9911796707
TMI Blog2023 (5) TMI 322X X X X Extracts X X X X X X X X Extracts X X X X ..... under the Agreement, the appellant was expected to receive wheat on behalf of the 1st respondent from FCI godown at Thoothukudi and transport it by trucks to Thoothukudi Port which involves loading the goods into vessels at the specified loading rates. According to the appellant, it is the duty and responsibility of the 1st respondent to supply goods as well as to arrange for vessels. 3. In the course of fulfilling the terms of Contract, the appellant had to hire godowns for storage of goods and according to the appellant, the activity of providing for storage godowns to store goods was not contemplated under the Agreement and it did not fall within the scope of the work agreed under the Agreement. However, the appellant took it as an additional work and hired godowns on behalf of the 1st respondent. Initially, when the appellant raised bills for such storage rental charges during February/March, 2001, the 1st respondent paid for it. However, subsequently, the 1st respondent declined to pay such storage rental charges. 4. The further case of the appellant is that the appellant entered into a similar Contract with the 1st respondent Company's branch at Bangalore on an identic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clear that the finding recorded both by the District Court and by this Court that there exist grounds for setting aside the award, is only a prima facie finding and not a conclusive finding. Therefore the Arbitrator and the District Court (while resuming the proceedings in the main O.P.) shall consider the matter, uninfluenced by any finding recorded here or in the District Court. 7. Pursuant to the above order, the Arbitrator heard the parties to the limited extent of remand made by this Court and by an additional Award dated 24.04.2009, re-affirmed the earlier Award dated 16.03.2006 and dismissed the claim made by the appellant. 8. The matter was again taken up by the District Court and after hearing the arguments of both the sides, the impugned order dated 04.08.2010 was passed, dismissing the petition filed under Section 34 of the Act. Aggrieved by the same, the present appeal has been filed before this Court. 9. The learned counsel for the appellant mainly focused his arguments on the terms of Agreement and submitted that the activity of providing storage godowns to store goods was not even contemplated under the Agreement and the appellant had undertaken it as an additiona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany vs. Karnataka Vidyuth Karkhane Limited reported in 2016 4 SCC 119. (f) Mahanagar Telephone Nigam Limited vs. Tata Communication Limited reported in 2019 5 SCC 341. (g) Oil & Natural Gas Corporation Limited vs. Saw Pipes Limited reported in 2003 5 SCC 705. (h) Delhi Development Authority vs. R.S. Sharma and Company, New Delhi reported in 2008 13 SCC 80. (i) ONGC Limited vs. Garware Shipping Corporation Limited reported in 2007 13 SCC 434. 13. Per contra, the learned counsel for the 1st respondent Company submitted that Clause 2 read with Clause 6 makes it abundantly clear that the entire responsibility of handling, protection, loss/damages, transit shed and temporary storage of goods before loading the goods into the vessel at the port, is the sole responsibility of the Handling Agent and that is the reason why when the rates were fixed, each item was taken into consideration and the total rate was fixed as per the Annexure. In view of the same, appellant does not have any right to claim for the storage charges or the godown rent. This issue has been sufficiently dealt with by the Arbitrator and since, the claim made by the appellant was covered well within the Agreem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jurisdiction conferred on Courts under Section 34 of the Arbitration Act is fairly narrow, when it comes to the scope of an appeal under Section 37 of the Arbitration Act, the jurisdiction of an Appellate Court in examining an order, setting aside or refusing to set aside an award, is all the more circumscribed. In MMTC Limited v. Vedanta Limited (2019) 4 SCC 163 CIVIL APPEAL NO. 10341 OF 2011, the reasons for vesting such a limited jurisdiction on the High Court in exercise of powers under Section 34 of the Arbitration Act has been explained in the following words: "11. As far as Section 34 is concerned, the position is well-settled by now that the Court does not sit in appeal over the arbitral award and may interfere on merits on the limited ground provided under Section 34(2)(b) (ii) i.e. if the award is against the public policy of India. As per the legal position clarified through decisions of this Court prior to the amendments to the 1996 Act in 2015, a violation of Indian public policy, in turn, includes a violation of the fundamental policy of Indian law, a violation of the interest of India, conflict with justice or morality, and the existence of patent illegality in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h and cannot be equated with a normal appellate jurisdiction. The mandate under Section 34 is to respect the finality of the arbitral award and the party autonomy to get their dispute adjudicated by an alternative forum as provided under the law. If the Courts were to interfere with the arbitral award in the usual course on factual aspects, then the commercial wisdom behind opting for alternate dispute resolution would stand frustrated." 19. In Parsa Kente Collieries Limited v. Rajasthan Rajya Vidyut Utpadan Nigam Limited, adverting to the previous decisions of this Court in McDermott International Inc. v. Burn Standard Co. Ltd. And Others and Rashtriya Ispat Nigam Ltd. V. Dewan Chand Ram Saran, wherein it has been observed that an Arbitral Tribunal must decide in accordance with the terms of the contract, but if a term of the contract has been construed in a reasonable manner, then the award ought not to be set aside on this ground, it has been held thus: "9.1 ..It is further observed and held that construction of the terms of a contract is primarily for an Arbitrator to decide unless the Arbitrator construes the contract in such a way that it could be said to be something tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g a possibility of alternative interpretation which may sustain the arbitral award. Section 34 is different in its approach and cannot be equated with a normal appellate jurisdiction. The mandate under Section 34 is to respect the finality of the arbitral award and the party autonomy to get their dispute adjudicated by an alternative forum as provided under the law. If the Courts were to interfere with the arbitral award in the usual course on factual aspects, then the commercial wisdom behind opting for alternate dispute resolution would stand frustrated. 