Delhi District Court
Ms Electronic Planet Anr vs Samsung India Electronic Pvt Ltd Anr on 24 July, 2024
IN THE COURT OF MS. PURVA SAREEN,
DISTRICT JUDGE-01, SOUTH, SAKET COURT, NEW DELHI
Arbitration No.20597/16
DLST-01-000133-2011
1. M/s. Electronic Planet,
66/2, The Mall, Opposite Military Hospital,
Ambala Cantt, through its Prop.
Sh. Naresh Kumar, Resident of House No.23,
Sector 11, Panchkula.
2. Naresh Kumar,
Prop. of M/s. Electronic Planet,
66/2, The Mall, Opposite Military Hospital,
Ambala Cantt, through its Prop.
Sh. Naresh Kumar, Resident of House No.23,
Sector 11, Panchkula.
.... Plaintiffs
Vs
1. Samsung India Electronic Pvt. Ltd
Through its Managing Director,
2nd, 3rd & 4th Floor, Vipul Tech Square,
Golf Course Road, Sector-43,
Gurgaon.
2. Sh. Sanjay Rai
Sole Arbitrator, Vice President,
Samsung India Electronic Pvt. Ltd.,
2nd, 3rd & 4th Floor, Vipul Tech Square,
Golf Course Road, Sector-43,
Gurgaon.
..... Defendants
Date of institution of case : 06.07.2011
Date for reserving judgment : 15.05.2024
Date of pronouncement of judgment : 24.07.2024
Arbitration No.20597/16 Page No.1
JUDGMENT
Petition under Section 34 of the Arbitration & Conciliation Act, 1996, Challenging the Award dated 28.03.2011 passed by respondent no.2.
1. Vide the present judgment, I shall decide the objections raised by the petitioner against the award passed by the arbitrator / respondent no.2. The present petition under Section 34 of Arbitration & Conciliation Act 1996 (hereinafter referred as ' The Act') has been filed by the petitioner stating that petitioner was appointed by respondent no.1 as authorised service centre at Ambala vide agreement dated 01.09.2022 and the petitioner firm provided the services as required in terms of the agreement to the customers but authorities of respondent no.1 created such a suffocating atmosphere which made it impossible for the petitioner to continue with the said arrangement and thus forced by the circumstances, the agreement dated 01.09.2022 was terminated by giving one month notice by petitioner vide letter dated 07.01.2006 and thus the agreement came to an end w.e.f. 07.02.2006.
2. It is stated that all the claims of the petitioner were pending settlement since long with respondent no.1 and at the time of termination of agency a sum of Rs.29,78,130.23 was due and payable by respondent no.1 against various claims for which a statement of claims was also submitted. Certain documents were sought by respondent no.1 from petitioner and petitioner duly submitted the same. It is stated that officials of respondent no.1 did not remove the material in the shape of stock of spares and other accessories which was removed after a lot of persuasion and follow up by the petitioner only on 19.12.2006 after a lapse of more than 10 months after termination of the agreement due to which the petitioner suffered loss and damages. Vide letter dated 23.07.2007, the respondent no.1 accepted the claim of the Arbitration No.20597/16 Page No.2 petitioner to the extent of Rs.12,36,404.82 as full and final settlement against the claim of petitioner for a sum of Rs.29,78,130.23. In response to that letter dated 23.07.2007, petitioner vide its letter dated 01.08.2007 refuted all the allegations and submitted that in terms of agreement dated 01.09.2002, whereby relationship between the parties was created imposed an obligation upon respondent no.1 to settle all the accounts within seven days from the day of submission of claims. The agreement came to an end during the tenure of one Sh. Pankaj Khanna, who later on resigned from the services of respondent no.1. The full and final settlement was inordinately delayed by the respondent despite numerous communications/letters dated 03.02.2006, 08.02.2006, 13.02.2006, 20.02.2006, 08.03.2006 and 10.03.2006.
3. It is further stated that the petitioner had completed all the formalities in terms of letter dated 12.01.2006 i.e. handing over the CSR Cards, Glowsign Boards, no dues from other ASC's and dealers. All the supporting documents in respect of the claims of the petitioner were submitted on 16.02.2006 by respondent no.2 by personally visiting Gurgaon office of respondent. Suddenly, on 19.12.2006 Sh. Pankaj Khanna (BSM Haryana) alongwith a team of other officials took charge of the inventory, which was done after a lapse of more than 10 months from the termination of the contract.
4. It is further stated that one Sh. Amit Bhati, Executive of the respondent no.1 visited the business premises of petitioner in his absence and took number of documents relating to a number of pending claims of petition, due to which petitioner even lodged a complaint with local police. Since respondent no.1 was well aware about illegal removal of material Arbitration No.20597/16 Page No.3 documents pertaining to the claims of the petitioner, it was due to this reason, a false and frivolous objection with regard to non-submission of documents being raised by the respondent. Since the claims of the petitioner reiterated vide letter dated 01.08.2007 were rejected by respondent no.1 vide letter dated 24.10.2007, the petitioner invoked the Arbitration clause and sought appointment of abitrator and ultimately Sh. D K Bhagotra, vice President of company was appointed as sole Arbitrator who initiated the proceedings but he resigned on 19.12.2009 from the services of respondent no.1.
5. Thereafter, respondent no.2 was appointed as sole Arbitrator by respondent no.1. Petitioner submitted the relevant documents and some more documents were sought to be produced by petitioner while proceedings were pending for leading evidence by parties but the request of the petitioner was turned down by respondent no.2. The Arbitrator is to adjudicate the claims of the parties and was duty bound to accept all the documents sought to be produced by parties which was not done by him.
6. On 28.03.2011, respondent no.2, the Arbitrator passed an award whereby the claims of the petitioner were rejected and only those claims which were admitted and accepted by respondent no.1 were allowed.
