41. What is important to note is that a decision which is perverse, as understood in paras 31 and 32 of Associate Builders [Associate Builders V. DDA, (2015) 3 SCC 49:
(2015) 2 SCC (Civ) 204], while no longer being a ground for challenge under "public policy of India", would certainly amount to a patent illegality appearing on the face of the award. Thus, a finding based on no evidence at all or OMP (COMM.) 173/2019 Page 26 of 44 an award which ignores vital evidence in arriving at its decision would be perverse and liable to be set aside on the ground of patent illegality. Additionally, a finding based on documents taken behind the back of the parties by the arbitrator would also qualify as a decision based on no evidence inasmuch as such decision is not based on evidence led by the parties, and therefore, would also have to be characterized as perverse."
45.Coming to the facts of the present case, in the present case, the petitioner has challenged the impugned award only to the extent whereby the claims of the respondent have been allowed viz claim 1, claim 2, claim 3 and the counter claims of the petitioner have been dismissed viz counter claim 1 and counter claim 2.
46. I have examined the impugned Award dated 21.06.2019 in question, arbitration proceedings and also given due consideration to the facts and pleadings of the case, written submissions filed as well as the submissions put forth by the respective Ld. Counsels for the parties and the relevant legal position.
47. It is admitted case of the petitioner herein that it was awarded the work of conducting Due Diligence Studies for Hwange Power Station from Zimbabwe Power Company (ZPC) and a MOU dated 20.04.2010 was executed between the petitioner herein and ZPC. It is also admitted case of the petitioner herein that the OMP (COMM.) 173/2019 Page 27 of 44 petitioner herein associated with M/s Chadha Power for the said work vide agreement dated 05.01.2011 which was valid for 12 months. It is also admitted case of the petitioner herein that on 27.01.2012, an addendum 1 was executed between the petitioner herein with M/s Chadha Power effective from 01.02.2012 till 31.01.2013 and the petitioner herein got the renewal of the contract from ZPC w.e.f. 04.03.2013 for a period of one year. It is also admitted case of the petitioner herein that the petitioner herein thereafter associated with the respondent herein vide separate agreement dated 28.03.2013 which was effective from 04.03.2013 till 03.03.2014. It is also admitted case of the petitioner herein that payment part was governed as per Article 8 of the agreement and the respondent herein was to be paid an amount of USD 1,324,526/- in equivalent INR at the exchange rate prevailing on the day of signing the contract i.e. Rs. 54.39 against a US Dollar. It is the case of the petitioner herein that during the subsistence of contract, vide addendum dated 14.10.2013, the parties amended Clause 8.1 of Article 8 qua remuneration and payment and it was then agreed that the respondent herein was to be paid the equivalent INR based on the prevailing rate of US Dollar on the date of invoice raised by the respondent herein or on the prevailing rate of the date of payment released by the petitioner herein which is lower in place of earlier provision of fixed exchange rate of Rs.54.39.
OMP (COMM.) 173/2019 Page 28 of 4448. The dispute between the parties is that the respondent herein raised the invoices for the month of April-September 2013 after the date of addendum dated 14.10.2013 and the petitioner herein, as per the case of the petitioner herein, inadvertently made payment in INR in respect of these invoices as per addendum dated 14.10.2013 i.e. Rs.61.92 per USD for the month of April 2013, Rs. 61.98 per US for the month of May 2013, Rs. 61.9 per USD for the month of June 2013, Rs. 62.18 per USD for the month of July 2013, Rs. 61.94 per USD for the month of August 2013 and Rs. 60.1 per USD for the month of September 2013 whereas the respondent herein was entitled to receive the equivalent payment in INR at the rate of Rs. 54.39 as these invoices relate to the period prior to the date of signing the addendum dated 14.10.2013. It is the case of the petitioner herein that the petitioner herein accordingly has to deduct an amount of Rs. 38,28,733/- along with interest @18% on the amount paid over and above the entitlement of the respondent herein for the period from April to September 2013 from the final bill of the respondent herein and in this regard, the petitioner herein had filed counter claim before the Ld. Sole Arbitrator which was dismissed by the Ld. Sole Arbitrator.
