2023 (12) TMI 1335 - HC - Indian Laws

Scope of jurisdiction exercised by this Court under Section 37(2)(b) of the Arbitration Act - true purport and nature of the Term Sheet, based upon interpretation of its various clauses - HELD THAT - Section 37 of the Arbitration Act, pertains to appealable orders and it provides for filing of an appeal before the Court, inter alia, to challenge an order granting or refusing interim measure under Section 17 of the Arbitration Act. In the very same provision under Section 37 (1)(c) of the Arbitration Act, an appeal can be filed against an order setting aside or refusing to set aside an arbitral award under Section 34 of the Arbitration Act. So long as the learned Arbitrator has considered the relevant material and a plausible view has been adopted in the facts and circumstances of the case, this Court would be loathe to interfere with the order passed by the learned Arbitrator. This Court would not interfere with the order of the learned Arbitrator passed under Section 17 of the Arbitration Act, merely because another view is possible in the matter. The discretion exercised by the learned Arbitrator, based upon a plausible view and upon taking into consideration all relevant material, cannot be lightly interfered with by this Court exercising jurisdiction under Section 37(2)(b) of the Arbitration Act - This Court intends to consider the impugned order passed by the learned Arbitrator in this backdrop and based upon the material available on record, in the light of the rival submissions made on behalf of the parties. The findings rendered by the learned Arbitrator that the Term Sheet was prima facie an agreement to enter into an agreement, was not even a plausible view. This Court finds that the learned Arbitrator took into consideration all the relevant material, including the clauses of the Term Sheet in detail, while rendering findings on the said aspect of the matter, which cannot be termed as wholly implausible. Therefore, on the said aspect of the matter, no ground is made out on behalf of the petitioner for holding that the finding rendered by the learned Arbitrator could be said to be perverse or illegal, to warrant exercise jurisdiction under Section 37 (2)(b) of the Arbitration Act. Applying the law pertaining to the scope of jurisdiction while considering the present petition filed under Section 37(2)(b) of the Arbitration Act, akin to considering an Appeal from Order, this Court does not find any ground for interference with the impugned order and hence, the present petition deserves to be dismissed. Petition dismissed.

Summary

Issues Involved:
1. Scope of jurisdiction under Section 37(2)(b) of the Arbitration and Conciliation Act, 1996.
2. Interpretation of the Term Sheet, particularly whether it constituted a binding offer or merely an agreement to agree.
3. Whether the date of 12.04.2023, specified in the Term Sheet, was sacrosanct and whether it was extended by mutual agreement in writing.

Detailed Analysis:

1. Scope of Jurisdiction under Section 37(2)(b) of the Arbitration and Conciliation Act, 1996:
The court examined the scope of its jurisdiction under Section 37(2)(b) of the Arbitration Act, which allows appeals against orders granting or refusing interim measures under Section 17. It was noted that while exercising jurisdiction under Section 37(2)(b), the court should apply principles akin to those applicable to an Appeal from Order under Order 43 of the CPC. The court emphasized that it should not conduct a merit-based review or substitute its own view for that of the arbitrator, provided the arbitrator has considered all relevant material and adopted a plausible view. The court cited precedents, including the judgments in *Wander Ltd. vs. Antox India Pvt. Ltd.*, *Swan Energy Limited vs. Peninsula Land Limited*, and *Karanja Terminal & Logistics Pvt. Ltd. v. Sahara Dredging Ltd.*, to support this position.

2. Interpretation of the Term Sheet:
The petitioner contended that the Term Sheet was a binding offer, which upon acceptance, converted into a concluded contract. The respondents argued that the Term Sheet was non-binding and merely an agreement to agree, requiring further negotiations. The arbitrator examined the Term Sheet in detail and concluded that it was an agreement to enter into an agreement, not a binding offer. The court found that the arbitrator’s view was plausible, considering the clauses of the Term Sheet, which indicated that various steps were required before a binding SPA could be executed. The court held that the arbitrator’s findings were not perverse or illegal and therefore, did not warrant interference under Section 37(2)(b) of the Arbitration Act.

3. Sacrosanct Nature of the Date 12.04.2023 and Its Extension:
Clause 16 of the Term Sheet specified that the Term Sheet would terminate on 12.04.2023 unless extended in writing. The petitioner argued that the date was extended through communications, including emails and WhatsApp messages. The arbitrator analyzed these communications and concluded that there was no written agreement to extend the date as required by Clause 16. The court agreed with the arbitrator’s interpretation, noting that the petitioner’s claim of "automatic extension" was contrary to the Term Sheet’s clear terms. The court found that the arbitrator’s view that the Term Sheet terminated on 12.04.2023 was plausible and supported by the evidence.

Conclusion:
The court dismissed the petition, holding that the arbitrator’s findings were based on a plausible view of the Term Sheet and the relevant material. The petitioner failed to demonstrate sufficient grounds for interference under Section 37(2)(b) of the Arbitration Act. The court emphasized that it would not interfere with the arbitrator’s discretion unless the findings were perverse or illegal, which was not the case here.