7. The petitioner took the following objections against the arbitral award:
i) The said award is liable to be set aside and matter is liable to be remitted back to some independent Arbitrator for fresh decision as respondent no.2 did not act independently and in a fair and impartial manner and due to the illegal acts of respondent no.1, petitioner cannot be made to suffer. He acted in capacity of the Vice President of respondent no.1 and failed to look into Arbitration No.20597/16 Page No.4 criminal act and conduct of the Executive of respondent no.1, who illegally removed important and relevant documents from the premises of the petitioner and also failed to look into the controversy and to exercise his jurisdiction properly. The documents sought to be produced by the petitioner related to the claims and were required to be corroborated with documents already submitted by the petitioner thus no prejudice was going to be caused to other party and the ld. Arbitrator failed to provide a fair opportunity to the petitioner. Instead of deciding the claim within 7 days, he kept on sitting over the matter for more than one and a half year.
ii) Respondent no.1 had never denied his liability and respondent no.2 was only required to adjudicate upon the disputed claims and he had failed to even determine the claims which were admitted by respondent no.1.
iii) All the documents which were relevant were submitted by the petitioner at the time of the evidence. Certain documents which were sought to be produced were refused to be taken on record by respondent no.2 without assigning any reason and respondent no.2 therefore acted in totally illegal and arbitrary manner.
iv & v) Respondent no.2 failed to assign any reason for rejecting the request of the petition to submit the documents, which were material and relevant to the just and proper adjudication of the claim. Production of those documents could not cause any prejudice to respondent no.1 as he had got sufficient opportunity to rebut the same.
8. It is further stated that Section 31 (7) (b) of the Arbitration & Conciliation Act, 1996 provided for grant of interest @ 18% per annum but respondent no.1 had awarded interest @ 7.5% per annum which is towards much lower side and also failed to assign any reason for such low interest. The ld. Arbitrator passed the award on the basis of conjectures and surmises and the Arbitration No.20597/16 Page No.5 same is not sustainable in the eyes of law in respect of the claims.
9. It was further stated that after passing of the award, respondent no.1 sent the amount of the award through cheque no.380050 dated 04.05.2011 for Rs.12,05,072.93. Then petitioner sent a letter dated 16.05.2011 informing the respondent no.1 about challenging the award under Section 34 of the Arbitration & Conciliation Act stating that encashment of the cheque would be without any prejudice to his rights of challenging the award. The petitioner received the award through post on 02.04.2011 at Panchkula. Hence, the present petition was filed by the petitioner seeking setting aside of award dated 28.03.2011.
10.Reply to the petition was filed by respondent no.1 stating that the grounds put forth by the petitioner for assailing the award dated 28.03.2011 passed by the ld. Arbitrator were misconceived, misplaced, erroneous, devoid of merits and untenable and as such they were not admitted by respondent no.1 and the present petition is liable to be dismissed. It is stated the the ld. Arbitrator had passed a reasoned order on the basis of the documents filed by the parties and the court under the garb of objections filed under Section 34 of the Arbitration & Conciliation Act, 1996 could not sit in appeal over findings of the facts. It is not for this court while adjudicating proceedings under Section 34 to appraise the evidence as it is for the Arbitrator to decide the quality and quantity of the evidence. The award is not required to be interfered with merely because this court may have given a different conclusion than the one by the ld. Arbitrator. The Arbitrator as judge was chosen by the parties and his decision is final subject to the scope of scrutiny under (2) of Section 34 of the Act. The view taken by the Arbitrator is a plausible view and is based on the material and facts produced before Arbitration No.20597/16 Page No.6 him and there is no justification of interfering with the arbitral award dated 28.03.2011. Ld. Arbitrator rightly concluded that the petitioner had failed to produce any evidence in order to prove his claim.
11.It is stated that it is evident from the arbitral record that parties were provided ample opportunities to file their respective evidence, whereas the petitioner had failed to produce the documents to substantiate his claim despite opportunities. No objection was taken by the petitioner before the ld. Arbitrator that he was not being permitted to file the additional documents. In fact the date of final arguments was fixed with the consent of both the parties. Section 31 (7) of the Act provides that where parties do not agree upon the rate of interest, the Arbitral Tribunal while awarding payment of money may include in the sum on which the award is made an interest at such rate as is deemed reasonable on the whole or any part of the money. In the present case, the matter of interest was entirely left on the discretion of the Arbitral Tribunal and the Arbitrator had rightly awarded interest @ 7.5% looking to the current rate of interest prevailing in the market. It was further stated that awarding of interest @ 7.5% did not fall within the ambit of Section 34 of the Act.
12.It was admitted by the respondent that petitioner was appointed as its authorized service centre for providing services to its customers and dealers in the district and cities mentioned in the agreement. The agreement provided that petition was under obligation to solve 90% of the calls/complaints within 24 hours of receiving the same and respondent no.1 had right to check randomly/ at regular intervals the functioning of the service centre including details of calls attended directly for the customers or by some other means. On 01.08.2005 respondent no.1 carried out an Arbitration No.20597/16 Page No.7 inspection at the petitioner's authorized service centre and found some discrepancies. Respondent no.1 requested the petitioner to improve the functioning of the service centre as customers and dealers were getting dissatisfied by improper operation of his service centre and same was causing loss to respondent no.1's products as well as brand image.
13.On 17.08.2005, respondent no.1 again visited the petitioner's premises and noticed various deficiencies. On 24.12.2005, respondent no.1 Executive again inspected the authorized service centre of petitioner and was surprised to note that despite repeated requests, petitioner had failed to improve the functioning of the service centre. During their visit, it was noticed that lot of customers and dealers's calls were pending, date of receipt was not mentioned on CSR, dealers stocks sets were pending and petitioner was also not cooperating with the audit team. On 27.12.2005 branch service manager of respondent no.1 visited the petitioner's premises but petitioner was absent without any intimation to respondent no.1. Branch manager also noticed several discrepancies including missing of the computers from the service center, absence of engineer and refusal to customers to provide service, missing stationery, ten defective units for which no action had been taken, store found locked and salary and conveyance of staff and engineer were also found unpaid since November 2005. On 02.01.2006 petitioner sent an email making false allegations against respondent no.1 stating that service engineers were forced to resign from the services of the petitioner. Said letter was duly replied by respondent no.1 on 03.01.2006 stating that engineers and staff members had resigned on account of non payment of salary. Petitioner was not providing adequate/prompt service to the respondent no.1. On 03.01.2006 respondent no.1 also reminded the petitioner about the various irregularities and deficiencies in the operation of Arbitration No.20597/16 Page No.8 the service centre. However, instead of improving the functioning of the service centre, petitioner issued a termination letter dated 07.01.2006 for termination of agreement dated 01.09.2002. On 12.01.2006 respondent no.1 accepted the termination of petitioner and duly informed him that the claim raised by the petitioner was not maintainable. Respondent no.1 requested the petitioner to submit the desired information/documents to carry out the full and final settlement. However, petitioner failed to provide the desired information and in view thereof on 02.03.2006, respondent no.1 again reminded the petitioner to send the same. On 30.04.2007 respondent no.1 again requested the petitioner to provide the supporting documents but he again failed to do so.
