Bombay High Court
CONSO FEEDSversusALFA LAVAL (INDIA) PVT.LTD
- Decided
- Disposal
- DISMISSED
- Bench
- SHARMILA U DESHMUKH
Holding
The High Court dismissed the Section 34 petition, upholding the arbitrator’s award and finding no ground for interference.
Summary
The petitioner, Conso Feeds, purchased a fishmeal plant from Alfa Laval (India) and paid Rs. 4.94 crore, securing a performance bank guarantee of Rs. 2.45 crore. The plant could not be commissioned due to alleged design and equipment defects, leading the petitioner to invoke arbitration under the Arbitration and Conciliation Act, 1996. The sole arbitrator awarded a refund of Rs. 4.45 crore for the purchase price but held that claims 15(2) to 15(8) – covering excise duty, taxes, freight, accommodation, infrastructure upgrades, raw material costs, interest and loss of business – were barred by Clause 10(a) and 10(b) of the Techno‑Commercial Agreement and capped at the amount of the bank guarantee. The petitioner challenged this award via a Section 34 petition, arguing that the clauses should not exclude direct losses, that interest pendente lite was wrongly denied, and that the award was perverse and violative of public policy. The High Court held that the arbitrator’s interpretation of the contract was a plausible view, not patently illegal or perverse, and that Section 34 does not permit substitution of the court’s view for that of the arbitrator. Consequently, the petition was dismissed, leaving the award intact.
Issues considered
- The applicability of Clause 10(a) and 10(b) of the Techno‑Commercial Agreement to exclude claims 15(2)‑15(8).
- Whether the arbitrator erred in interpreting the warranty clause and its precedence over Clause 10.
- The entitlement to interest pendente lite under Section 31(7) of the Arbitration Act.
- Whether the award is perverse, patently illegal or violative of public policy, warranting interference under Section 34.
- The scope of judicial review of an arbitral award under the Arbitration and Conciliation Act, 1996.
Legislation cited
- Arbitration and Conciliation Act, 1996 — s. 28(3), 31(7), 33, 34
- Indian Contract Act, 1872 — s. 73
Subjects
- Arbitration
- Section 34 petition
- Contract interpretation
- Consequential damages
- Limitation of liability
- Performance bank guarantee
- Interest pendente lite
- Public policy
- Breach of contract
- Fishmeal plant
Judgment
2026:BHC-OS:17613
CARBP-1267-2018 (final).doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
COMMERCIAL ARBITRATION PETITION NO. 1267 OF 2018
Conso Feeds ]
Eara P.O., Neelamperoor, Alappuzha, ]
District 686534, represented by its Managing ]
Partner ]
...Petitioner
Versus
Alfa Laval (India) Pvt. Ltd. ]
Registered Office at Mumbai-Pune Road, ]
Dapodi, Pune – 411012, ]
Through its Managing Director ] ...Respondent
——————
Mr. Anil D’souza, Mr. Akash Rebello, Mr. Paras Gosar and Mr. Nadeem Shama for
the Petitioner.
Mr. Sharan Jagtiani, Senior Advocate a/w Mr. Rohil Bandekar, Mr. Nitin Khare,
Mr. Ritwik Kulkarni and Mr. Akhil Khupade for the Respondent.
——————
Coram : Sharmila U. Deshmukh, J.
Reserved on : 10th July, 2026.
Pronounced on : 6th August, 2026.
Judgment :
1. The present Petition filed under Section 34 of the Arbitration
and Conciliation Act, 1996 is at the instance of the original Claimant
being partly aggrieved by the impugned Award to the extent that the
Claims 15(2) to 15(8) have been held to be barred by Clauses 10 (a) and
(b) of Techno Commercial Agreement dated 10 th September, 2014 and
capped by the Arbitrator to the extent of the amount of the Bank
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Guarantee which is invoked and encashed by the Claimant.
2. The arbitration agreement was invoked by the Claimant seeking
resolution of disputes which arose between the parties under an
Agreement of 10th September, 2013 executed between the Claimant
and the Respondent for the purchase and installation of fishmeal
plant.
3. The Petition sets out that by purchase order of 11 th September,
2013 read with Techno Commercial Agreement dated 10 th September,
2013, the Claimant had purchased fishmeal plant from the
Respondent, which the Respondent was required to supply, erect and
commission. Despite various attempts, the plant could not be
commissioned solely due to the faulty design and equipment supplied
by the Respondent and the Claimant called upon the Respondent to
take back the plant. As there was no refund of the price of the plant as
initially claimed by the Claimant, arbitration was invoked. In the Section
11 application, the learned Sole Arbitrator came to be appointed by
this Court.
4. The statement of the claim (SOC) sets out that the pursuant to
the discussions and negotiations, on 10th September, 2013, the
Respondent submitted the final quotation with detailed payment
terms and in response thereof, on 11th September, 2013, the Claimant
issued the purchase order, which was confirmed. The entire payment of
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the purchase order was paid in time aggregating to Rs. 4,94,49,669/-
and Bank guarantee was issued in favor of the Respondent in the sum
of Rs. 2.45 crores representing the balance payment and performance
guarantee was given by the Respondent in favor of the Claimant. As
per the Agreement, the erection and the commissioning of the fish
meal plant was to be completed by 31 st March, 2014, which was
delayed for reasons attributable to the Respondent. On 5 th September,
2014, the Respondent invoked the Bank guarantee which would have
expired only on 24th September, 2014. On 19th September, 2014, the
first trial run of the plaint was conducted, which failed. The email
correspondences are relied upon to substantiate that the subsequent
eight production trials till 12th December, 2014 also failed.