13. It is also settled law that where two views are possible, the Court cannot interfere in the plausible view taken by the arbitrator supported by reasoning. This Court in Dyna Technologies [Dyna (2020) 5 SCC 164 CIVIL APPEAL NO. 10341 OF 2011 Technologies (P) Ltd. V. Crompton Greaves Ltd., (2019) 20 SCC 1] observed as under: (SCC p. 12, para 25) 25. Moreover, umpteen number of judgments of this Court have categorically held that the Court should not interfere with an award merely because an alternative view on facts and interpretation of contract exists. The Courts need to be cautious and should defer to the view taken by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... level and this is because the parties to the Agreement make a conscious decision to exclude the Courts' jurisdiction by opting for arbitration as the parties prefer the expediency and finality offered by it. 22. The relevant clauses in the Cargo Handling Agreement and the Annexure are extracted hereunder: 2. DUTIES & RESPONSIBILITIES OF THE HANDLING AGENT 2.1 The HANDLING AGENT shall make arrangements to receive/take delivery of Goods on behalf of MMTC from nominated Godowns of FCI and co-ordinate all activities after receipt of delivery order including identification of stocks with inspection agencies/buyers representative. The Handling Agent will ensure only identified approved goods are transported and loaded, 2.2 The HANDLING AGENT shall arrange transportation of goods from FCI's Depots nominated by MMTC after weighment. The weighment shall be recorded for each truck by the HANDLING AGENT and the proof shall be provided to MMTC as and when demanded: MMTC shall have the right to nominate its Officials/or their representative to supervise the operations. 2.3 The HANDLING AGENT shall be solely responsible for the safety of Goods and shall not move or transport the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pre-inspection survey and weighment to port/wharf for effecting shipments. 2.9 The HANDLING AGENT shall arrange sufficient labour/trucks, etc., at their own cost for loading of Goods into rake/ship in time. 2.10 The HANDLING AGENT shall make all arrangements to bring back the Goods rejected by surveyor to MMTC's godown for temporary storage/without any charges. 2.11 The HANDLING AGENT shall arrange for temporary storage of Goods (in godown at port before loading into the vessel, if need be 2.12 The HANDLING AGENT shall arrange for inspection of vessels' hatches/holds by the surveyor and undertake fumigation prior to loading of vessel. They shall also obtain certificates to this effect to the satisfaction of MMTC 2.13 The HANDLING AGENT shall take-up stevedoring in case of FOB/C&F shipment at their cost. 2.14 The handling agent has to ensure loading rate of 3500 MT PWWD. 2.15 In case of shipment of Goods in bulk, the HANDLING AGENT shall be responsible/liable for retrieving all empty bags, counting, bundling the same and storing it, in the godown hired by MMTC before the same is disposed off by MMTC. MMTC shall dispose of the bags immediately on compilation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction charges shall be payable by MMTC. 6.7. All losses including demurrage, detention arising out of the delay in rake unloading/vessel loading would be to the account of the HANDLING AGENT. 6.8 The consolidated rates agreed with the Handling Agent shall be in force during the pendency of the agreement. There shall be no escalation or de-escalation of the consolidated rates agreed for whatsoever reason. 6.9 MMTC shall provide all requisite documents in time to comply and fulfill all statutory formalities. ANNEXURE S.No. Activity Cost/MT 1 Loading of SGS pre-inspected and approved cargo at FCI warehouse. Rs.11/- 2 Organising labour at FCI warehouse at Tuticorin town and at port warehouse of FCI as the case may be. Rs.21/- 3 Slinging of the bags at FCI godown. Rs.6/- 4 Weighrnent at FCI/Independent Weighbridge. Rs.5/- 5 Transportation to port wherever necessary. Rs.51/- 6 Entry clearance of trucks into port and outward clearance of unloaded trucks Rs.2/- 7 Unloading from trucks Rs.41/- 8 Organising private labour to clean and bag at wharf. Rs.9/- 9 De-slinging and de-bagging at wharf Rs.3/- 10 Cleaning of the wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taking into consideration Clause 2 and Clause 6 of the Agreement. On carefully going through the same, the appellant has been given the absolute responsibility to take delivery of the goods from the nominated godowns of FCI, arrange for the transportation of the goods after weighment, ensure the safety of the goods and accept full responsibility in respect of the goods and indemnify the 1st respondent for any loss or damages to the goods, to protect the consignment from damages during transportation, stocking and loading into the ship at the port, to arrange for the temporary storage of the goods in godown at port before loading into the vessel and to make all arrangements to bring back the goods rejected by the Surveyor to the godown belonging to MMTC. In short, the appellant has been saddled with the responsibility right from unloading from the FCI godown till the loading of the goods at the Thoothukudi port. The issue of storage of the goods, for whatever period, falls well within this process. The appellant claims that it is an additional work beyond the scope of the contract and hence is entitled for reimbursement of storage charges. Whereas, the 1st respondent claims that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rbitrator has given a finding to the effect that the claim made by the appellant goes beyond the scope of the Agreement. This finding cannot be read in isolation and it must be read along with the other reasonings given by the Arbitrator. The Arbitrator has found that whatever charges are claimed by the appellant falls within the Agreement and therefore, any extra charges claimed by the appellant, goes beyond the scope of the Agreement. The learned counsel for the appellant was not right in interpreting the same as if the storage charges fell beyond the scope of the Agreement and hence, Section 70 of the Contract Act will apply and consequently, the appellant will be entitled for restitution of the storage charges. 28. Even after the matter was remitted back to the file of the Arbitrator, the learned Arbitrator took into consideration the communication made through Fax, dated 06.02.2001 by the Manager of the 1st respondent Company and the claim made by the appellant to the effect that the storage charges were reimbursed by the other branches of the 1st respondent Company. The Arbitrator rendered a finding that the Manager of the 1st respondent Company cannot alter the terms of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