14.On 23.07.2007, respondent no.1 informed the petitioner that as per the agreement dated 01.09.2002 the accounts between the parties were required to be settled within 7 days. However, petitioner did not cooperate and claim was kept pending for more than one year. Petitioner was again informed for the requirement of submitting 'no dues certificate' from all the dealers in the territory of Ambala and Yamuna Nagar certifying that they had no claim against the petitioner. Respondent no.1 further informed the petitioner that after going through the claim sheet provided by him, they had bifurcated the claims which could be considered for payment subject to fulfillment of the requirement. On 24.10.2007 respondent no.1 again informed the petitioner that as per letter dated 23.07.2007, they had to fulfill certain requirements for settlement of the claim but the petitioner did not cooperate. The respondent no.1 also received numerous complaints from the dealers stating that the petitioner had picked up the products for repair and servicing and had failed to return the same to the rightful owner and the same was evident from annexure R-10. This also caused irreparable loss to brand Samsung.
Arbitration No.20597/16 Page No.915.The petitioner failed to submit the relevant documents in support of their claim and with malafide intent and in order to foist illegal claim on respondent no.1 invoked on 20.11.2007 the arbitration. Initially SH. D K Bhagotra was appointed as the Sole Arbitrator in terms of clause 32 of the agreement, however, later on he resigned from the company and thereafter, Sh. Sanjay Rai was appointed as the Sole Arbitrator. Petitioner participated in the proceedings without any objection and ld. Arbitrator fixed the proceedings with the consent of the parties. Ld. Arbitrator provided ample opportunities to both the parties to file their evidence but the petitioner failed to submit the documents. Both parties filed their respective evidence by way of affidavit and ld. Arbitrator fixed the matter for final hearing on 15.02.2010 and then on 14.05.2010 and 01.10.2010. There is nothing on record to show that petitioner filed any application seeking permission to file the additional documents and the same was declined by the Ld. Arbitrator.
16.It is a settled law that where the plea of bias was not raised as per Section 13 of the Act, such a plea could not be raised later on for challenge of award under Section 34 of the Act.
17.In reply on merits, it is submitted that the statement of claim submitted by the petitioner suffered from various discrepancies. It was admitted that respondent no.1 vide its letter dated 23.07.2007 accepted the claim of the petitioner to the extent of Rs.12,36,404.82 in full and final settlement against the claim of Rs.29,78,130.23. It was also admitted that account of the parties were required to be settled within seven days. On account of failure on the part of the petitioner in not submitting the requisite documents Arbitration No.20597/16 Page No.10 the claim of the petitioner was not processed. Respondent had denied all other allegations leveled by the petitioner.
18.Petitioners filed rejoinder to the reply of the respondents controverting the stand taken by them in their rejoinder and reiterated the facts of their petition.
19.The petitioner reiterated that arbitrator favoured the petitioner unnecessarily and had even rejected the admitted claims without any reasoning. The petitioner stated that the arbitrator had specifically refused to accept the documents submitted by the petitioner just to favour the company. Hence, the award was noway a reasoned one. The petitioner being a layman was not aware of the technicalities and procedure of law and taking benefit of his innocence of the petitioner the arbitrator passed the award in favour of the company. He denied all the averments made by the respondent in the reply.
20.The final arguments were addressed by both the parties and written arguments were also filed.
21.It has been argued by learned counsel for petitioner that the award under challenge was passed by the sole arbitrator which was biased as the arbitrator was Vice President of respondent no.1 company. He further argued that the agency between the petitioner and respondent no.1 was terminated and sum of Rs.29,78,130/- was due to be paid by respondent no.1 to the petitioner. A statement was submitted and certain documents were sought by the respondent from the petitioner which were duly submitted. The respondent no.1 did not remove the material in the shape of Arbitration No.20597/16 Page No.11 stock and other accessories after the lapse of more then 10 months after the termination due to which petitioner suffered huge losses and damages. The respondent no.1 vide letter dated 23.07.2007 accepted the claim of the petitioner to the extent of Rs.12,36,404.82/- as full and final settlement against the demanded claim.
22.The petitioner while refuting all the allegations of the respondent no.1 imposed an obligation upon respondent no.1 to settle all accounts within seven days of submission of claim. All the supporting documents were submitted by visiting the office of respondent no.1 i.e. handing over of the CSR Cards, Glowsin Boards and no dues from other ASC's and dealers.
23.Petitioner further argued that an executive of respondent no.1 visited the premises of the petitioner in the absence of the proprietor and took number of documents related to the claims for which a complaint was made to the local police. In fact, the respondent also raised an objection before the Arbitrator with respect to non submissions of documents. The learned counsel has argued while referring to the landmark judgment of Oil & Natural Gas Corporation Ltd Vs. SAW Pipes Ltd 2003(2) ALR-5 (Supreme Court) wherein it was laid down that if the award is de hors the provision of the act, it would be on the face of it illegal. The decision of the arbitrator must be within the bounds of its jurisdiction conferred under the Act or contract.
24.The arbitrator had not followed the mandatory procedure in the present case and had acted beyond jurisdiction, therefore, the award was patently illegal and therefore was bound to be set aside. The learned counsel for the petitioner argued that wherever it was held that the award was contrary to Arbitration No.20597/16 Page No.12 the substantive provision of law, the provisions of Arbitration and Conciliation Act or against the terms of agreement, it would be patently illegal and was opened to interference u/s 34(2) of the Act.
25.The arbitrator was required to be an unbiased person who was supposed to act impartially and independently as per section 28 of the act and wherever a doubt was raised about his independence, he was not supposed to act as an arbitrator. The learned counsel argued that the learned arbitrator must not only be impartial but also appear to be impartial. The learned counsel also laid reliance upon judgment titled Murlidhar Roongta & Ors Vs S. Jaggannath Tibrewala & Ors 2007 Arb.WLJ 330 (Bombay) wherein it was held that non disclosure of independence and impartiality by the arbitrator effects the award and such an award should be set aside. The arbitrator even did not adjudicate the issue relating to lifting of important and relevant documents from the premises of the petitioner. He only adjudicated the claims which were not disputed rather admitted by respondents prior to his appointment. Therefore, the award is liable to be set aside.