5. The Claimant had availed financial assistance to the tune of
7,06,75,777/- from Federal Bank in addition to incurring huge interest
amount to the tune of Rs. 2,01,41,515/-. The claim under various heads
was for sum of Rs. 17,64,81,771/-.
6. In its Written Statement-cum-Counterstatement of claim, the
Respondent claimed that the Respondent could not erect and install
the plant immediately as the site was not ready. The provisions of
utilities could be made only in September, 2014 when the first trial was
conducted. The Claimant failed to supply sufficient quantity of raw
material to run the plaint at its optimum level. The commercial
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operation of the plant commenced on 12 th November, 2014 without
any interruption and that there was non-compliance of the conditions
imposed by the Kerala Pollution Control Board for operating the said
plant, which was violated resulting in pollution. The Claimant in
collusion with the ICICI Bank got the performance bank guarantee
encashed fraudulently much before the expiry date and further sent a
legal notice on 21st October, 2015 demanding sum of Rs.
16,46,34,828/-. There was successful and satisfactory commission and
performance trial of the fishmeal plant giving no cause of action for
any liability upon the Respondent. The counter claim of the
Respondent was for a sum of Rs. 44,50,000/- plus interest at the rate of
15% per annum being encashment of performance bank guarantee by
the claimant.
7. The Learned Arbitrator held that there was breach of contract by
the Respondent and the Claimant had performed its part of obligation
under the Techno Legal Commercial Agreement dated 10 th September,
2013 and Purchase Order dated 11th September, 2013. It further held
that the Claimant had rightly invoked the performance bank guarantee
and answered the counter claim against the Respondent. Insofar as the
claim for Rs 17,64,81,771/- is concerned, the learned Arbitrator
directed refund of purchase price of Rs. 4,45,00,000/- with interest
therein at the rate of 9% p.a. from the date of Award till the payment
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and realization and upon such payment, the Respondent was entitled
to take back its supplies and equipment from the Claimant’s site of the
fishmeal plant, within a period of six months from the date of payment.
The claims from 15(2) to 15(8) were held to fall within the ambit of
Clause 10(a) and (b) of the general terms and conditions in Section VI of
the Techno Commercial Agreement and held to be limited to amount
of the bank guarantee which was invoked and encashed by the
Claimant.
8. Mr. D’souza, learned counsel appearing for the Petitioner would
point out that the claims 15(2) to (7) were in respect of excise duty,
sales tax, freight charge, etc. which were incurred by the Claimant
towards the installation of the plant. He would further point out the
relevant Issue No 5 as to the entitlement of the Claimant to the sum of
Rs.17,64,81,771/- or any part thereof. He submits that as the Arbitrator
has directed the refund of the purchase price of the plant, it is
accepted that there is a breach of contract by the Respondent. He
would submit that as the breach has been admitted, there was no
question of application of clause 10(a) and 10(b) of the Agreement to
direct losses. He submits that the claims raised by the claimant were
not indirect, but actual expenses incurred and not a claim based on
reimbursement of actual expenses. He submits that the defense of the
claims being barred by Clause 10(a) is not the pleaded case of the
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Respondent and therefore the Claimant did not have an opportunity of
dealing with the same.
9. He would submit that there is an inherent contradiction in the
Award by pointing out that the learned Arbitrator while rejecting other
claims held it to be barred by Clause 10(a) of the Techno Commercial
Agreement contrary to its own finding that Clause 10(a) was attracted
only after the machinery was supplied and commissioned. He submits
that as the Tribunal has held that the plant has not commissioned,
there is no question of clause 10(a) being applied to the present case.
He has taken this Court in detail through the findings of the Arbitrator
in paragraph 126 to 136 and 147 of the Award. He submits that the
claim towards payment of interest under Claim 15(7) cannot be
construed to be an indirect or consequential damage or liability as
provided in Clause 10 and according to him, there is error in not
awarding interest from date of payment of purchase price and
pendente lite. He submits that by the clarificatory order passed under
Section 33 of Arbitration Act, the Arbitrator has clarified that interest
pendente lite has not been granted. He submits that once the
Arbitrator comes to a conclusion that damages are payable due to
failure to commission the plant, damages by way of interest from date
of payment of purchase price and pendente lite has to follow. He
submits that the Claimant is entitled to interest on all the claims as
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provided in Section 31(7) of the Arbitration Act and the refusal to
award such interest is against the public policy of India and liable to be
set aside.
