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TMI Blog2019 (1) TMI 1371X X X X Extracts X X X X X X X X Extracts X X X X ..... e Court - there was no reason for the learned Judge to restrict the award under Schedule E to ₹ 37,34,090/- while in principle upholding the learned Umpire’s award of ₹ 346.45 lacs on that count. There are no justification in the learned Judge disallowing the learned Umpire’s award of ₹ 203.43 lacs on account of damages for preventing GMB to use the logo GMB-Neycer - A Court hearing an application for setting aside an arbitral award does not have the power to reappraise the evidence before the Arbitrator/Umpire. So long as there is some evidence on the basis of which an award has been made, the Court shall not go in the sufficiency or otherwise of such evidence. The impugned judgment and order is set aside to the extent it interferes with the award of the Ld. Umpire. The Ld. Umpire’s award is upheld - appeal allowed - decided in favor of appellant. - APO 34 of 2016, GA 4026 of 2000, AC 32 of 2000, APOT 42 of 2016 - - - Dated:- 24-9-2018 - The Hon ble The Chief Justice Jyotirmay Bhattacharya And The Hon ble Justice Arijit Banerjee For the Appellant : Mr. Ranjan Deb, Sr. Adv.Ms. Suparna Mukherjee, Adv. Mr. Meghajit Mukherjee, Adv. Ms. Shamayem Fasih, A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tonnes per annum. (ii) Neycer would provide its marketing network and sales infrastructure to GMB. (iii) GMB would have the right to manufacture and sell products using the name of Neycer. (iv) Neycer would train unskilled labour employed by GMB and would help in selection and training of personnel, technicians and supervisory staff. (v) Neycer was to set up the manufacturing unit and business market of GMB s products. (vi) Neycer would jointly set up the factory and assist GMB to obtain guaranteed optimum production in terms of both quality and quantity. (3) Mr. Deb submitted that Neycer failed, neglected and/or refused to perform its obligations under the said Collaboration Agreement. As a result, GMB suffered substantial loss and damage. According to Mr. Deb, in view of the breaches committed by Neycer, the said agreement stood terminated. (4) In September 1989, Neycer invoked the arbitration clause contained in the said agreement and nominated its arbitrator. In October 1989, GMB nominated its Arbitrator. In so far the claim of GMB was concerned, the Joint Arbitrators were in disagreement and consequently they referred the disputes and dif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dge also erred in allowing part of the said claim. According to Mr. Chakraborty, the entire arbitral award should have been set aside by the learned Single Judge since there was no evidence on record to support even an award for ₹ 2 crores in favour of GMB. Court s view:- (9) The short question that falls for determination by this Court is whether or not GMB s claim before the learned Arbitrators/learned Umpire was restricted to ₹ 2 crores. The Learned Umpire held that the scope of the reference was not restricted to time overrun for which approximately ₹ 2 crore was claimed by GMB. Learned Umpire analysed the correspondence exchanged between the parties contemporaneously prior to reference of the disputes to arbitration and came to the conclusion that all the disputes as pleaded in the statement of claim both before and after amendment, had been referred to arbitration. He held that there is no merit in the contention of learned Counsel for Neycer that the only claim that GMB had is the claim of overrun cost of ₹ 2 crores. (10) The Learned Single Judge differed with the Learned Umpire with regard to the aforesaid point. According to the learned Sin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so stated that with regard to sale assistance, it was not clear about the help that Neycer would extend to GMB and Neycer was requested to inform GMB as to what sales infrastructure Neycer has got and how Neycer intended to assist GMB. (13) In response Neycer wrote a letter dated 29 August, 1989 stating therein that it was in no way responsible for the cost overrun and that Neycer had fulfilled its obligations under the Collaboration Agreement. (14) By a letter dated 4 September, 1989 GMB again complained of nonperformance of Necyer s obligations under the Collaboration Agreement. The material statements in the said letter are as follows:- .. IS IT NOT REALLY VERY SURPRISING THAT A AMAN FOR GENERAL SUPERVISION SHOW YOU HAD AGREED TO BE SENT FOR OUR FACTORY AFTER OUR MEETING ON 3RD AND 5TH DEC., 1988 COULD NOT BE SENT UNTIL NOW. . IT WAS EXPECTED THAT YOU WOULD TAKE NECESSARY CARE TO FULFIL YR OBLIGATION AS PER THE COLLABORATION AGREEMENT. I THEREFORE STILL STAND ON MY VIEWS THAT THE COST OVERRUN SHOULD DEFINITELY BE CLAIMED FROM YOU BECAUSE IN ABSENCE OF YOUR POSTING A SENIOR LEVEL PERSON FOR OUR GENERAL SUPERVISION OUR PRODUCTION HAS BEEN DELAYED