26.It was further submitted that the petitioner had already submitted all the relevant documents prior to invoking the arbitration clause. When the petitioner tried to tender more documents relating to the claim during evidence, respondent no.2 refused to take the said documents on record without assigning any reason and thus fair and proper opportunity was not provided to the petitioner to present and prosecute his claim. The learned counsel referred to the judgment of Hon'ble Supreme Court titled Upesh Kumar Vs State of Andhra Pradesh 2013(4) Civil Court Cases 296 (SC) wherein it was held that the arbitrator cannot refuse to take on record the documentary evidence even if obtained by illegal means particularly when Arbitration No.20597/16 Page No.13 the same are genuine and relevant and admissible. Even otherwise it was the duty of the arbitrator to get produced all the relevant and necessary documents to advance justice to the parties and since same was not done by the arbitrator, therefore, the award was liable to be set aside.
27.The award was also in contravention of section 24 of the Act wherein it is stated that each party must have reasonable opportunity to present evidence and sufficient notice of hearing should be given for inspection of documents, books and other properties.
28.The arbitrator failed to give any reason for rejecting the request of the petitioner to submit the documents which were very material and relevant for just and proper adjudication of the case. The arbitrator raised technical objection only to favour his employer and fair opportunity was not afforded to the petitioner in contravention of section 24 of the Act.
29.The respondent no.2 was required to adjudicate the claim while assigning the reasons in respect of each claim. The arbitrator has only awarded the claims which were awarded by the respondent no.1 and has not discussed the other claims of petitioner being not substantiated by proper documents. He has not taken into account the terms of the agreement and has only given conclusion without reason.
30.It was argued by learned counsel for petitioner that just recording of reasons in support of decision ensures that the decision is reached according to law and is not a result of whims and fancies. A party to the dispute is entitled to know the ground on which the authority has rejected the claim. It was held in the landmark judgment referred to by learned counsel for petitioner titled Arbitration No.20597/16 Page No.14 M/s Satjas Glorocks Pvt Ltd Vs BAC Ltd 2010 AWLJ 39 (CG) that a mere statement of reason does not satisfy the requirement of section 31(3) of the Act as the reasons must be based upon material submitted before the Arbitrator and as this test was not satisfied, therefore, the award should be set aside. Learned counsel has referred to the judgment of Hon'ble Supreme Court titled Som Dutt Builders Ltd Vs State of Kerala (2009) 10 SCC 259 wherein it has been held as under :-
"Concededly, the aforesaid two documents are referred to by the arbitral tribunal in the award and arbitral tribunal has also noticed the arguments advanced on behalf of the parties in support of their respective stand but reasons are not at all discernible in support of its finding that the period of completion was extended by the respondent for 18 months due to reasons not attributable to the contractor. Having perused the award carefully, we have not been able to find reasons in support of claim no. 1. The position is no better in respect of award for claim no. 4B. As a matter of fact, no reason whatsoever has been assigned for awarding that claim"
Learned counsel has also referred to the judgment titled State of Goa Vs Praveen Enterprises (2012) 12 SCC 581 wherein it has been held that "Section 23 of the Act makes it clear that when the arbitrator is appointed, the claimant is required to file the statement and the respondent has to file his defence statement before the Arbitrator. The claimant is not bound to restrict his statement of claim to the claims already raised by him by notice, "unless the parties have otherwise agreed as to the required elements" of such claim statement. It is also made clear that "unless otherwise agreed by the parties" the claimant can also subsequently amend or supplement the claims in the claim statement. That is, unless the arbitration agreement requires the Arbitrator to decide only the specifically referred disputes, the claimant can while filing the statement of claim or thereafter, amend or add Arbitration No.20597/16 Page No.15 to the claims already made".
"Where however the arbitration agreement requires specific disputes to be referred to arbitration and provides that the arbitrator will have the jurisdiction to decide only the disputes so referred, the arbitrator's jurisdiction is controlled by the specific reference and he cannot travel beyond the reference, nor entertain any additional claims or counter claims which are not part of the disputes specifically referred to arbitration".
Learned counsel has further referred to the judgment of Hon'ble Supreme Court in case titled I Pay Clearing Service Pvt Ltd Vs ICICI Bank Ltd (2022) 3 SCC 121 wherein it has been held that "the award of the learned Arbitrator was mainly questioned on the ground that it suffers from patent illegality, inasmuch as there is no finding recorded in the award to show that the respondent-ICICI Bank has illegally and abruptly terminated the contract".
"In our view, Section 34(4) of the Act, can be resorted to record reasons on the finding already given in the award or to fill up the gaps in the [email protected].(C)No.24278 of 2019 reasoning of the award. There is a difference between 'finding' and 'reasons' as pointed out by the learned senior counsel appearing for the respondent in the judgment in the case of Income Tax Officer, A Ward, Sitapur v. Murlidhar Bhagwan Das6. It is clear from the aforesaid judgment that 'finding is a decision on an issue'. Further, in the judgment in the case of J. Ashoka v. University of Agricultural Sciences and Ors.7, this Court has held that 'reasons are the links between the materials on which certain conclusions are based and the actual conclusions'. In absence of any finding on point no.1, as pleaded by the respondent and further, it is their case that relevant material produced before the Arbitrator to prove 'accord and satisfaction' between the parties, is not considered, and the same amounts to patent illegality, such aspects are to be Arbitration No.20597/16 Page No.16 considered by the Court itself. It cannot be said that it is a case where additional reasons are to be given or gaps in the reasoning, in absence of a finding on point no.1 viz. "whether the contract was illegally and abruptly terminated by the respondent?"
"21. Further, Section 34(4) of the Act itself makes it clear that it is the discretion vested with the Court for remitting the matter to Arbitral Tribunal to give an opportunity to resume the proceedings or not. The words (2017) 2 SCC 609 [email protected].(C)No.24278 of 2019 "where it is appropriate" itself indicate that it is the discretion to be exercised by the Court, to remit the matter when requested by a party. When application is filed under Section 34(4) of the Act, the same is to be considered keeping in mind the grounds raised in the application under Section 34(1) of the Act by the party, who has questioned the award of the Arbitral Tribunal and the grounds raised in the application filed under Section 34(4) of the Act and the reply thereto".
