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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 ..... k. 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. The 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. The Single Judge has held that judicial interference to an award is not to sit as an Appellate Court. Where a contract falls for interpretation, the Arbitrator is the final judge to interpret the contract and findings of fact arrived at by an Arbitrator cannot be questioned save and except ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Subject to Free Market due fulfilment and faithful performance of its obligation under this agreement, ISPAT shall pay Free Markets an all inclusive, non-refundable fixed fee (the commitment fee) of INR 100,000.00 per calendar month during the Full Source Term, which shall be invoiced on monthly basis. Unless otherwise specifically set forth in the Agreement or in this Schedule, the commitment fee shall be prorated for any month that this Schedule is in effect for less than an entire calendar month. In the event that Free Markets conduct fewer than six(6) sourcing projects during the Full Source Term or INR 250 crores has been reached in less than 6 sourcing projects, for reasons attributable to ISPAT the Commitment Fee shall remain unchanged. 7. Article 6.2 of Schedule I to the agreement provided for payment of Full Source Fee, and it reads as under: Full Source Fee. Subject to Free Market the fulfilment and faithful performance of its obligations under this Agreement, ISPAT shall pay Free Markets fixed and an all inclusive lump sum fee of INR 17,250,000.00 during the Full Source Term ( Full Source Fee ) to be invoiced as follows: INR 525,000.00 each calendar month for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred to a Sole Arbitrator, Justice A.P.Shah, (a retired Chief Justice of the Delhi High Court). 14. The respondent, as claimant before the Arbitrator, raised six claims as under:- (i) Rs.1,68,75,000/- towards Commitment (or fixed) fee and the Full Source (or performance) fee for the work done by the claimant; (ii) Rs.27,63,556/- towards the Volume Deficit Fees in terms of Article 6.5 of Schedule I of the agreement; (iii) Rs.3,65,906/- towards reimbursement of expenses in terms of Article 4 of Schedule I of the agreement; (iv) Rs.27,57,560/ towards interest on the outstanding amounts calculated in terms of Article 3.2 of Schedule I of the agreement; (v) Pendentelite and future interest @18% per annum; and (vi) Costs. 15. The appellant filed its statement of defence and counter-claim claiming:- (i) Refund of Rs.18,75,000/- paid under invoices raised against commitment fee and the full source fee alleging that since the respondent had breached the contract no payment was due and that the running payments made had to be refunded; (ii) Damages due to the material loss to the tune of Rs.2,40,59,126/- and Rs.9,04,14,702/- towards additional costs for procuring 4 lots of fluxes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad accorded its content for postponement of the two projects since at that time, the markets were volatile and were not conducive to conducting the said two projects. It was therefore decided between the Parties that the two sourcing projects of Coke and Refractories shall be revisited later. It can further be seen that the Claimant was unable to conduct the further sourcing events due to pendency of arrears to the tune of Rs. 1, 31, 25, 000/-. After the payment of the first three invoices, the Respondent made no further payment to the Claimant and in fact, no reason was given for not making such payment despite receipt of invoices. Therefore, these projects were clearly not completed because the Respondent did not make payment of the arrears xxx xxx 90. In the projects of Refractories and Coke were initially stopped with the consent of the Respondent and thereafter the said projects could not be completed due to Respondent's refusal to make payment of fees and arrears to the Claimant. Thus four sourcing projects were completed by the Claimant. Clause 6.4 of Schedule I to the contract makes the Claimant liable to refund any access fee received by it at the end of every five mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Judge appellant contended that there was no evidence to establish that it had consented to 2 sourcing projects being postponed and as a consequence it was urged that the admitted position would be that the respondent had not achieved the CBV of Rs.250 crores. Highlighting that with respect to 4 sourcing projects CBV in sum of Rs.213,15,25,902/- was achieved, it was urged that no amount whatsoever was payable. It was highlighted that the respondent would not be entitled to any pro-rata payment of the full source fee pertaining to the 4 projects successfully completed. It was highlighted that the award was inconsistent inasmuch as claim towards Volume Deficit Fee (VDF) was turned down and yet pro-rata payment was made. 23. The learned Single Judge has held that judicial interference to an award is not to sit as an Appellate Court. 24. Suffice would it be for us to state that where a contract falls for interpretation, the Arbitrator is the final judge to interpret the contract and findings of fact arrived at by an Arbitrator cannot be questioned save and except as being perverse or based on no evidence or ignoring relevant evidence. 25. With aforesaid law in mind, the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X
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