49. It is also admitted case of the petitioner herein that it has paid the amount as per the contract for the month of October and November 2013 as per the addendum at the rate of Rs.60.1 USD OMP (COMM.) 173/2019 Page 29 of 44 but as per the invoices submitted by the respondent herein for the months of September, October and November 2013, the exchange taken by the respondent herein is Rs. 62.5 per USD and for September to November 2013 is Rs.60.1 per USD which is at his whims and fancies and cannot be taken into consideration. It is also admitted case of the petitioner herein that the petitioner herein as already released approx. 75% for the month of December 2013 as per the exchange rate applicable in terms of the contract and the remaining portion was not released as the same was not received at that time from ZPC. It is further the case of the petitioner herein that invoices for the months of January and February 2014 raised and submitted by the respondent herein were incorrect as the exchange rate were as per the whims and fancies of the respondent herein.
50. In the present case, issues no.4 and 5 were framed by the Ld. Sole Arbitrator with respect to the counter claim filed by the petitioner herein which are reproduced as under:-
4. Whether the Respondent/Counter Claimant is entitled to recovery of the amount of Rs. 38,28,733/- along with interest as prayed in Counter Claim No.I (OPR)
5. Whether the Counter Claim is barred by limitation ? (OPC)
51. Perusal of the arbitral award shows that while deciding issue no.4, the Ld. Sole Arbitrator has observed that the addendum dated 14.10.2013 does not say whether it would affect prospectively or OMP (COMM.) 173/2019 Page 30 of 44 retrospectively but it says that the contract amount of USD 13,24,526/- shall be paid in equivalent Indian rupees at prevailing exchange rate on the date of invoice raised by the respondent herein or on the prevailing exchange rate on the date of payment released by the petitioner herein whichever is lower. It is not out of place to mention that there used to be time difference between the work done and the payments received from Zimbabwe Power Company (ZPC) as the payments used to be made by the petitioner herein to the respondent herein after receiving the same from ZPC. Perusal of addendum dated 14.10.2013 shows that the parties have agreed for prevalent exchange rate of USD and INR and not the fixed rate of Rs. 54.39/-. The Ld. Sole Arbitrator has interpreted addendum dated 14.10.2013. It is admitted case of the petitioner herein that all the invoices were raised by the respondent herein with the petitioner herein after addendum dated 14.10.2013 and thus, the petitioner herein was to pay the amount to the respondent herein at the prevalent exchange rate. Admittedly the petitioner herein has made the payment to the respondent herein at the then prevalent exchange rate of USD and INR qua the invoices in question and thus, the court finds that the Ld. Sole Arbitrator has given his reasoned findings only after correctly interpretating the addendum dated 14.10.2013 and considering the pleadings, documents while deciding issue no.4 against the petitioner herein. The court also finds that the OMP (COMM.) 173/2019 Page 31 of 44 challenge in the present petition is on substantive questions of facts which is not permissible under law. Further, the scope and purview is limited and it does not permit the court to replace the finding given by the Ld. Sole Arbitrator, by its own by re- appreciating the evidence produced before the Ld. Sole Arbitrator. Further the Ld. Arbitrator, while deciding issue no.4, has discussed the scope of the contract, its terms and conditions of the agreement and addendum dated 14.10.2013 and the documents and only thereafter arrived at the conclusion which in no way, can be said to be patently illegal, irrational, arbitrary etc. It is also evident in this case that the Ld. Sole Arbitrator, while passing the impugned award, in interpreting the contract, had applied his mind, discussed the issues in details and given a reasonable, meaningful, appropriate and effective interpretation of the contract and addendum dated 14.10.2013 after detailed discussion, which cannot be interfered with. The court also finds that the Award is not only within the confines terms of reference but also based on the terms and conditions of the contract and addendum dated 14.10.2013. The Ld. Sole Arbitrator has duly explained the reasons for arriving at his decisions and the petitioner herein has failed to brings its case before this court within the four corners of Section 34 (2) of the Arbitration and Conciliation Act, 1996.