10. He submits that Claims 15(2) to 15(7) cannot be treated as
consequential damage or loss of profit as a matter of fundamental and
substantive law of India. He submits that it is not a question of
interpretation of contract, but a matter of application of substantive
law. He submits that any finding to the contrary will be perverse,
patently illegal as well as violative of public policy. He submits that the
loss on account of payment of excise duty, sales tax, freight charges,
etc. were clearly direct and not consequential loss and once the
Arbitrator arrives at a conclusion that Clause 10(a) relates only to
consequential damages, he could not have excluded Claims 15(1) to
15(7). He submits that the claims being direct damages were not
capable of being excluded by Clause 10(a) and ought have been
allowed.
11. He would further submit that upon plain reading of the
Agreement, clause 10(a) and (b) is superseded by warranty clause and
offer letter dated 10th September, 2014 by virtue of clause 10(h) as per
the general terms and conditions. He submits that the warranty clause
makes it clear that the Respondent is not responsible for any
consequential or indirect damages and by providing an express clause
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for damages in the main Agreement, Clause 10(a) and (b) stands
excluded.
12. He submits that the Petitioner’s claim is for expenses as well as
loss of profits which are direct damages and Claim 15(8) which is loss of
business opportunity is a direct damage and not an indirect damage.
He submits that the Arbitrator erred in rejecting the arguments of the
Claimant that the rule of contra proferentem must apply to the
interpretation of clause 10(a). He submits that the contract must be
interpreted against the person who has drafted the contract and in the
present case, the offer sheet has been prepared by the Respondent
and must be interpreted against the Respondent.
13. He submits that the reading of the Tribunal of Clause 10(a)
amounts to rewriting of the contract between the parties and is an
error apparent on the face of record, perverse and illegal. He submits
that the interpretation of the Arbitrator of clause 10(a) of the contract
is an impossible interpretation which would warrant interference under
Section 34 of Arbitration Act.
14. He would further submit that the written statement of the
Respondent does not speak of limitation of liability and despite
thereof, the Arbitrator has limited the liability to the extent of bank
guarantee. He submits that the claims set out in paragraph 130 of the
Award have been accepted by the Arbitrator, however, the Arbitrator
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has limited the same to the amount of Bank guarantee, which is a
perverse finding. In support, he relies upon the following decisions :
Deepak Fertiliser and Petrochemical Corporation vs.
Davy Mckee (London) Ltd.1
Union of India vs. Saraswat Trading Agency2
South East Asia Marine Engineering and
Constructions Ltd. vs. Oil India Ltd.3
Delhi Metro Rail Corporation Ltd. vs. Delhi Airport
Metro Express Pvt. Ltd.4
15. Per contra, Mr. Jagtiani, learned Senior Advocate appearing for
the Respondent would submit that the apart from refund of purchase
price, the other claims were in the nature of damages for the breach of
the contract. He submits that the contention that the Respondent has
not taken the defence of Claims 15(2) to 15(8) being excluded by
Clause 10, cannot be entertained by Section 34 Court as it would
amount to re-appreciation of evidence. He submits that it is well
settled that the Arbitrator is the best judge of the quality and quantity
of evidence. He further points out that the Respondent has specified
that its liability as per the agreed terms is restricted to the
performance guarantee and the Claimant had sufficient notice about
denial of its claim by reason of Clause 10(a) of the Agreement.
16. He would further submit that the entire submissions of Mr.
1 (1998) EWCA Civ 1753.
2 (2009) 16 SCC 504.
3 (2020) 5 SCC 164.
4 (2024) 6 SCC 357.
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D’souza is to assail the interpretation of the contract by the Arbitrator,
which is impermissible in Section 34 Petition. He submits that the view
taken by the Arbitrator being a possible view cannot be interfered and
substituted by view of this Court. He has taken this Court to Clause
10(a) of the Agreement to contend that the same is divided in two
parts and in the first part damages on account of the specified
eventualities are excluded from the Respondent’s liability and second
part capped the liability of the Respondent at the value of
performance bank guarantee. He submits that it is also a possible
interpretation that the warranty clause does not supersede Clause 10
of general terms and condition. He submits that the Award is founded
on interpretation of the terms of the contract and there is no issue of
violation of fundamental and substantive law of India.
17. He would further submit that power of the Arbitrator to award
pre-reference interest, pendente lite interest, and post award interest
under Section 31(7) is well settled and the relief sought in the present
case was to award future interest and costs against the Respondent.
He submits that the Arbitrator by the additional award has declined the
Claimant’s relief of grant of pendente lite interest. He submits that
discretion has been rightly exercised by the arbitrator, no interference
is warranted. To support his contentions, reliance is placed on the
following decisions:
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Securitrans India Pvt. Ltd. vs. FIS Payment
Solutions and Services Pvt. Ltd.5
United India Insurance Company Ltd. vs. UPL
Limited6
Thermax Ltd. vs. Rashtriya Chemicals and
Fertilizers7
Associate Builders vs. Delhi Development
Authority8
Oil and Natural Gas Corporation Ltd. vs. Saw Pipes
Ltd.9
Sangyong Engineering and Construction Company
Ltd. vs. National Highways Authority of India10
Larsen Air Conditioning and Refrigration Company
vs. Union of India11
Batliboi Environmental Engineers Ltd. vs.
Hindustan Petroleum Corporation Limited12
Reliance Infrastructure Limited vs. State of Goa13
S. V. Sundaram vs. State of Karnataka14
Rajasthan State Mines and Minerals Ltd. vs.
