Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | Arbitration and Conciliation Act 1996 |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Allowed |
Headnote | Arbitration and Conciliation Act, 1996 - Section 34 - Contractual dispute - Issue with regard to computation of rates for repair and maintenance expenses of respondent's offshore vessels chartered to appellant - Reference to arbitrator - Arbitration Award - Interference with - Held: No proposition that Courts would be slow to interfere with arbitrator's award even if the conclusions of arbitrator are perverse, and even when the very basis of arbitrator's award is wrong - On facts, norms prescribed by arbitrator for mode of calculation as upheld by High Court, not appropriate - Thus, interference under Article 136 called for and norms by Arbitrator set aside - Constitution of India, 1950 - Article 136.Appellant required offshore vessels (OSV) for supplying material from its onshore bases to its offshore installations. Respondent and shipping Corporation of India acquired offshore vessels to charter them to the appellant. Appellant took on charter, the OSV of respondent and the next year, the OSV of SCL Contract was entered for first five years. It was extended by another five years. Charter was further extended by six years. Dispute arose between appellant and the respondent and others with regard to computation of the rates for repair and maintenance of offshore vessels for 11 to 16 years of their operation. The Committee submitted report with regard to a suitable formula for the charter rate for the further extended period. Government of India accepted the recommendations of the Committee partially. Indian Shipping Companies and respondent made representations. Thereafter, Government of India appointed a High Level Working Group which gave its recommendations. The dispute was referred to the arbitrator. Arbitrator held the Committee did not recommend that irrespective of the period of induction, years should be calculated as that of SCI; that the respondent did not question the recommendations of High Level Working Group and Committee's Report but merely contended that the mode of implementation thereof was incorrect; that it was not open for him to go behind the report and the only area of enquiry was whether or not the report was correctly implemented; that neither of the Committees examined whether the entitlement of each OSV was to be determined with reference to the years of actual user or only with reference to the calendar years; that for the computation of repairs and maintenance expenses, it was necessary to take into consideration the years of operation and not the calendar years; that the 12th year of operation of SCl's OSVs should be equated with the 13th year of operation of respondent's OSV s and so on; and that tile interpretation suggested by appellant would lead to great injustice.Appellant filed appeal under section 34 of the Arbitration and Conciliation Act, 1996 challenging the award. Single Judge of High Court dismissed the appeal. Aggrieved, appellant filed appeal. Division Bench of High Court dismissed the same holding that the arbitrator had considered and construed the reports while arriving at his conclusions; that the basis of the calculation adopted by the arbitrator was not only logical but just and fair; that the provisions of the said reports called for a proper interpretation and construction before being applied to the facts of the case and the arbitrator did so; that even if the mode of calculation as applied by the arbitrator is not very appropriate in its effect, that could not be a ground for exercise of power under s. 34; that the reference did not include the 13th to 16th year to inspect; and that the arbitrator thought it improper to open the same and that a narrow technical reading of the Award cannot be made. Hence the present appeal.Appellant contended that the courts below failed to notice that the Award made by the Arbitrator was beyond the reference made; that the arbitrator's view that the corresponding year could be a more appropriate factor is Without foundation; that the Bench mark of SCI in a particular year could not be departed from; that there was no scope for shifting of figures; that the normative figure for third period remained constant; and that though in the Writ Petition there was 'challenge to the period 13 to 16 years, a bare reading of the writ petition shows.that it did not relate to the said period.Respondent contended that as two views are possible, High Court's view should not have been interfered; that arbitrator had accepted one view which is possible and was not de hors the Committee's report; and that interference under Article 136 of the Constitution was not called for as substantive justice had been done; even though the order may be wrong on some parts. |
Judge | Hon'ble Dr. Justice Arijit Pasayat |
Neutral Citation | 2007 INSC 1153 |
Petitioner | Ongc Ltd. |
Respondent | Garware Shipping Corpn. Ltd. |
SCR | [2007] 11 S.C.R. 1154 |
Judgement Date | 2007-11-14 |
Case Number | 5210 |
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