2017 (2) TMI 1425 - HC - Indian Laws

Validity of Arbitral Award - date of limitation - HELD THAT - The onus to prove that there were any hindrances caused by JSPL on account of which GNCL was prevented from performing its obligations, was on the petitioners. The averments made by petitioners in its suit filed in the Calcutta High Court could not be accepted without GNCL establishing the same. Clearly, JSPL s claim could not be rejected on the basis of averments made by the petitioners in another proceeding without the petitioners proving the same. The court had found that the arbitrator had passed an award without assigning any reason and without even recording a finding that the respondent therein had suffered a loss - In the present case, a plain reading of the impugned award would indicate that the arbitrator has discussed the pleadings, the evidence led and thereafter made the award indicating detailed reasons for the sums awarded. The present petition is dismissed on account of delay as well as on merits.

Summary

Issues Involved:
1. Delay in re-filing the petition.
2. Merits of the arbitral award.

Detailed Analysis:

1. Delay in Re-filing the Petition:
The petitioners filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996, challenging the arbitral award dated 16.08.2016. The petition was initially filed on 30.11.2016, the last date of limitation, but was not accompanied by a certified copy of the award. It had several defects and was returned multiple times, with the final re-filing occurring on 23.01.2017, exceeding the 120-day period prescribed under Section 34(3) of the Act. The petitioners sought to explain the delay due to vacations, non-availability of the authorized representative, documents, and pending litigations, but these grounds were found unpersuasive. The court emphasized the need for a strict approach to condonation of delay, as established in Delhi Development Authority v. M/s Durga Construction Co. Consequently, the application for condonation of delay (IA 1333/2017) was dismissed.

2. Merits of the Arbitral Award:
Despite dismissing the delay, the court examined the merits of the case. The disputes arose from a Coal Purchase Agreement (CPA) and an amended CPA between the petitioners and the respondent, involving the supply of coal and advance payments. The petitioners failed to fulfill their obligations under the CPA, leading the respondent to seek a refund of the advance payments, interest, and liquidated damages. The arbitrator, after considering the evidence and despite the petitioners' non-participation, awarded the respondent ?36,89,15,520 as the balance unadjusted advance, 16% interest, and damages based on the difference between the base price and market price of coal.

The petitioners contended that the award was perverse and argued that the arbitrator ignored their claims of hindrances caused by the respondent, preventing them from performing the CPA. However, the court found these contentions without merit, noting that the petitioners had accepted the advances and failed to supply the coal. The arbitrator's discretion to award interest and damages was upheld, as the respondent provided evidence of purchasing coal at a higher market price. The petitioners' failure to participate in the arbitration and challenge the evidence led by the respondent further weakened their case.

The court also rejected the petitioners' reliance on State of Uttar Pradesh v. Combined Chemicals Company Private Limited, distinguishing it from the present case where the arbitrator provided detailed reasons for the award. The court concluded that the award was well-reasoned, based on evidence, and not contrary to public policy. The petitioners' claims of hindrances were unsubstantiated, and their non-participation in arbitration precluded them from challenging the award effectively.

Conclusion:
The court dismissed the petition both on account of delay and on merits, finding no merit in the petitioners' contentions and upholding the arbitral award.