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TMI Blog2022 (1) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... patent illegality, same is a ground for setting aside the award - From a reading of Section 34(4) of the Act, it is clear that on receipt of an application under subsection (1), in appropriate cases on a request by a party, Court may adjourn the proceedings for a period determined by it in the order to give the Arbitral Tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of Arbitral Tribunal, will eliminate the grounds for setting aside the arbitral award. Reliance is placed on the documentary evidence i.e. letters dated 01.06.2010, 17.06.2010, email dated 02.08.2010 and letters dated 08.11.2010 20.01.2011. It is the specific case of the respondent that learned Arbitrator failed to appreciate such evidence, which would establish their case that there was accord and satisfaction between the parties and there was no abrupt termination or any breach on their part. It is their case that in view of such omission to consider vital evidence on record, findings recorded by the Arbitrator are perverse and constitute patent illegality within the meaning of Section 34(2A) of the Act. The Notice of Motion filed under Section 34(4) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zation, whichever is earlier; b) The respondent (ICICI Bank) is ordered and directed to pay to the claimant (I-pay) ₹ 50,000/- (Rupees Fifty Thousand) as cost on the application under Section 16 made before this Arbitral Tribunal. 4. In the petition, filed by the respondent-ICICI Bank under Section 34(1) of the Act, it has taken out Notice of Motion No.550 of 2018 seeking interim order to stay the effect, operation, implementation and execution of the award dated 13.11.2017, passed by the learned Arbitrator. In the same petition, the appellant/I-Pay has taken out Notion of Motion No.1549 of 2019, under Section 34(4) of the Act, seeking directions to adjourn the proceedings for a period of three months or such other time as may be determined by the Court, and direct the learned Arbitrator to issue appropriate directions/ instructions / additional reasons and / or to take such necessary and appropriate action. The High Court by a common order, has passed the conditional order in the Notice of Motion taken out by the respondent and dismissed the Notice of Motion No.1549 of 2019, taken out by the appellant herein, under Section 34(4) of the Act. Aggrieved by the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operations were paralyzed. The appellant made a total claim of ₹ 95 crores against the respondent. At first instance, a suit was filed in O.S. No.1094 of 2012 on its Original Civil Jurisdiction in the High Court of Judicature at Bombay. As there was a clause in the Agreement for arbitration, the High Court has referred the dispute to arbitration under Section 8 of the Act by appointing Mr. Justice R.G. Sindhakar (Retd.) as a Sole Arbitrator for resolving the dispute between the parties. 8. Mr.Justice R.G.Sindhakar (Retd.), who was appointed as Sole Arbitrator, has passed award dated 13.11.2017, directing the respondent herein, to pay to the appellant claimant an amount of ₹ 50,00,00,000/- (Rupees Fifty Crores) together with interest @18% per annum from the date of award till payment and further directed to pay an amount of ₹ 50,000/- (Rupees Fifty Thousand) towards the costs. 9. Aggrieved by the award of learned Sole Arbitrator, the respondent ICICI Bank has filed application under Section 34(1) of the Act for setting aside the award. In the said application, it is the case of the respondent that there was accord and satisfaction between the parties and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Counsel appearing for the respondent ICICI Bank. 12. By impugned order, the Notice of Motion moved by the appellant for remitting the matter to the Sole Arbitrator under Section 34(4) of the Act, has been rejected. It is the case of the appellant that though the Arbitrator has awarded compensation/damages in view of the case of the appellant that the contract between the parties was illegally and abruptly terminated by the respondent, but he has not recorded detailed reasons on the said point. On the other hand, it is the case of the respondent, that there was full accord and satisfaction between the parties, as such, appellant is not entitled for any compensation/damages, as claimed for. To prove the case that there was accord and satisfaction between the parties, the respondent has filed certain communications between the parties including letter dated 01.06.2010. It is the contention of Dr.Abhishek Manu Singhvi, learned senior counsel appearing for the appellant, that though the issue was resolved by the Arbitrator by holding that there was no accord and satisfaction between the parties, however, he has omitted to give adequate reasons in support of point no.1. Thus, it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where the arbitral award does not provide any reasoning or if the award has some gaps in the reasoning. Learned senior counsels, with the above submissions, requested to set aside the impugned order and to issue directions for remitting the award to Arbitral Tribunal for consideration of the issue, on abrupt and illegal termination of the agreement entered between the parties and to give detailed reasons. 14. On the other hand, Shri K.V. Vishwanathan, learned senior counsel for the respondent has made following submissions: The Notice of Motion moved by the appellant is dismissed by the High Court by assigning valid reasons in the impugned order and in view of the same, no interference is called for. No grounds are made out in the application filed by the appellant for remitting the matter to the Arbitrator, and in fact, the Arbitrator has not considered the relevant documentary evidence produced on behalf of the respondent, and passed the award. As the Arbitrator has passed the award by ignoring important and relevant evidence on record, it suffers from perversity and patent illegality, which cannot be cured on remittal under Section 34(4) of the Act by the Arbitrator. Under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... award on agreed terms under Section 30 of the Act. Chapter VII of the Act provides recourse against arbitral award. The recourse to a Court against an arbitral award is to be in terms of Section 34(1) of the Act. As per Section 34(2A) of the Act, if the arbitral award arising out of arbitrations other than international commercial arbitrations, is vitiated by patent illegality, same is a ground for setting aside the award. Sections 34(2A), (3) (4) of the Act, read as under: 34.(2A) An arbitral award arising out of arbitrations other than international commercial arbitrations, may also be set aside by the Court, if the Court finds that the award is vitiated by patent illegality appearing on the face of the award: Provided that an award shall not be set aside merely on the ground of an erroneous application of the law or by re-appreciation of evidence. (3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral tribunal; Provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act by the appellant, clearly states that the said Motion was moved as an abundant precaution and they are seeking remission to the Arbitrator to provide detail and express reasons in addition to reasons already stated in the arbitral award dated 13.11.2017. It is also their case that it is essential that additional reasons are made available by learned Arbitrator in support of his findings recorded in the award. On the other hand, it is the case of the respondent, that there is no finding at all, on the issue viz. whether the contract was illegally and abruptly terminated by the respondent? , and in spite of the same, the Arbitrator without considering the important documents/communications between the parties, which throw light on accord and satisfaction between the parties, has proceeded to pass the award stating that there was no accord and satisfaction . 19. As contended by learned senior counsel for the appellant, it is true that Section 34(4) of the Act is couched in a language, similar to Article 34(4) of the UNCITRAL Model Law on International Commercial Arbitration. In the case of AKN Anr. v. ALC Ors. (2015) SGCA 63 , by considering legislative history of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ference between finding and reasons as pointed out by the learned senior counsel appearing for the respondent in the judgment in the case of Income Tax Officer, A Ward, Sitapur v. Murlidhar Bhagwan Das AIR 1965 SC 342 . It is clear from the aforesaid judgment that finding is a decision on an issue . Further, in the judgment in the case of J. Ashoka v. University of Agricultural Sciences and Ors. (2017) 2 SCC 609, this Court has held that reasons are the links between the materials on which certain conclusions are based and the actual conclusions . In absence of any finding on point no.1, as pleaded by the respondent and further, it is their case that relevant material produced before the Arbitrator to prove accord and satisfaction between the parties, is not considered, and the same amounts to patent illegality, such aspects are to be considered by the Court itself. It cannot be said that it is a case where additional reasons are to be given or gaps in the reasoning, in absence of a finding on point no.1 viz. whether the contract was illegally and abruptly terminated by the respondent? 21. Further, Section 34(4) of the Act itself makes it clear that it is the discreti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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