Eastern Engineering Enterprises15
Associated Engineering Co. vs. Government of
Andhra Pradesh16
5 Judgment dated 23.12.2023 passed in CARBP No. 750 of 2024.
6 2026 SCC OnLine Bom 2679.
7 2025 SCC Online Bom 5010.
8 (2015) 3 SCC 49.
9 (2003) 5 SCC 705.
10 (2019) 15 SCC 131.
11 2023 SCC OnLine SC 982.
12 (2024) 2 SCC 375.
13 (2024) 1 SCC 479.
14 (2024) 3 SCC 623.
15 (1999) 9 SCC 283.
16 (1991) 4 SCC 93.
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Ramnath International Construction (P) Ltd. vs.
Union of India17
Vilayati Ram Mittal (P) Ltd. vs. Reserve Bank of
India18
John Peter Fernandes vs. Saraswati Ramchandra
Ghanate since deceased and Others19
Pam Developments Private Limited vs. State of
West Bengal20
UHL Power Company Limited vs. State of Himachal
Pradesh21
Dyna Technologies Private Limited vs. Crompton
Greaves Limited22
Parsa Kente Collieries Limited vs. Rajasthan Rajya
Vidyut Utpadan Nigam Limited23
Rashtriya Ispat Nigam Limited vs. Dewan Chand
Ram Saran24
South East Asia Marine Engineering and
Constructions Limited vs. Oil India Limited25
Morgan Securities and Credits Private Limited vs.
Videocon industries Limited26
Hyder Consulting (UK) Limited vs. Governor, State
of Orissa through Chief Engineer27
Secretary, Irrigation Department, Government of
17 (2007) 2 SCC 453.
18 2017 SCC OnLine Bom 8479.
19 2023 SCC OnLine Bom 676.
20 2024 SCC OnLine SC 2247.
21 (2022) 4 SCC 116.
22 (2019) 20 SCC 1.
23 (2019) 7 SCC 236.
24 (2012) 5 SCC 306.
25 (2020) 5 SCC 164.
26 (2023) 1 SCC 602.
27 (2015) 2 SCC 189.
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Orissa vs. G. C. Roy28
NHAI vs. M. Hakeem29
S. V. Sundaram vs. State of Karnataka30
18. In rejoinder, Mr. D’souza would submit that there is a patent
illegality as Clause 10(a) does not include interest and therefore, the
Arbitrator could not have limited the claim for interest while capping
the liability. He submits that the Award is severable as claim 15(1) has
been granted and claim 15(2) to 15(8) has been rejected, which are
different heads of the claim and therefore, good part of the Award can
be retained while severing the bad part of the Award. He submits that
the decision in the case of OPG Power Generation Private Limited vs.
Enexio Power Cooling Solutions India31 will apply when the ultimate
conclusion is not disturbed and not when there is an inherent
contradiction and ultimate conclusion would change. He would further
distinguish the judgment on interest cited by Mr. Jagtiani to contend
that the bank interest claimed is pendente lite interest and Section
31(7) discretion has not been exercised. He submits that the bank
interest is raised as claim only to show what has been paid as interest.
19. Rival contentions now fall for determination.
20. At the heart of controversy is Clause 10(a) and (b) and Warantee
28 (1992) 1 SCC 508.
29 (2021) 9 SCC 1.
30 (2024) 3 SCC 623.
31 2024 INSC 711.
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Clause of the Techno-Commercial Agreement dated 10 th September,
2013. In so far as refund of purchase price is concerned, the Learned
Arbitrator has held that there is breach of contract by the Respondent
and had awarded refund of purchase price and rejected Claims 15(2) to
15(8). Claims 15(2) and 15(3) are claims for amounts of excise duty,
state tax, freight and insurance charges. Claim 15(4) is a claim for
expenses incurred for accommodation of Respondent’s engineers and
officials. Claim 15(5) is a claim for expenses incurred for upgradation of
infrastructure to suit contracted plant and supporting machinery
including drier. Claim 15(6) is claim for raw material cost for seven
trials. Claim 15(7) claims bank interest upto 31 st October, 2016 and
Claim 15(8) is damage suffered on account of business opportunity
loss, mental agony and loss of reputation.