"Under guise of additional reasons and filling up the gaps in the reasoning, no award can be remitted to the Arbitrator, where there are no findings on the contentious issues in the award. If there are no findings on the contentious issues in the award or if any findings are recorded ignoring the material evidence on record, the same are acceptable grounds for setting aside the award itself. Under guise of either additional reasons or filling up the gaps in the reasoning, the power conferred on the Court cannot [email protected].(C)No.24278 of 2019 be relegated to the Arbitrator. In absence of any finding on contentious issue, no amount of reasons can cure the defect in the award".
31.As the award did not state the reason, it was against the mandate of section 31(3) of the Act and hence should be set aside.
Arbitration No.20597/16 Page No.1732.Arguments were also addressed by learned counsel for respondent. He stated that the award was being challenged due to apparent violation of public policy and principles of natural justice. The respondent submitted that the petitioner has misled the court and the petition is not maintainable under section 34 of the Arbitration & Conciliation Act. Respondent no.1 submitted that he had appointed the petitioner as its authorised service centre and used to check randomly and at regular intervals the functioning of the service centre including the details of the calls attended or service rendered by some other means. On 01.08.2005 when an inspection was carried out several discrepancies were noted, the petitioner was asked to improve the functioning of the service centre as the dissatisfaction of the customers was causing loss to the respondent no.1 and its brand image. Thereafter, respondent no.1 visited the service centre on various occasions and deficiencies were again noted in the functioning of the service centre. Instead of making amends, the petitioner terminated the agreement dated 01.09.2002.
33.Petitioner failed to submit the documents in support of its claim in order to take illegal claim from respondent no.1. Petitioner participated in proceedings before the Ld. Arbitrator and despite ample opportunities provided to both the parties to lead evidence, the petitioner failed to submit the relevant documents supporting his case. There is nothing on record to show that any application was moved seeking permission to file additional documents and the same was declined by the Arbitrator.
34.Ld. Arbitrator passed the award for Rs.960142.46 alongwith simple interest @ 7.5% per annum in favour of the petitioner and the petitioner filed the Arbitration No.20597/16 Page No.18 petition on the ground that (i) the Abitrator failed to assign any reasons for rejecting the request of the petitioner to submit the documents which were very material and relevant; (ii) Ld. Arbitrator failed to assign a reason for lower rate of interest.
35.It is argued that the scope of review of an award under Section 34 of the Act and the award passed by an Arbitrator cannot be challenged except on the grounds specified in Section 34 of the Act. Petitioner has not mentioned any ground specified under Section 34 of the Act. It is further submitted that Section 34 of the Act makes it clear that an arbitral award can be set aside only on the grounds mentioned under 34 (2) & (3) and not otherwise. The merits of the award can only be assailed if it is in conflict with policy of India.
36.It is further argued that there is nothing to suggest that the view taken by the Learned Arbitrator is opposed to public policy and contrary to the substantive provisions of law. Rather the view taken by the arbitrator is based on material facts produced before him and there is no justification for interfering with the arbitral award. Learned arbitrator had given his reasons on the basis of documents filed by the parties and as per the settled provisions and precedents, the present court cannot sit in appeal over findings of fact. This court cannot appraise the evidence as it was for the arbitrator to decide the quality and quantity of the evidence. The decision of the Arbitrator is final and subject to scrutiny only under Section 32 of the Act. Learned counsel referred to the landmark judgment of ONGC Vs SAW Pipes passed by hon'ble Supreme Court which has categorically laid down the grounds on which the award can be set aside.
Arbitration No.20597/16 Page No.1937.Learned counsel has also referred to the judgment of hon'ble Supreme Court titled Bharat Coking Coal Ltd Vs Annapurna Constructions AIR (2003) SC 3660 wherein it was held that the role of the arbitrator is to arbitrate within the terms of contracts and if he acts in accordance with the terms and conditions, his decision cannot be set aside. It is only when he travels beyond the contract, the award passed by him can be questioned in an appropriate court.
38.Learned counsel for respondent has also drawn the attention of the court to the judgment of Union of India Vs Rallia Ram (1964) 3 SCR 164 passed by hon'ble Supreme Court wherein it was decided that the arbitrator whether a lawyer or laymen chose by the parties and interested with power to decide a dispute is not ordinary liable to be challenged on the ground that it is erroneous. The court is also interested with power to modify or correct the order in case of imperfect form, clerical errors, decision on questions not referred to or if some matters are left undetermined or when the award is indefinite and objection to the legality is apparent on the face of the award. It may also be set aside due to corruption or misconduct of the arbitrator or if there has been fraudulent concealment of willful deception. The civil court however cannot exercise appellate power over the decision. Wrong or right, the decision is binding if it has been reached fairly after giving adequate opportunities to the parties to place their grievances in the manner provided by the agreement.
39.It is further submitted that the award is reasoned and detailed which had not left any fact or issue undetermined. Hence, petitioner's claim is liable to be rejected.
Arbitration No.20597/16 Page No.2040.After hearing the arguments of both the parties, the Court has come to the following findings:-
The main grievance of the petitioner is that :-
(I) The Arbitrator has not acted independently and impartially but has conducted the arbitration as Vide President of respondent no.1.
(II) The liability was never denied by respondent no.1 but no adjudication was done with respect to the same, the claims have been rejected without looking into the controversy.
(III) The documents sought to be produced by the petitioner were denied when the case was fixed for leading evidence without assigning any reasons.
41.The arbitral record has been perused and court has also perused the claim and the reply and the rejoinder filed by the parties. It is a settled law that the award can only be set aside under section 34(2) in the following situation :-
The landmark judgment of ONGC Vs Saw Pipes and Delhi Airport Metro Express Pvt Ltd Vs DMRC Ltd (2022) 1 SCC 131 wherein it has been held that while deciding applications filed under Section 34 of the Act, courts are mandated to strictly act in accordance with and within the confines of Section 34, refraining from appreciation or re-appreciation of matters of fact as well as law. Similarly has been held in Uttarakhand Purv Sainik Kalyan Nigam Limited. v. Northern Coal Field Limited. 2, Bhaven Construction Through Authorised Signatory Premjibhai K. Shah v. Executive Engineer Sardar Sarovar Narmada Nigam Ltd. and Another3 and Rashtriya Ispat Nigam Limited v. Dewan Chand Ram Saran4).
The amended Section 34 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 Arbitration No.20597/16 Page No.21 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
(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, Arbitration No.20597/16 Page No.22
(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 policy of Indian law shall not entail a review on the merits of the dispute.
(2-A) 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."
