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TMI Blog2013 (4) TMI 85X X X X Extracts X X X X X X X X Extracts X X X X ..... imit of the Cumulative Bid Volume. 3. The parties identified the following 6 commodities/services for the sourcing projects: (i) Alloys, (ii) Refractory, (iii) Fluxes, (iv) Consumables, (v) Logistics & Material Handling, and (vi) Coke & Pellets. 4. Undisputedly four out of six sourcing projects were completed by the respondent pertaining to the competitive bidding, being : (i) Rolls, (ii) Fluxes, (iii) Ferro Alloys and (iv) Transportation. With respect to the other two the agreement was not implemented and there was a dispute whether the appellant had consented to the respondent not executing the two due to unfavourable working conditions. 5. The details of the four sourcing projects which were detailed and completed are as follows : (i) Rolls - 13/08/2003 (ii) Fluxes - 28/08/2003 (iii) Ferro Alloys - 19/12/2003 & 20/12/2003 (iv) Transportation - 30/03/2004 & 31/03/2004. 6. Article 6.1 of Schedule I to the Agreement provided for payment of Commitment Fee by the appellant to the respondent, and we note that the same reads as under: "Commitment Fees Subject to Free Market due fulfilment and faithful performance of its obligation under this agreement, ISPAT shall pay Free Markets ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conducive and besides Rs.1,31,25,000/- remained outstanding and payable. 11. Responding vide letter dated June 25, 2004 the appellant declined to make any payment taking a stand that the respondent had not achieved the CBV of Rs.250 crores and additionally had also failed to maintain the Return On Investment (ROI) in the ratio 3:1 as envisaged by the agreement. To which the respondent responded on July 02, 2004 informing having achieved Cumulative Price Differential of more than Rs.8 crores, a figure which was above what was to be achieved under the contract. 12. Stalemate continued till when on May 26, 2005 the respondents served a legal notice on the appellant calling upon it to make payment in sum of Rs.1,72,40,906/-, to which appellant responded on June 20, 2005 denying any liability. 13. The dispute got referred to arbitration with each party nominating one Arbitrator. A third, presiding Arbitrator had to be appointed but vide order dated July 04, 2011 passed by this Court in OMP No.358/2010 it was agreed that the dispute could be referred to a Sole Arbitrator, Justice A.P.Shah, (a retired Chief Justice of the Delhi High Court). 14. The respondent, as claimant before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... light that the last issue would have resulted in the respondent succeeding if verdict was in its favour irrespective of the first factual dispute i.e. whether the appellant consented to 2 projects being deferred. 19. We note the conclusions reached by the learned Arbitrator on the three issues, in paragraph 81, 82, 90 and 91 of the award. The same read as under:- "81. ...Regarding whether it was incumbent upon the Claimant to maintain an ROI of 3:1, the answer is that the maintaining of ROI of 3:1 was mandatory in terms of Clause 6.4 of Schedule I to the contract. As to whether such ROI was maintained, the answer is that the ROI of 3:1 was clearly maintained by the claimant as per clause 6.4 of Schedule I to the contract, though the Cumulative Bid Volume of Rs. 250 crores was not achieved due to the reasons attributable to the Respondent... 82. ... Regarding whether there was consent of the Respondent for postponement of the two projects and whether the Claimant was prevented from doing so, it can be clearly seen that the Respondent had accorded its content for postponement of the two projects since at that time, the markets were volatile and were not conducive to conducting the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents after August 2003 entitled respondent to not proceed ahead with the work. Though not so expressly stated by the learned Arbitrator, it is apparent that the agreement was read as containing reciprocal obligations with commitment of the appellant being to make a monthly payment and the reciprocal obligation of the respondent being to proceed ahead with the work. 21. The learned Arbitrator, after adjusting the amounts paid, awarded the first claim i.e. commitment fee in sum of Rs.1,53,90,360/-. Rejecting the volume deficit fee because of the finding that there was consent even by the respondent to postpone 2 projects and finally give up the same due to market conditions not being favourable, Rs.1 lakh was awarded towards reimbursement of expenses. Pre-claim interest was awarded in sum of Rs.25,16,687/- and pendente lite and future interest was awarded @ 9% per annum. Cost of arbitration in sum of Rs.15 lakhs was awarded. Needless to state the counter claims were denied. 22. Laying a challenge to the award before the learned Single Judge appellant contended that there was no evidence to establish that it had consented to 2 sourcing projects being postponed and as a consequence i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could not have refused to make monthly payments on a mere apprehension that the respondent might not be able to achieve the ROI of 3:1. We note that as per evidence on record it was on the basis of this apprehension that monthly payments were not being made. To put it simply, running payments had to be made and at the end of the project if it was found that ROI of 3:1 was not achieved, treating the same to be a breach by the respondent, the payments would then become refundable. 28. We refuse to deal with all the contentions urged in appeal for the reason each and every contention has been dealt with by the learned Arbitrator. We are not to sit in appeal. 29. We have brought out that the Arbitrator has dealt with an issue within his mandate and assuming that the learned Arbitrator is wrong in appreciating the evidence or in interpreting the contract, still no case would be made out for judicial interference on account of the fact that pertaining to awards, the conclusions being wrong (as distinct from being perverse) cannot be urged on matters of fact and as regards the interpretation of the contract, unless it is shown that a wrong legal principle embodied in a statute has been ..... X X X X Extracts X X X X X X X X Extracts X X X X
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