52. As regards issue no.5 i.e. Whether the Counter Claim is barred by OMP (COMM.) 173/2019 Page 32 of 44 limitation ? (OPC), the record shows that the invoices were raised on 06.11.2013, 19.12.2013, 02.01.2014, 09.01.2014, 11.02.2014 and 12.03.2014 as per the admitted document Ex. CW1/21 by the petitioner herein and on the basis of the which the counter claim was filed by the petitioner herein before the Ld. Sole Arbitrator. Admittedly, the present claim was filed before the Ld. Sole Arbitrator on 23.11.2017. It is also admitted fact that the counter claim was in respect to the alleged excess payments made by the petitioner herein to the respondent herein on the prevalent exchange rate as per addendum dated 14.10.2013 instead of fixed exchange rate of Rs. 54.39 for the period from April 2013 to September 2013. While deciding this issue, the Ld. Sole Arbitrator has observed that vital document Ex. CW1/21 was filed by the petitioner herein before the Hon'ble High Court as per the directions of Hon'ble High Court in the petition under Sections 9 and 11 of the Arbitration and Conciliation Act 1996 filed by the respondent herein and the same has led the Ld. Sole Arbitrator to the irresistible conclusion that the counter claim filed by the petitioner herein is barred by time as the counter claim was filed by the petitioner herein before the Ld. Sole Arbitrator after three years of accrual of cause of action. It has been held in a case titled as State of Goa Vs. Praveen Enterprises, (2012) 12 SCC 581 that as per Section 3 (2) (b) of the Limitation Act 1963, the limitation will start from the day on OMP (COMM.) 173/2019 Page 33 of 44 which the counter claim is made, which is also applicable to the arbitration. In the present case, there is nothing on record to show that the impugned award, on the face of it, is against the public policy or the Ld. Sole Arbitrator has acted arbitrarily or lacked in judicial approach or the award is against the fundamental policy of India. All the relevant provisions of the contract were considered by the Ld. Sole Arbitrator. The court is of the view that the interpretation of the contract, as provided by the Ld. Sole Arbitrator, was reasonable and cannot be said to be perverse that no reasonable person could have reached the same conclusion. It is well settled law that the construction of the terms of a contract is primarily lie with Ld. Arbitrator to decide unless the Ld. Arbitrator construes the contract in a manner that no fair minded or a reasonable person would; in short that the Ld. Arbitrator's view is not even a possible view to take. Further the petitioner has failed to explain how the approach adopted by the Ld. Sole Arbitrator falls within the disqualifications of Section 34 (2) (a)
(iv) of the Arbitration and Conciliation Act, 1996 as there is no averment to substantiate the same. Moreover, the ground of 'lack of judicial approach, as pleaded by the petitioner, is no longer survives after the amendment 2015 and thus, there is no occasion for this court to interfere with the findings of Ld. Sole Arbitrator on this issue.
53. Now coming to issue no.1 i.e. " Whether the claimant is entitled OMP (COMM.) 173/2019 Page 34 of 44 to recovery of Rs. 2,42,36,017/- as prayed in Claim No.I in Statement of Claim ? (OPC). This issue has two parts i.e. Part A and Part B. In Part A, there are three invoices for the month of December 2013, January 2014 and February 2014 for Rs. 25,26,591/-, Rs. 81,30,531/- and Rs. 72,54,691/- respectively total amounting to Rs. 1,79,11,813/-. In Part B, there is one invoice for the month of February 2013 for Rs. 63,24,204/-. Perusal of the arbitral record shows that during arbitral proceedings, interim award dated 25.07.2018 was passed in favour of the respondent herein and against the petitioner herein in the sum of Rs. 1,48,69,113/- qua Part A on the basis of admission made by the petitioner herein in Ex. RW-1/AT filed by the petitioner before the Hon'ble High Court of Delhi and as per the Arbitral Award, the said amount has been received by the respondent herein from the petitioner herein during the arbitration proceedings and for the balance claim of Rs. 30,42,700/-, the Ld. Sole Arbitrator has adjudicated the same.