42.In the present petition, the ground stated do not cover the specific ground laid down in section 34(2) under which an arbitral award can be set aside.
43.The court also relies upon the judgment of Hon'ble Supreme Court titled as SMCC-SCC-PVCC JV Vs Rail Vikas Nigam Ltd (2013) SCC Online Del 205 wherein it was held that merely saying that an award is against public policy is not enough and the petitioner has to make a strong case within four corners of the provision.
44.Further, the scope of section 34 (2) was extremely limited and none of the grounds raised by the petitioner fall within the enumerated category. It has been so held in the judgment of PSA Sical Terminals (P) Vs Board of Trusties (2021) SCC Online 508 and Indian Oil Corporation Vs Shri Ganesh Petroleum (2002) 4 SCC 463.
Arbitration No.20597/16 Page No.2345.Similar proposition has been held in the landmark judgment of Delhi Airport Metro Express Pvt Ltd Vs DMRC Ltd (2022) 1 SCC 131 that "there is a disturbing tendency of courts setting aside arbitral awards, after dissecting and reassessing factual aspects of the cases to come to a conclusion that the award needs intervention and thereafter, dubbing the award to be vitiated by either perversity or patent illegality, apart from the other grounds available for annulment of the award. This approach would lead to corrosion of the object of the 1996 Act and the 28 endeavours made to preserve this object, which is minimal judicial interference with arbitral awards".
46.The landmark judgment of Ssanyong Engineering Vs NHAI (2019) 15 SCC 131 states that "construction of the terms of contract is primarily for an arbitrator to decide i.e. Arbitrator makes his decision in such a manner that no fair minded or reasonable person would and the arbitrator view is not even a possible view to take.
47.It has been held in judgment of NHAI Vs M. Hakeem that the court cannot act as an appellate court to examine the legality of an award. Section 34 provides only for setting aside awards on limited grounds and such grounds are contained in sub section 2 and 3 of Section 34. The court even examines the merits of claim by entering in factual arena or re-appreciate evidence merely because arbitaral tribunal has made errors when dealing with it. It was also held in the above mentioned judgments cumulatively that contravention of substantive law cannot be a ground to set aside an arbitral award.
Arbitration No.20597/16 Page No.2448.In the same judgment Hon'ble Supreme Court has held that "what is important to note is that, far from Section 34 being in the nature of an appellate provision, it provides only for setting aside awards on very limited grounds, such grounds being contained in sub-sections (2) and (3) of Section 34. Secondly, as the marginal note of Section 34 indicates, "recourse" to a court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-sections (2) and (3)".
49. It is settled law that a Section 34 proceeding does not contain any challenge on the merits of the award. This has been decided in MMTC Ltd. v. Vedanta Ltd., (2019) 4 SCC 163, at 167 as follows:
As far as interference with an order made under Section 34, as per Section 37, is concerned, it cannot be disputed that such interference under Section 37 cannot travel beyond the restrictions laid down under Section 34. In other words, the court cannot undertake an independent assessment of the merits of the award, and must only ascertain that the exercise of power by the court under Section 34 has not exceeded the scope of the provision. Thus, it is evident that in case an arbitral award has been confirmed by the court under Section 34 and by the court in an appeal under Section 37, this Court must be extremely cautious and slow to disturb such concurrent findings.
To state that the judicial trend appears to favour an interpretation that would read into Section 34 a power to modify, revise or vary the award would be to ignore the previous law contained in the 1940 Act; as also to ignore the fact that the 1996 Act was enacted based on the UNCITRAL Model Law on International Commercial Arbitration, 1985 which, as has been pointed out in Redfern and Hunter on International Arbitration, makes Arbitration No.20597/16 Page No.25 it clear that, given the limited judicial interference on extremely limited grounds not dealing with the merits of an award, the 'limited remedy' under Section 34 co- terminus with the 'limited right', namely, either to set aside an award or remand the matter under the circumstances mentioned in Section 34 the Arbitration Act, 1996.
50.As far as the arguments of the petitioner that his documents were not permitted to be brought on record is concerned, this court is of the opinion that parties were provided ample opportunities to file their respective evidence, whereas the petitioner had failed to produce the documents to substantiate his claim despite opportunities. No objection was taken by the petitioner before the ld. Arbitrator that he was not being permitted to file the additional documents. In fact the date of final arguments was fixed with the consent of both the parties. There is nothing on record to show that any application was moved seeking permission to file additional documents and the same was declined by the Arbitrator.
51.As far as the grievance of the petitioner with respect to the independence and impartiality of the arbitrator is concerned, the petitioner cannot take the ground that the arbitrator being the Vide President of the respondent no.1 was biased as the agreement dated 01.09.2022 was duly signed by both the parties and clause 32 of the said agreement stipulated as under
"all disputes between the parties arising out of this agreement or any matter incidental thereto shall be referred to arbitration of the Vice President of M/s Samsung India Electronics Ltd whose decision shall be final and binding on both the parties hereto. Such arbitration shall be held at New Delhi and the courts at Delhi alone shall have the jurisdiction to deal with the arbitration proceedings and the awards in accordance with law".Arbitration No.20597/16 Page No.26
Hence, the petitioner cannot at this stage raise the ground that the arbitrator appointed being the Vice President of respondent no.1 had acted with bias as it had been decided prior in time that the Vice President of respondent no.1 would be the arbitrator in case of any dispute.
52.It has been held by Hon'ble Supreme Court in case titled Dyna Technologies Pvt Limited Vs Crompton Greaves Limited (2019) 20 Supreme Court Cases 1 that "the mandate under section 31(3) of the Arbitration Act is to have reasoning which is intelligible and adequate and, which can in appropriate cases be even implied by the Courts from a fair reading of the award the documents referred to thereunder, if the need be". "When we consider the requirement of a reasoned order, three characteristics of a reasoned order can be fathomed. They are : proper, intelligible and adequate. If the reasoning in the order are improper, they reveal a flaw in the decision making process. If the challenge to an award is based on impropriety or perversity in the reasoning, then it can be challenged strictly on the grounds provided under Section 34 of the Arbitration Act. If the challenge to an award is based on the ground that the same is unintelligible, the same would be equivalent of providing no reasons at all. Coming to the last aspect concerning the challenge on adequacy of reasons, the Court while exercising jurisdiction under section 34 has to adjudicate the validity of such an award based on the degree of particularity of reasoning required having regard to the nature of issues falling for consideration. The degree of particularity cannot be stated in a precise manner as the same would depend on the complexity of the issue.
