Bombay High Court
Larsen And Toubro Limited vs Union Of India (Uoi) And Ors. on 5 March, 1992
Equivalent citations: 1992(3)BOMCR333, 1988ECR127(BOMBAY)
JUDGMENT S.M. Jhunjhunuwala, J.
1. In the disputes which arose between Larsen and Toubro Limited (hereinafter referred as 'petitioner') on the one hand and Food Corporation of India, Madras (hereinafter referred as 'respondent') on the other hand, the learned arbitrators have made and published their Award, being the Award dated 14th November, 1987, which has been filed in this Court and numbered as Award No. 143 of 1987 (hereafter referred as 'the said Award'). The Arbitration Petition No. 40 of 1988 has been filed by the petitioner for modification of the said Award by deleting therefrom the claim awarded in favour of the respondent and the Arbitration Petition No. 43 of 1988 has been filed by the respondent alongwith the Union of India also for modification of the said Award by deleting therefrom the claim awarded in favour of the petitioner. Since both the petitions are connected with each other, it is convenient to dispose off the same by this common order.
2. At the very out set, it was disclosed to the Counsel appearing in the petitions that I have a share holding in the petitioner company. Both the Counsel stated that despite my having a shareholding in the petitioner company, they have no objection to my hearing of petitions. Accordingly, I have proceeded with the hearing of the petitions.
3. The petitioner owns sea going motor vessels and carries on business of carriage of Cargo from one port to another. By a Charter Party dated 10th September, 1982 between the petitioner and the respondent. Petitioner's Vessel 'HOLCK LARSEN' was let out to the respondent for carriage of cargo of wheat in bulk on the terms and conditions therein mentioned. The said vessel loaded on board a cargo said to weigh 25604.389 metric tonnes of wheat in bulk at Portland and carried the same for discharge at Visakhapatanam. Disputes between the petitioner and the respondent pertaining to computation of 'lay time' arose. According to the petitioner the said vessel had earned a despatch in the sum of Rs. 2,13,463.53 whereas according to the respondent, the said Vessel had earned a despatch of Rs. 2,60,920.15. The respondent while paying to the petitioner the balance 10% freight, deducted a sum of Rs. 47,456.62 as additional despatch and the petitioner not agreeing with such deduction, referred the matter to arbitration and appointed one Mr. J.C. Sheth as its Arbitrator. The respondent initially appointed one Mr. O.P. Motiwal as its Arbitrator and while appointing him, the respondent stated that the said reference was not only for deciding the petitioner's claim but also for deciding the claim of the respondent against the petitioner in the sum of Rs. 67,112.40 comprising of Rs. 62,652.35 towards damage and Rs. 4,460.05 towards extra time taken for discharge of damaged cargo by the said vessel at Vishakhapatnam Port. The respondent had thereafter appointed one Mr. G.J. Kedwaney as its Arbitrator in place of the said Mr. Motiwal. Thereafter, the petitioner had filed its statement of claim before the said Arbitrators. The respondent filed its reply to the statement of claim of the petitioner as also its counter claim to which the petitioner filed its rejoinder. The learned Arbitrators, after hearing the parties, made and published the said Award which is under challenged.
4. According to the petitioner, the respondent's claim against the petitioner for delivery of/damage to cargo did not form part of the reference before the Arbitrators and as such, that portion of the said Award which relates to a sum of Rs. 52,910/- Awarded in favour of the respondent and against the petitioner is to be expunged from the said Award and accordingly, the said Award be modified under section 15 of the Arbitration Act, 1940 (hereafter referred as 'the said Act'). In the alternative, it is the case of the petitioner that the provisions for Carriage of Goods by Sea Act of United States 1936 applied and since under section 6 of Carriage of Goods by Sea Act of United States 1936, if a suit is not brought within one year after delivery of the goods or the date when the goods should have been delivered, the claim gets extinguished, the counter-claim of the respondent stood extinguished as the said Vessel had completed the discharge on 6th December, 1982 and the respondent had filed reference in respect of its claim after a period of more than 2 years and 7 months therefrom. According to the petitioner since the petitioner stood discharged from all liabilities by reason of such extinguishment, the claim of the respondent was incapable of being referred to arbitration.