54.With respect to Part A, the respondent herein has claimed the payment with the exchange rate of INR 62/- per USD. During subsistence of the contract, the parties amended Article 8.1 as per addendum dated 14.10.2013 and agreed that the respondent herein was to be paid equivalent INR based on the prevailing rate of USD on the date of invoice raised by the respondent herein or on the prevailing rate on the date payment is released by the petitioner herein to the respondent herein whichever is OMP (COMM.) 173/2019 Page 35 of 44 lower. The Addendum-1 Ex. CW1/6 does not clarify whether the prevalent exchange rates of INR in USD were the market rates or RBI reference rates and thus, the Ld. Arbitrator has observed that the exchange rate should be taken as RBI reference rates however, neither of the parties have proved the prevalent RBI reference rate at the time of raising of the invoices by the respondent herein which was for the petitioner herein to prove the same. In the Award, Ld. Arbitrator has mentioned that Ld. Counsel for the respondent herein argued that assuming the applicable exchange rate was Rs.61.09 per USD and if three invoices in question are to be calculated at this exchange rates, even then Part A of Claim 1 would only be reduced by Rs. 3,28,121/- as the amount of three invoices is USD 3,60,572/- and when this amount converted into rupees at the rate of Rs.61.09 per Dollar, it comes to Rs. 2,20,27,343/- and if the same amount is converted at the rate of Rs.62/- per Dollar, it comes to Rs. 2,23,55,464/- and as such, if the same is accepted, a deduction of only Rs. 3,28,121/- can be done and the balance amount payable by the petitioner herein to the respondent herein comes to Rs.27,14,579/- and hold that the respondent herein is entitled to the amount of Rs. 27,14,579/- from the petitioner herein.
55.While deciding this issue, the Ld. Sole Arbitrator has d iscussed the issues in details and given a reasonable, meaningful, OMP (COMM.) 173/2019 Page 36 of 44 appropriate and effective interpretation of the contract and addendum dated 14.10.2013 after detailed discussion, which is evident in this case and thus, the same cannot be interfered with. Ld. Sole Arbitrator, while deciding this issue, has interpreted the contract and applied his mind and the Award is based on the terms and conditions of the contract and addendum dated 14.10.2013 and no interfere is called for.
56.So far as Part B is concerned, the Ld. Sole Arbitrator has held that the claim of the respondent herein for a sum of Rs. 63,24,204/- dated 12.03.2014 is not tenable being barred by time as this Part is beyond the scope of agreement and reference order dated 30.05.2017 passed by the Hon'ble High Court of Delhi and the Ld. Arbitration Tribunal has no jurisdiction to adjudicate Part B of Claim No.1. It is pertinent to mention that this Part B is not under challenge before this court in the present petition as the petitioner has only challenged the Award only with respect to the claims of the respondent herein which were allowed by the Ld. Sole Arbitrator and against the dismissal of the counter claims of the petitioner herein by the Ld. Sole Arbitrator.
57.As far as issue no.2 is concerned i.e. 'Whether the claimant is entitled to interest @ 18% per annum upto 15.08.2017 amounting to Rs. 1,48,37,236/- as prayed in Claim No. II in Statement of Claim ? OPC', perusal of the arbitral award shows OMP (COMM.) 173/2019 Page 37 of 44 that it is admitted case of the parties that the amount of Rs. 1,48,69,113/-, as awarded by the Ld. Sole Arbitrator vide interim award dated 25.07.2018, has already been paid by the petitioner herein to the respondent on 12.10.2018 and the Ld. Sole Arbitrator has observed that on the amount of interim award, the respondent herein is entitled to interest only up to 12.10.2018. Ld. Sole Arbitrator has also observed that as regards the claim of interest on the amount of Rs. 27,14,579/- to which the respondent herein was found entitled in issue no.1, the entitlement was for the pre-arbitration period and also during pendente-lite and future period till the payment is made by the petitioner herein to the respondent herein. The issue before the Ld. Sole Arbitrator was with respect to the three invoices for the months of December 2013 to February 2014 as the petitioner herein did not give the actual dates of payment received from ZPC. In this regard, Ld. Sole Arbitrator has observed that the payment with respect to the said invoices was received by the petitioner herein on 31.01.2017 and 24.08.2017 as per Ex. RW1/AT. Ld Sole Arbitrator while observing that interim award was passed on the basis of Ex. RW1/RT filed by the petitioner herein before the Hon'ble High Court along with forwarding letter dated 05.04.2017, has taken the approximate date as 01.04.2017 for grant of interest in the present case, after considering the overall facts and circumstances of the case and held that the respondent herein is entitled to simple interest @ OMP (COMM.) 173/2019 Page 38 of 44 18% per annum from 01.04.2017 till 15.08.2017 on the amount of Rs. 1,48,69,113/- of interim award amounting to Rs. 10,45,484.51 or say Rs. 10,45,500/- and while observing the same, Ld. Sole Arbitrator has granted simple interest @ 18% per annum w.e.f. 01.04.2017 till 15.08.2017 on the amount of Rs. 27,14,579/- as determined while deciding issue no.1 in favour of the respondent herein amounting to Rs. 1,88,234.082 or say Rs. 1,83,240/- and thus, Ld. Sole Arbitrator has granted total interest of Rs. 12,28,740/- (Rs.10,45,500/-+1,83,240/-) before pendency of the arbitration proceedings to the respondent herein.