21. In paragraph no. 15 of the SOC, the Claimant has set out various
claims against the Respondent, as under:
1. Price of the Plant Rs. 4,45,00,000.00
2. Excise Duty, Sales Tax Rs. 49,49,669.000
3. Freight charges and insurance Rs. 4,33,608.000
4. Expenses for accommodation of Alfalaval’s
Engineers and Officials Rs. 4,15,250.000
5. For up-gradation of infrastructure to suit
contracted Plant and supporting machinery
including drier Rs. 2,61,27,517.000
6. Raw Materials cost for seven trial runs Rs. 18,22,335.000
7. Bank interest upto 31.10.2016 Rs. 2,26,83,392.000
8. Damage suffered on account of business
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loss’ opportunity loss, mental agony and loss
of reputation limited to Rs. 8,00,00,000.00
Total Rs. 18,09,31,771.00
Less : Amount of performance Guarantee
enforced to mitigate the loss without
prejudice to any of the claims as above Rs. 44,50,000.00
Balance Payable Rs. 17,64,81,771.00
22. The Learned Arbitrator has held that Claims 15(2) to 15(8) fall
within the ambit of Clause 10(a) and capped the same to the limit of
bank guarantee. The general terms and conditions are contained in
Clause 10(a), 10(b), 10(h) of the Agreement dated 10 th September, 2013
and reads as under :
“10. General
a) Consequential Damages
We shall not be liable for any consequential damages,
loss of profit, costs and/or expenses if any incurred by
you or by any other person employed by you or
representing you directly or indirectly, any third party
obligations entered into by you or any statutory / legal
obligation, awards, damages, statutory or legal action,
costs or expenses in relation to the performance or any
other feature of the plant supplied and / or erected
and / or commissioned by us. Our obligation in this
contract including all causes and any representations
made by us to you shall not exceed the value of the
performance bank guarantee/corporate guarantee or
any other compensation agreed by us in the contract and
shall be applicable only to faults noticed and not
corrected in the performance of the equipment during
the warranty period. All the obligations under the
warranty period given by us shall be subject to your
operating the plant and equipment as per the agreed
method of operation as normally
understood/specifically mentioned by us. The
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performance warranty obligations are strictly subject to
the battery limits, exclusions and output parameters
mentioned in the contract.
b) Secondary Liability
Secondary liability such as indemnification for any loss
caused by stoppage of the plant or due to any other
reasons concerning this contract will under no
circumstances be acceptable to us and we shall not be
responsible for such losses.
h) Order of Precedence
Wherever any clauses as mentioned in this Contract are
partly or fully at variance with the General Terms and
Conditions of Sale, the printed form of which is
enclosed, then clauses specifically entered into as part
of this Contract shall have precedence and shall override
the corresponding clauses in the General Terms and
Conditions of Sale.”
23. The Respondent in paragraph 8 of its written statement cum
counterstatement of claim specifically denied the liability for any
consequential damages or any secondary liability, including
indemnification for any reason concerning the contract and capping of
the liability to the value of performance bank guarantee referrable to
Clause 10(a) and (b) of the contract. The impugned Award records at
paragraph 123, the case of the Respondent that the claims made in
paragraph 15 of SOC are in teeth of Clause 10(a) and (b) and in nature
of damages without any averments in support thereof by relying on
Section 73 of Contract Act. In paragraph 124, the submission of
Respondent is recorded that claims would be limited to warranty
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clause and there is no clause for refund. The defence of the
Respondent was that none of the claims could be granted by the
Learned Arbitrator as Clause 10(a) and 10(b) of the contract excluded
the claims. The Respondent denied even Claim 15(1) seeking refund of
purchase price.
24. In the background of such submission, the Learned Arbitrator
considered whether Clause 10(a) and (b) can be pressed into service by
the Respondent to oppose the claims made by the Claimant and held in
paragraph no. 126 as under:
“126. The next question, then is, whether Clause 10 (a) and
(b) forming part of the General Terms and Conditions in
Section V of the Techno Commercial Agreement dated
10.9.2013 and the clause relating to Warantee in Section IV
of the said document relating to Price Schedule &
Commercial Terms and Conditions can be pressed into
service by the Respondent to oppose the claims made by the
Claimant. In my opinion, a reading of the two clauses, it will
be seen that the clause relating the Consequential Damages
and Secondary Liability would apply in the event of the fish
meal plant being supplied as contracted and it being
commissioned by the Respondent and got ready for
commercial operations without any defects or operational
glitches. It is not material that the plant was not operated at
the fullest capacity for any reason, but in the present case
the plant was not able to function satisfactorily and certainly
not demonstrated to be fit for commercial operations, free
from any defect or deficiencies, which were found in one
area or the other. Clause 10(a) of the Agreement dated
10.9.2013 dealing with Consequential Damages relates to
indirect damages and not damages or compensation arising
out of the direct consequences of the Respondent's failure
to perform its obligations under the contract of supplying a
functional fishmeal plant which can be taken to smooth
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commercial operations. At the highest, Clause 10(a) of the
Techno Commercial Agreement will restrict only to the
consequential or indirect damages or the damages
mentioned in the said clause. However, this clause is also
inclusive of certain foreseeable losses mentioned therein
(which can be termed as direct consequences) and have been
factored in by the parties for the purpose of exclusion. In my
opinion, the claims of the Claimant on account of loss of
profit, costs and expenditure incurred on the provision of
raw materials for the trials, etc would fall within the ambit of
this clause, since notwithstanding the fact they are included
under the clause relating to consequential damages, they
find place in the limitations on liability covered by the said
clause and are intended to be part of the limited liability of
the Respondent. Damages on account of direct consequence
of the breach of the contract or non-performance of the
contract which fall outside the specified consequences or
other than those specified only will not fall within the ambit
of either of the clauses 10(a) and 10(b). The claimant will
therefore be entitled to claim only such damages for direct
losses or compensation as is warranted and not specifically
excluded on account of breach of contract and the failure to
perform the contract by the Respondent. I do not agree with
the submission of the Counsel for the Claimant, that the
doctrine of contra-proferentum should be applied in the
facts of the present case to interpret the contract against
the Respondent, or to hold that the Claimant was not aware
of this clause in the agreement, it not having been brought
to its notice, as there is no material on record to support this
argument.