5. The respondent has challenged the said Award to the extent of Awarding of Rs. 47,283/- to the petitioner. According to the respondent, as per certificate issued by the Customs Authorities, the said Vessel arrived at Visakhapatnam only on 24th November, 1982 at 16.10 hours and not earlier and the laytime started only after the entry of the said Vessel in the customs. The Arbitrators could not in law reject the admitted entry of the said Vessel it customs and the said Award to the extent of awarding the sum of Rs. 47,283/- to the petitioner is perverse.
6. Mr. Bharucha, learned Counsel appearing for the petitioner while relying upon the said section 6 of the Carriage of Goods by Sea Act of the United States, 1936, has submitted that the claim of the respondent stood extinguished on 6th December, 1983 and as such, it could not be referred to arbitration. In the submission of Mr. Bharucha, there is an error apparent on the face of the said Award to the extent of awarding of the claim of the respondent against the petitioner since the Arbitrators have failed to appreciate the law correctly. Mr. Bharucha has further submitted that the Arbitrators are guilty of legal misconduct in allowing the said claim of the respondent against the petitioner.
7. Mr. R. Krishnan, the learned Counsel appearing for the respondent, has submitted that the said Award suffers from error of law apparent from the record and being contrary to the contractual clause in the said Charter Party whereunder the 'laytime' starts only after the Vessel enters in the customs, it is pervers.
8. I have considered the submissions made by the learned Counsel from both the sides. In my view, the Arbitrators constituted a Tribunal of the choice of the parties to the said Charter Party. An Award can be set aside if the Arbitrator has misconducted himself or the proceedings or has proceeded beyond jurisdiction. It can also be set aside where there are errors apparent on the face of the Award. But these are separate and distinct grounds. In case of errors apparent on the face of the Award, it can only be set aside if in the Award there is any proposition of law which is apparent on the face of the Award, namely, in the Award itself or any document incorporated in the award. In this case, the said Award is a non speaking Award. There is no legal proposition which is made basis of the said Award and which is erroneous. There is no error of law apparent on the face of the said Award. The jurisdiction of this Court under section 30 of the said Act is very much restricted and it is not open for this Court to probe into the minds of the Arbitrators to find out as to what weighed with them in making the said Award more particularly when the said Award is not a reasoned one. This Court is not sitting in appeal over the said Award nor is to examine the correctness thereof on merits. Mr. Bharucha did try to canvass before me that specific question of law arose before the Arbitrators and since there was no specific reference thereof to the Arbitrators, this Court is empowered to look into it and if satisfied that the said Award is based on erroneous proposition of law, this Court can set right the injustice done to the petitioner. The claim as also the counter claim were before the Arbitrators. The defence to the claim of the petitioner based on interpretation of the terms of the said Charter Party was very much before the Arbitrators. The defence to the counter-claim of the respondent based on applicability and/or interpretation of the said section 6 of Carriage of Goods by Sea Act of United State 1936 was also before the Arbitrators. The question of interpretation of the terms of the said Charter Party being a question of law, arose certainly during the course of the proceedings before the Arbitrators. Such a question has been decided by the Arbitrators on a view which was a possible one to take. Even if there was no specific reference of a question of law referred to the Arbitrators, there was a question of law involved. Even on the assumption that the view taken by the Arbitrators is not right , the said Award is not amenable to interference or correction by this Court as there is no proposition of law which can be said to be the basis thereof and which is erroneous. The Arbitrators are not guilty of any legal misconduct. The said Award is not perverse.
9. In the result, the said Award is upheld and consequently, both the Petitions are dismissed. However, in the circumstances of the case, there shall be no order as to costs thereof.