58.It is the case of the petitioner that granting of such exorbitant interest without any reasoning along with costs, is an illegality on the part of Ld. Arbitrator and therefore, requires interference by this court. On the other hand, it is the case of the respondent that the Ld. Sole Arbitrator has discretion to award interest at such rate as he may deem to be reasonable.
59.As per Section 31 (7) of the Arbitration and Conciliation Act, 1996, the Ld. Sole Arbitrator is competent to award interest and further in terms of Section 3 of the Interest Act, 1978, the Ld. Sole Arbitrator is competent to award interest at the rates prevailing in the banking transaction. In a case titled as MSK Projects (I) (JV) Ltd. Vs. State of Rajasthan & Anr, 2011 (8) JT 37 (SC), it has been held that the Arbitrator is competent to award interest for the period commencing with the date of OMP (COMM.) 173/2019 Page 39 of 44 award or the date of decree or date of realization, whichever is earlier. While the amount of interest is a matter of substantive law, the grant of interest for the part award period is a matter of procedure. Further the Hon'ble High Court of Delhi in a case between the same parties titled as M/s Wapcos Limited Vs M/s C & C Energy Private Limited, FAO (COMM) 53/2021 dated 20.10.2022 has held that "Insofar as the award of interest is concerned, it is now well settled that the Arbitral Tribunal has wide discretion in awarding interest (See: Punjab State Civil Supplies Corporation Limited (PUNSUP) and Anr. Vs. Ganpati Rice Mills, SLP (C) 36655 of 2016, decided on 20.10.2021". In the said case between the same parties as before this court, the Hon'ble High Court of Delhi has observed that "In the present case, Wapcos had also claimed interest at the rate of 18% per annum and therefore, it is not open for Wapcos now to contend that the said rate is exorbitant and onerous and the Hon'ble High Court also finds no fault with the learned Commercial Court in declining to interfere with the impugned award ". Similar is the situation in the present case between the same parties. In the present case, the Ld. Sole Arbitrator has exercised the discretion by giving reasons that the transaction between the parties being of commercial nature, the simple interest @ 18% per annum seems to be reasonable in this case and therefore, the reasoning given by the Ld. Sole Arbitrator while awarding the interest, cannot be said to be unreasonable or perverse. In view OMP (COMM.) 173/2019 Page 40 of 44 of the same, the court does not find any illegality or arbitrariness in the impugned award with respect to the interest so awarded by the Ld. Sole Arbitrator.
60.Perusal of the award reflects that Ld. Sole Arbitrator has taken into consideration the dispute arose between the parties and the grounds raised by the petitioner to challenge the award, are factual in nature which have been already considered and adjudicated in the impugned award. It is outside the scope of Section 34 of the Act to re-appreciate the entire evidence and come to conclusion because such an approach would defeat the purpose of arbitration proceedings. It has been consistently held that when a court is applying the public policy test to an arbitration award, it does not act as a court of appeal and consequently, errors of facts cannot be corrected. A possible view by the arbitrator on facts has necessarily to pass muster as the arbitrator is the ultimate master of the quality and quantity of evidence to be relied upon when he/she delivers his/her arbitral award. Thus, an award based on little evidence or no evidence which does not measure up in quality to a trained legal mind would not be held to be invalid on this score. Once, it is found that the arbitrator's approach is not arbitrary or capricious, then it is the last word on facts.