25. It would also be apposite to reproduce paragraph 129 and 130
of the Award which reads as under:
“129. As mentioned before the Claimant has claimed
a total amount Rs. 17,64,81,771.00 from the
Respondent as a sum total of the various heads of
claim. The first claim of Rs. 4,45,00,000/- being the
price of the plant. There is no dispute that the
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Respondent has received the said amount from the
Claimant. Having held that the Respondent has
failed to supply, erect, commission and provide a
fishmeal plant as contemplated under the Contract
between the parties, Claimant is presently saddled
with the equipment which it is not in a position to
use or operate. The Respondent having failed to
provide a plant as per the contract, the Claimant will
be entitled to compensatory damages as a direct
result of its failures. I do not read the Clauses in the
agreement relating to consequential damages and
warrantee to hold that such compensation is barred
or excluded and there is no specific bar (as was in the
case law relied upon by the Counsel for the
Respondent) to the grant of compensation for the
direct loss arising on the failure of the Respondent.
In my view, the loss of price paid for the defective
and deficient supply, erection and defaults in setting
up and commissioning the fish meal plan is a direct
consequence of the Respondent's failure and the
Claimant is entitled to be compensated for it. I
therefore hold that the Respondent is liable to pay
to the Claimant the amount of Rs.4,45,00,000/ as
compensation. The claimant will be entitled to
interest at the rate of 9% p.a. from the date of the
Award till payment and realisation.
130. The claims under the other heads viz. Claim of
Rs. 49,49,669/ towards of payment of excise duty,
sales tax etc i.e. claim 15(2); Claim of Rs. 4,33,608/
towards freight charges and insurance i.e. Claim 15
(3); Claim of Rs. 4,12,250 towards expenses for the
accommodation of Alfa Laval's engineers and
officials i.e. Claim 15 (4); Claim of Rs. 2,61,27,517/
towards upgradation of infrastructure to suit
contracted plant and supporting machinery; Claim of
Rs. 18,22,335/ towards raw materials for the cost of
seven trial runs i.e. Claim 15(6); claim of
Rs.2,26,83,392/ towards bank interest upto
31.10.216 i.e. Claim 15(7); and Rs.8,00,00,000/
towards damage suffered on account of business
loss, opportunity loss, mental agony, and loss of
reputation i.e. Claim 15(8), would, in my opinion, all
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fall within the ambit of Clause 10(a) and (b) of the
General Terms and Conditions in Section VI of the
Techno Commercial Agreement. These claims are
limited to the amount of the bank guarantee which
is invoked and encashed by the Claimant.”
26. The learned Arbitrator has interpreted Clause 10(a) to be
restricted to consequential or indirect damages, damages specified
therein and even direct consequences for purpose of exclusion. Clause
10(a) specified loss of profits, cots/expenses, statutory obligation
apart from consequential/indirect damages. The latter portion of
Clause 10(a) restricted the liability to extent of performance
guarantee. By reason of specific mention of loss of profits, costs and
expenses, etc. in clause 10(a), though under the heading of
consequential damages, the learned Arbitrator has held that the Claims
15(2) to 15(8) fall within ambit of Clause 10(a) and capped to the limit
of performance bank guarantee. The learned Arbitrator has
interpreted Clause 10(a) as an agreement between the parties
specifying certain liabilities of the Respondent to be limited to the
extent of performance bank guarantee.
27. A case of inconsistency in paragraph 126 of the Award is sought
to be raised by Mr. D’souza contending that in first part of paragraph
126, the Learned Arbitrator has held that Clause 10(a) and (b) do not
apply to the present case on account of non commissioning of the
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plant as contracted, whereas in the second part of paragraph 126, the
Arbitrator has denied the claims of Claimant by taking recourse to
Clause 10(a). A conjoint reading of paragraph 126, 129 and 130 would
disclose that the Learned Arbitrator has first put all claims in the
basket of Clause 10(a) and (b) of contract in view of the defence that
none of the claims can be granted by reason of the said Clause.
Thereafter by an interpretative process, the Learned Arbitrator has
analysed the claims in the context of Clause 10(a) and (b) to hold that
Claim 15(1) pertaining to refund of purchase price is a direct result of
the failure of Respondent to provide the plant and would not be
covered by the contract clauses relating to consequential damages and
warrantee to hold that such compensation is barred or excluded.
Though a contention was raised about Section 73 of Contract Act, the
Learned Arbitrator has granted Claim 15(1) by interpreting Clause 10(a)
for its exclusion from the said clause. The learned Arbitrator has not
applied the principles of Section 73 of Contract Act to grant Claim
15(1), but has interpreted Clause 10(a) to hold that the claim 15(1) is
direct result of failure which will not be covered by clause of
consequential damages and warantee. It is pertinent to note that there
is no sequiter to the finding in the first part of paragraph 126. The
Claimant is a beneficiary of the interpretation of Clause 10(a) as the
learned Arbitrator has ruled that the claim for refund of purchase price
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does not form part of consequential damages and is direct result of the
failure.