53.It has been further held in Ircon International Ltd Vs Afcons Infrastructure Ltd by Hon'ble Delhi High Court in OMP (Commercial) 279/2019 that the Arbitration No.20597/16 Page No.27 scope of examination under Section 34(2-A) of the A&C Act is limited. This Court is not required to revaluate and reappreciate the evidence and supplant its opinion over that of the Arbitral Tribunal. Unless the decision is found to be patently illegal, no interference with the Arbitral Award is called for. In Delhi Airport Metro Express (P) Ltd. v. Delhi Metro Rail Corpn. Ltd. [Delhi Airport Metro Express (P) Ltd. v. Delhi Metro Rail Corpn. Ltd., (2022) 1 SCC 131 : (2022) 1 SCC (Civ) 330] , Supreme Court had authoritatively explained that even an erroneous view would Signature Not Verified Digitally Signed By:DAMINI YADAV Signing Date:26.04.2023 19:14:42 NEUTRAL CITATION NO. 2023:DHC:2816 not vitiate the Arbitral award on the ground of patently illegality unless the error is manifest and one that strikes at the root of the matter. It is trite law that an Arbitral Tribunal is a final adjudicator of the evidence and its conclusion cannot be interfered with except where it is found to be patently illegal or in conflict with the public policy of India. In Dyna Technologies (P) Ltd. v. Crompton Greaves Ltd. [Dyna Technologies (P) Ltd. v. Crompton Greaves Ltd., (2019) 20 SCC 1] , the Supreme Court had held that courts would not interfere merely because an alternative view on facts exists. Similarly, in Associate Builders v. DDA [Associate Builders v. DDA, (2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204] , the Supreme Court had observed that "a possible view by the Arbitrator on facts has necessarily to pass muster as the Arbitrator is the ultimate master of the quantity and quality of evidence to be relied upon when he delivers his Arbitral award"."
In view of the aforementioned judgment, it is evident that the Arbitrator, being the ultimate master of the Arbitration, can adjudicate the claims in a manner that is on the lines of basic tenants of Law and the Principles of Natural Justice and Jurisprudence. As long as the Award does not shock the conscience of the Court, it warrants no interference of the Arbitration No.20597/16 Page No.28 Court.
The law which has been settled by the Hon‟ble Supreme Court is that the scope of interference with an Arbitral Award under Section 34 of the Act, 1996 is fairly limited and narrow. The Courts shall not sit in an appeal while adjudicating a challenge to an Award which is passed by an Arbitrator, the master of evidence, after due consideration of facts, circumstances, evidence, and material before him.
54.This Court has also taken assistance from the judgment of Fiza Developers and Inter Trade Pvt. Ltd. Vs. AMCI (India) Pvt. Ltd., and Ors (2009) 17 SCC 796, wherein it was held that the petitioner cannot call for intervention of the Hon'ble Court in the merits and factual aspects of the dispute which have been exhaustedly examined by the Arbitrator consequent to which the Arbitrator had given conclusive, fair and reasonable findings in favour of the respondent. It was further held that " the scope of inquiry in a proceedings u/s. 34 is restricted to consideration where any of the grounds mentioned in section 34 (2) exist for setting aside the judgment. The grounds for setting aside the award are specific. Section 34(2) also clearly places the burden of proof on the person who make the application".
55.The similar view has also been laid down by the Honble High Court of Delhi in Ravi Builders Vs. Union of India, in OMP No.308/2009, decided on 03.11.2009. It is absolutely clear that this Hon'ble Court cannot sit over the award and examine it as an Appellate court and whether this court would desist itself from substituting its opinion, if at all it has a difference one, over the reasoning of the Arbitrator.
56.In the case of M/s Woodfun Vs. National Thermal Power Corporation Ltd-
Arbitration No.20597/16 Page No.29in OMP No. 257/2009 - decided on 25.8.2009, the Hon'ble High Court of Delhi has observed that - " 3. It is settled law that while considering objections under Section 34 of the Arbitration & Conciliation Act, 1996 the Court does not act as a Court of Appeal and cannot rewrite an award after re-appreciating the evidence produced before the Arbitrator. The Arbitrator is appointed by the consent of the parties. He is a judge chose by the parties, his decision is final and binding on the parties and the award can be set aside only if the petitioner is able to make out a case under Section 34 of the Arbitration and Conciliation Act 1996 which read 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 settling aside such award in accordance with sub section (2) and sub section (3) ............." "4. The Arbitrator is a sole judge of the quantity and quality of the evidence and whether a fact has been proved or not proved. This court cannot look into the evidence produced before the learned Arbitrtor in order to arrive at a conclusion whether the evidence was sufficient / insufficient, relevant / irrelevant , properly appreciated / not appreciated. The petitioner has failed to make out a case under any of the grounds as stated under section 34 of the Arbitration and Conciliation Act 1996."
57.It is also held that the court cannot correct error of the arbitrator if so committed. The scheme of the act and specifically Section 34 aim at and keeping the supervisory role of the court at a minimum level justifying the same as the parties to the agreement have made a conscious decision to exclude the courts jurisdiction by opting for arbitration for expeditious finality. It is observed that simply because there can be another possible opinion cannot by itself be a ground for this court to set aside the Award under Section 34 of the Act. That was also the view taken by the Delhi High Arbitration No.20597/16 Page No.30 Court in Gurdeep Kaur vs. C.K.Bediand Anr. 2008 (4) RAJ 448 (Delhi), wherein the Hon;ble High has reaffirmed the well celebrated concept that under Section 34 of the Act, the Court cannot sit in appeal over the award unless there is a jurisdictional error, illegality or perversity. It was also held in that case that possibility of two views cannot be a ground to decide that there is an error apparent on the face of the award.
58.In the case of K. V. Mohammed Zakir Vs. Regional Sports Centre (2009) 9 SCC 357, it was held ; "5. We are of the view that the settled position in law is that the court should not substitute its own view for the view taken by the arbitrator while dealing with the proceedings for setting aside an award. 6. It is equally well settled, where the arbitrator acts within jurisdiction, " the reasonableness of the reasons" given by the arbitrator is not open to scrutiny by courts ....". the similar view was also laid down by the Hon'ble High Court of Delhi in K.C.Sharma Vs. Delhi Development Authority 131 (2006) DLT 466.