61.A bare perusal of the arbitral award shows that Ld. Sole Arbitrator has examined all the relevant aspects of the contract, the correspondences made by the parties, the terms of the OMP (COMM.) 173/2019 Page 41 of 44 contract and the conduct of the parties. Ld. Sole Arbitrator has remained inside the parameters of the contract and construed the provisions of the contract. Ld. Sole Arbitrator while deciding the issues has operated within the four corners of the contract and has not travelled beyond it. Ld. Sole Arbitrator has not decided the issue contrary to the terms of the contract, so it cannot be said that Ld. Sole Arbitrator misconducted herself or the interpretation given by her is not reasonable. The petitioner has failed to establish that Ld. Sole Arbitrator has travelled beyond the terms of the contract.
62.Having examined the various contentions of the petitioner on the touchstone of the parameters of interference as explicitly laid down by the Hon'ble Supreme Court of India in several judgments referred to above, I am of the view that the impugned Award does not call for any interference. This Court cannot re-appreciate evidence or interpret the Clauses of the Agreement which the petitioner is calling upon the Court to do. The contentions of the petitioner are thus, rejected having no merits. I am of the view that the arbitration award being a reasoned one and does not suffer from any infirmity or error apparent on the face of the record. It is not for this Court to sit in appraisal of the evidence led before the Ld. Sole Arbitrator and this Court will not open itself to the task of being a judge on the evidence placed before the Ld. Sole Arbitrator which was subject matter of dispute. In the present case, the Ld. Sole OMP (COMM.) 173/2019 Page 42 of 44 Arbitrator has deliberated on the issues under reference which were within her competency. There are no allegations against the Ld. Sole Arbitrator of misconduct nor of having misconducted the proceedings which have either been specifically alleged by the petitioner or established. The Ld. Sole Arbitrator has duly explained the reasons for arriving at her decisions. There is nothing to indicate that the award violates Section 28 (3) of the Act or that, it is in conflict with the basic notions of justice and the fair play and fundamental policy of Indian law or in contravention of the terms of the agreement or that it lacks reasoning as pleaded in the petition.
63.Taking into consideration the various dates and events on record, I am of the considered opinion that the conclusion drawn by the Ld. Sole Arbitrator is based on sound reasons and the Ld. Sole Arbitrator has passed the award after considering the facts, evidence and material on record. In the impugned award, the Ld. Sole Arbitrator has given logical reasoning in reaching the just conclusion of the case. The award is well reasoned as per the terms and conditions of the agreement. There is nothing on record to show that impugned award is against the terms of the agreement and against the public policy. Also, there is no patent illegality in the award. The award is a well reasoned award, based on evidence and mathematical calculations and not only a possible but a plausible view.
64.In view of the above discussions, the present objections petition OMP (COMM.) 173/2019 Page 43 of 44 under Section 34 of The Arbitration and Conciliation Act, 1996 is dismissed. No order as to cost.
65. File be consigned to record room.
Announced in the open court on 25.09.2024 (Anurag Sain) District Judge (Commercial Court-01), Patiala House Courts, New Delhi OMP (COMM.) 173/2019 Page 44 of 44 OMP (COMM.)173/19 M/S WAPCOS LTD Vs. M/S C AND C ENERGY PVT LTD 25.09.2024 Present:- Sh. Varun Sharma, Ld. Counsel for the petitioner through video conferencing.
Sh. Arshdeep Singh Khurana, Ld. Counsel for the respondent through video conferencing along with Ms Tannavi Sharma, Advocate present in the court. Vide separate judgment announced in the open court today, the present objections petition under Section 34 of The Arbitration and Conciliation Act, 1996 is dismissed. No order as to cost. File be consigned to record room.
(Anurag Sain) District Judge (Commercial Court-01), Patiala House Courts Complex, New Delhi/25.09.2024