28. The second portion of paragraph 126 of the Award read with
paragraph 129 and 130 makes it abundantly clear that Clause 10(a) is
held to be applicable to the claims raised by the Claimant. If the Award
is read as a whole, the same clearly proceeds on the applicability of
clause 10(a) and renders findings on various claims raised by the
Claimant. The interpretation placed by the learned Arbitrator on
Clause 10(a) as recorded in second part of paragraph 126 is not only a
possible interpretation but it appeals to this Court. In the case of
Securitrans India Pvt. Ltd. vs. FIS Payment Solutions and Services
Pvt. Ltd. (supra), the Co-ordinate Bench has held that the Award has to
be read in its entirety and finding of perversity can be recorded when
there are absolutely no reasons for reaching the conclusion. Such is not
the case here.
29. The first part of Clause 10(a) of contract excludes the liability of
Respondent in respect of (a) consequential damage (b) loss of profit (c)
costs and/or expenses incurred by the Claimant (d) statutory obligation
(e) awards, (f) damages (g) statutory or legal action and (g) costs or
expenses in relations to performance or any other feature of the plant
supplied and/or erected. The learned Arbitrator has interpreted this
clause to grant Claim 15(1) and to cap Claim 15(2) to 15(8) to the
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extent of performance bank guarantee.
30. The rejection of Claim 15(2) to 15(8) to the fullest extent is
assailed as being violative of fundamental and substantive law. In Vijay
Karia and Others vs Prysmian Cavi E Sistemi SRL and Others 32, the
Hon’ble Apex Court has held that the fundamental policy of Indian law
must amount to breach of some legal principle or legislation which is
so basic to Indian law that it is not susceptible of being compromised.
“Fundamental Policy” refers to the core values of India’s public policy
as a nation, which may find expression not only in statutes but also
time-honoured, hallowed principles which are followed by Courts.
31. It is therefore not permissible for the Court to interfere even
when there is breach of substantive law and it must be shown that the
law so breached forms bedrock of Indian law. The present case is a case
of interpretation of terms of the contract and whether the claims
stands excluded by an agreement between the parties. Even accepting
for the moment that the Claimant, under the law, would be entitled to
such claims in the event of breach by the Respondent, it is open for the
parties to arrive at an arrangement by which, the liability is excluded
and limited. This is precisely the interpretation of Clause 10(a) of
contract by learned Arbitrator. Mr. D’souza would contend that claims
of the Claimant were not indirect but actual expenses incurred. The
32 AIR 2020 SC 1807.
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submission would require this Court to interpret the nature of claims,
whether consequential or direct, and substitute its own interpretation
with the interpretation of the Learned Arbitrator, which is
impermissible. It is within the jurisdiction of the Learned Arbitrator to
interpret the terms of the contract and the view taken is a possible
view that Claims 15(2) to 15(8) are covered by Clause 10(a) to the
extent of performance guarantee. Clause 10(a) specifically mentions
loss of profit, costs and/or expenses, statutory obligations for purpose
of exclusion and limits it only to the performance guarantee. Section 5
of Arbitration Act must be given its full effect to minimise judicial
intervention when the view cannot be said to be impossible. It is not
only a plausible view, but a possible view which is required to be
upheld.
32. In the case of Vilayati Ram Mittal (P) vs. Reserve Bank of India
(supra), the Hon’ble Division Bench of this Court has held that it is for
the Arbitrator to decide the effect of the clause and deal with the
same. In that case by virtue of the clause, the contractor was not held
to be entitled for any loss suffered on account of delay and the Hon’ble
Division Bench has held that this clause binds both the parties and it is
not open for the Appellant therein to construe clause 18 so as to seek
the benefit and contend that the clause is binding between the parties
but do not bind the Arbitrator or the Court. It further held that if the
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clause specifically prohibits any claim on the account of delay, by
ignoring the said clause, the Arbitrator cannot travel beyond his
jurisdiction as that would constitute the jurisdictional error.
33. In the case of UHL Power Company Limited vs. State of H. P.
(supra), the Hon’ble Apex Court has held in paragraph 18, 19 and 22 as
under :
“18. It has also been held time and again by this Court that
if there are two plausible interpretations of the terms and
conditions of the contract, then no fault can be found, if
the learned arbitrator proceeds to accept one
interpretation as against the other. In Dyna Technologies
(P) Ltd. v. Crompton Greaves Ltd. [Dyna Technologies (P) Ltd.
v. Crompton Greaves Ltd., (2019) 20 SCC 1], the limitations
on the Court while exercising powers under Section 34 of
the Arbitration Act has been highlighted thus : (SCC p. 12,
para 24)
“24. There is no dispute that Section 34 of the
Arbitration Act limits a challenge to an award
only on the grounds provided therein or as
interpreted by various Courts. We need to be
cognizant of the fact that arbitral awards
should not be interfered with in a casual and
cavalier manner, unless the Court comes to a
conclusion that the perversity of the award
goes to the root of the matter without there
being 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.”
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19. In Parsa Kente Collieries Ltd. v. Rajasthan Rajya Vidyut
Utpadan Nigam Ltd. [Parsa Kente Collieries Ltd. v.