59.Going to the five grounds taken by the petitioner in his objections, in so far as ground (i) is concerned, the court has discussed in detail in para 50 of the judgment and the said point has also been argued by learned counsel for respondent no.1 while referring to the judgment of Hon'ble Supreme Court titled Union of India Vs Rallia Ram (1964) 3 SCR 164 .
"An award being a decision of an arbitrator whether a lawyer or a layman chosen by the parties, and entrusted with power to decide a dispute submitted to him is ordinarily not liable to be challenged on the ground that it is erroneous. In order to make arbitration effective and the awards enforceable, machinery is devised for lending the assistance of the ordinary courts. The Court is also entrusted with power to modify or correct the Arbitration No.20597/16 Page No.31 award on the ground of imperfect form or clerical errors, or decision on questions not referred, which are severable from those referred. The Court has also power to remit the award when it has left some matters referred undetermined, or when the award is indefinite, where the objection to the legality of the award is apparent on the face of the award. The Court may also set aside an award on the ground of corruption or misconduct of the arbitrator, or that a party has been guilty of fraudulent concealment or willful deception. But the. Court cannot interfere with the award if otherwise proper on the ground that the decision appears to it to be erroneous. The award of the arbitrator is ordinarily final and conclusive, unless a contrary intention is disclosed by the agreement".
60.Hence, the first objection does not hold any merit and the court does not intend to interfere with the appointment or decision of the arbitrator.
61.As far as objection (ii), (iii), (iv) and (v) are concerned, it has been held in catena of judgments that Section 34 petition deserves to be allowed in case the grounds as mentioned in the Section 34 are fulfilled. It has been held in Associate Builders Vs. Delhi Development Authority, AIR 2015 SC 620 that:
"It will be seen that none of the grounds contained in sub- clause 2 (a) deal with the merits of the decision rendered by an arbitral award. It is only when we come to the award being in conflict with the public policy of India that the merits of an arbitral award are to be looked into under certain specified circumstances.
Reliance is being placed on Jitender Rajpal vs. Ansal Properties & Infrastructure Ltd. (OS) (COMM) 28/19 decided on 13.02.2019 wherein it has been held that "It is apparent, therefore, that, while interference by Arbitration No.20597/16 Page No.32 court, with arbitral awards, is limited and circumscribed, an award which is patently illegal, on account of it being injudicious, contrary to the law settled by the Supreme Court, or vitiated by an apparently untenable interpretation of the terms of the contract, requires to be eviscerated. In view thereof, the decision of the ld. Single Judge that reasoning of the arbitral award in this regard was based on no material and was contrary to the contract, cannot be said to be deserving of any interference at our hands under Section 37 of the Act. In a pronouncement reported at MANU/DE/0459/2015, MTNL v. Fujitshu India Pvt. Ltd. (FAO(OS) No.63/2015), the Division Bench of this court has held that "an appeal under Section 37 is like a second appeal, the first appeal being to the court by way of objections under Section 34". Being in the nature of a second appeal, this court would be hesitant to interfere, with the decision of the learned Single Judge, unless it is shown to be palpably erroneous on facts or in law, or manifestly perverse."
62.The same objections are also with respect to the appreciation of evidence by the Ld. Arbitrator. It has been held in catena of judgments that once the Arbitrator has returned a finding after appreciation of evidence, the court cannot sit in appeal against the said order and re-appreciate the evidence or discern it afresh. Perusal of Arbitral record would show that the Ld. Arbitrator had discussed each claim of the claimant minutely and after discerning the evidence led by both the parties and has decided the claims. There is no error apparent in the finding returned by the Arbitrator.
63. Reliance is being place on Sumitomo Heavy Industries Ltd vs ONGC Ltd (2010) 11 SCC 296:
43........The umpire has considered the fact situation and placed a Arbitration No.20597/16 Page No.33 construction on the clauses of the agreement which according to him was the correct one. One may at the highest say that one would have preferred another construction of Clause 17.3 but that cannot make the award in any way perverse. Nor can one substitute one's own view in such a situation, in place of the one taken by the umpire, which would amount to sitting in appeal. As held by this Court in Kwality Mfg. Corpn. v. Central Warehousing Corpn. (2009) 5 SCC 142 the Court while considering challenge to arbitral award does not sit in appeal over the findings and decision of the arbitrator, which is what the High Court has practically done in this matter. The umpire is legitimately 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 agreement. If he does so, the decision of the umpire has to be accepted as final and binding."
64.It is therefore a settled law that unless the award is against the public policy or is covered by other grounds as mentioned in Section 34 of the Act the findings of the Ld. Arbitrator cannot be reversed. The petitioner has simply stated that the award was passed without considering the documents and that the same was passed by an Arbitrator who was not independent and partial without explaining or bringing on record any fact as to how the arbitrator acted biasedly.
65.The main focus of the parties is with respect to arbitrator acted arbitrarily without collecting any evidence and simply on assumptions and presumptions. However, this court is of the opinion that as the evidence cannot be tested, the present Court cannot interfere with the findings of the arbitrator unless it is covered under clause of Section 34(2).
Arbitration No.20597/16 Page No.3466.The grounds raised by the petitioner do not disclose as to how the award is perverse or against public policy. The reasoning given by the Ld. Arbitrator while deciding each claim cannot be faulted as he has declined the claims of the claimant were not made out. In case the evidence led by the parties was not discerned by the Ld. Arbitrator, he would have out-rightly allowed all the claims of the claimant but that is not the case.
67.It has been held in various judgments that in case in two views are available and one adopted by the Ld. Arbitrator the same cannot be reversed only because the court prefers the other view. It is once again reiterated for the sake of repetition that the award given by the Arbitrator is a reasoned award drawn after discerning the entire evidence led by both the parties.
68.In view of the aforesaid discussions none of the grounds raised by the petitioner qualify the conditions mentioned in the sub clause (ii) of Section 34 of Arbitration & Conciliation Act, 1996 for which the award of Ld. Arbitrator can be interfered with. Since none of the conditions are satisfied, accordingly objections raised by the petitioner through this petition under Section 34 of Arbitration & Conciliation Act 1996 stand dismissed.
File be consigned to Record Room. Digitally signed
by PURVA
PURVA SAREEN
SAREEN Date:
2024.07.26
14:22:55 +0530
Announced in open court (Purva Sareen)
On 24th July 2024 District Judge-01, South,
Saket Courts/New Delhi
Arbitration No.20597/16 Page No.35