CONSIDERABLY. M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reement read with the addendum thereto .from the exchange of such correspondence and your action, including entertaining of an ex-employee or ours, we have to conclude that you are not interested in honouring your commitments under the agreement, but, on the other hand, you only want to secure and utilize the licence which we had agreed to grant you to use our logo as part of the mark of you product for marketing the same. You cannot expect us to grant such a licence in view of your breaches of the Collaboration Agreement and your attempt to claim the right only to the use of the logo as a licensee while giving a go-by to the rest of the agreement Inasmuch as the contract between the parties provides for a reference of all disputes to arbitration, we hereby invoke the said clause and we have appointed Retd. Justice P. Rama Rao as one of the Arbitrators and call upon you to nominate an Arbitrator within 15 days from the date of receipt of this notice the dispute referred to the said Arbitrators will be the compensation payable to us for the breaches of Collaboration Agreement committed by you and your disentitlement to any licence or permission to use the logo. You are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es sustained and to be sustained by us on account of this obligation We agree not to use your brand name in our products reserving our rights to claim all damages and compensations from you without prejudice to our rights and contentions in the matter . Due to several breaches of the Collaboration Agreement committed by you, we have sustained huge monetary losses and are still sustaining losses .. (21) In response, Neycer wrote a letter dated 13 November 1989 dealing with all the allegations made in GMB s letter dated 24 October, 1989. (22) The claims made by GMB in the statement of claim were on six counts as indicated in Schedules A to F to the statement of claim. The statement of claim was subsequently amended. Amended claims are indicated in Schedules A to F to the amended statement of claim. The heads of claim, original amount claimed, amended amount claimed, award given by Learned Umpire against each claim and the findings of the Learned Single Judge regarding each claim may be conveniently summarised in a Tabular form as follows:- SCHEDULES Original Statement of Claim Amended Statement of Clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he instant case, there was no clear or specific reference of disputes. Neither party has produced any letter addressed to the Arbitrator nominated by it referring disputes. The disputes between the parties which were referred to arbitration have to be culled out from the correspondence exchanged between the parties. (ii) The expression overrun amount is not specific but very wide. Under the agreement between the parties, the collaborator (Neycer) was required to endeavour to commission GMB s plant within 18 calendar months from the date of sanction of term loan by financial institutions. (iii) The term loan was sanctioned on 19 May, 1987. Hence, the plant should have been commissioned by 19 November, 1988 which was extended by mutual agreement up to 31 January, 1989. Even by the extended date Neycer failed and neglected to commission the plant which could only be commissioned on 7 December, 1989. Hence, there was a delay of about 11 months in commissioning the plant. During the overrun time period GMB must have incurred overrun costs and suffered damages. The expression overrun amount includes within it both costs incurred and damages suffered. (iv) With refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lternative but to agree with, even keeping in mind the parameters and scope of restricted interference, the contention of the petitioner that the scope of reference could not be extended beyond what was mentioned in the letter dated October 19, 1989, i.e., Ext. G/71, more so, as it was by this letter that the claimant had appointed its nominee Arbitrator. It is by this letter that the Arbitrator was nominated by the respondent herein for adjudication of their claim for ₹ 2 crores due to various alleged breaches on the part of the petitioner and ₹ 2 crores was quantified as the losses suffered by GMB on all counts. Therefore, there was hardly any scope for the Umpire to exceed the jurisdiction or scope of reference beyond the same. The other claims that the Umpire entertained were obviously outside the scope of the reference and, therefore, beyond his jurisdiction. ......... Thus, from the discussion I hold that claim of the respondent should have been restricted to ₹ 2 crores as the overrun cost. The Umpire exceeded his jurisdiction in entertaining the claims beyond it........ (27) Thus, the learned Single Judge came to the conclusion that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arty to an arbitration agreement or any person claiming under him desiring to challenge the existence or validity of an arbitration agreement or an award or to have the effect of either determined shall apply to the Court and the Court shall decide the question on affidavits: Provided that where the Court deems it just and expedient, it may set down the application for hearing on other evidence also, and it may pass such orders for discovery and particulars as it may do in a suit. In the case of Puri Construction Pvt. Ltd.-vs.- Union of India AIR 1989 SC 777, the Apex Court held that when a court is called upon to decide the objections raised by a party against an arbitral award, the jurisdiction of the Court is limited, as expressly indicated in the Arbitration Act, and it has no jurisdiction to sit in appeal and examine the correctness of the award on merits. A Court while examining the objections taken to arbitral award is not required to examine the correctness of the claim on merits. It is not open to the Court to examine the correctness of an award on a reappraisal of the evidence. In the case of M/s. Sudarsan Trading Co.-vs.-The Govt. Of Kerala Anr., AIR 198 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidered binding between the parties for the reason that the parties select the arbitrator and powers of the Court to set aside the award are restricted to cases set out in Sec. 30 of the Act. The jurisdiction of Courts including High Courts is not independent of the statute. The arbitrator s award is final both on facts as well as law. There is no appeal from his verdict. However, an award can be set aside only in situations specified in Secs. 30 and 33 of the Act. In Bharat Coking Coal Ltd.-vs.-Annapurna Construction, (2003) 8 SCC 154, the Apex Court observed, inter alia, that if an arbitrator has travelled beyond the contract, he would be acting without jurisdiction, whereas if he has remained inside the parameters of the contract, his award cannot be questioned on the ground that it contains an error apparent on the face of the record. (29) Let us first take the point of scope of the arbitral reference. It is not in dispute that there was no specific reference of disputes by either of the parties when they nominated their respective Arbitrators. In other words, specific heads and amounts claimed under each head were not enumerated in the letters whereby Arbitrators were no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , in our view, it is not open to Neycer to contend that GMB s claim was restricted to Rs. Crores. (32) Hence, we are of the firm view that there was no reason for the learned Judge to restrict the award under Schedule E to ₹ 37,34,090/- while in principle upholding the learned Umpire s award of ₹ 346.45 lacs on that count. (33) We also find no justification in the learned Judge disallowing the learned Umpire s award of ₹ 203.43 lacs on account of damages for preventing GMB to use the logo GMB-Neycer. The learned Umpire has discussed the said claim in great details and analysed the evidence, both oral and documentary in respect of the said claim with great care. A Court hearing an application for setting aside an arbitral award does not have the power to reappraise the evidence before the Arbitrator/Umpire. So long as there is some evidence on the basis of which an award has been made, the Court shall not go in the sufficiency or otherwise of such evidence. Only if an award is based on no evidence at all, the court would be justified in interfering. We have carefully gone through the award of the learned Umpire and we are of the considered view that the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ained by the learned Single Judge as there was no evidence to support such claim. We are unable to accept such submission as we have already indicated that in our view the learned Umpire s award cannot be said to be based on no evidence. (38) No case has been made out by Neycer that the Learned Umpire misconducted himself or the arbitral proceedings or that the Arbitral Award has been improperly procured or is otherwise invalid. No ground for interference with the Award has been made out. (39) In the result, GMB s appeal succeeds. The impugned judgment and order is set aside to the extent it interferes with the award of the Ld. Umpire. The Ld. Umpire s award is upheld. Neycer s appeal stands dismissed. (40) APO 34 of 2016 and APOT 42 of 2016 are accordingly disposed of. There will, however, be no order as to costs. (41) Urgent certified photocopy of this judgment and order, if applied for, be given to the parties upon compliance of necessary formalities. I Agree. (Jyotirmay Bhattacharya, CJ.) (Arijit Banerjee, J.) Later: After the judgment is delivered, prayer is made on behalf of Neycer for stay of operation of this judgment and order for a period of three wee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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