Rajasthan Rajya Vidyut Utpadan Nigam Ltd., (2019) 7 SCC
236 : (2019) 3 SCC (Civ) 552] , adverting to the previous
decisions of this Court in McDermott International Inc. v.
Burn Standard Co. Ltd. [McDermott International Inc. v.
Burn Standard Co. Ltd., (2006) 11 SCC 181] and Rashtriya
Ispat Nigam Ltd. v. Dewan Chand Ram Saran [Rashtriya
Ispat Nigam Ltd. v. Dewan Chand Ram Saran, (2012) 5 SCC
306], 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 : (Parsa
Kente Collieries case [Parsa Kente Collieries Ltd. v.
Rajasthan Rajya Vidyut Utpadan Nigam Ltd., (2019) 7 SCC
236 : (2019) 3 SCC (Civ) 552] , SCC pp. 244-45, para 9)
“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 that no
fair-minded or reasonable person could do. It
is further observed by this Court in the
aforesaid decision in para 33 that when a court
is applying the “public policy” test to an
arbitration award, it does not act as a court of
appeal and consequently errors of fact cannot
be corrected. A possible view by the arbitrator
on facts has necessarily to pass muster as the
arbitrator is the ultimate master of the
quantity and quality of evidence to be relied
upon when he delivers his arbitral award. It is
further observed that thus an award based on
little evidence or on evidence which does not
measure up in quality to a trained legal mind
would not be held to be invalid on this score.
9.2. Similar is the view taken by this Court in
NHAI v. ITD Cementation India Ltd. [NHAI v. ITD
Cementation India Ltd., (2015) 14 SCC 21 :
(2016) 2 SCC (Civ) 716], SCC para 25 and SAIL v.
Gupta Brother Steel Tubes Ltd. [SAIL v. Gupta
Brother Steel Tubes Ltd., (2009) 10 SCC 63 :
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(2009) 4 SCC (Civ) 16] , SCC para 29.”
(emphasis supplied)
22. In the instant case, we are of the view that the
interpretation of the relevant clauses of the
implementation agreement, as arrived at by the learned
sole arbitrator, are both, possible and plausible. Merely
because another view could have been taken, can hardly
be a ground for the learned Single Judge to have
interfered with the arbitral award. In the given facts and
circumstances of the case, the appellate court has rightly
held that the learned Single Judge exceeded his
jurisdiction in interfering with the award by questioning
the interpretation given to the relevant clauses of the
implementation agreement, as the reasons given are
backed by logic.”
34. The scope of interference under Section 34 of the Arbitration Act
is well-settled. In Associate Builders vs. Delhi Development Authority
(supra), the Hon’ble Apex Court has held in paragraph 42.3, 44 and 45
as under :
“42.3. (c) Equally, the third subhead of patent illegality is
really a contravention of Section 28(3) of the Arbitration
Act, which reads as under:
“28.Rules applicable to substance of dispute.
—(1)-(2)***
(3) In all cases, the Arbitral Tribunal shall decide
in accordance with the terms of the contract
and shall take into account the usages of the
trade applicable to the transaction.”
This last contravention must be understood
with a caveat. An Arbitral Tribunal must decide
in accordance with the terms of the contract,
but if an arbitrator construes a term of the
contract in a reasonable manner, it will not
mean that the award can be set aside on this
ground. 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 that
no fair-minded or reasonable person could do.
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In MSK Projects (I) (JV) Ltd. v. State of Rajasthan [(2011)
10 SCC 573 : (2012) 3 SCC (Civ) 818] , the Court held : (SCC
pp. 581-82, para 17)
“17. If the arbitrator commits an error in the
construction of the contract, that is an error
within his jurisdiction. But if he wanders
outside the contract and deals with matters
not allotted to him, he commits a jurisdictional
error. Extrinsic evidence is admissible in such
cases because the dispute is not something
which arises under or in relation to the contract
or dependent on the construction of the
contract or to be determined within the award.
The ambiguity of the award can, in such cases,
be resolved by admitting extrinsic evidence.
The rationale of this rule is that the nature of
the dispute is something which has to be
determined outside and independent of what
appears in the award. Such a jurisdictional error
needs to be proved by evidence extrinsic to the
award. (See Gobardhan Das v. Lachhmi Ram
[(1954) 1 SCC 566 : AIR 1954 SC 689], Thawardas
Pherumal v. Union of India [AIR 1955 SC 468],
Union of India v. Kishorilal Gupta & Bros. [AIR
1959 SC 1362], Alopi Parshad & Sons Ltd. v.
Union of India [AIR 1960 SC 588] , Jivarajbhai
Ujamshi Sheth v. Chintamanrao Balaji [AIR 1965
SC 214] and Renusagar Power Co. Ltd. v. General
Electric Co. [(1984) 4 SCC 679 : AIR 1985 SC
1156] )”
(emphasis supplied)
In Rashtriya Ispat Nigam Ltd. v. Dewan Chand Ram Saran
[(2012) 5 SCC 306] , the Court held : (SCC pp. 320-21,
paras 43-45)
“43. In any case, assuming that Clause 9.3 was
capable of two interpretations, the view taken
by the arbitrator was clearly a possible if not a
plausible one. It is not possible to say that the
arbitrator had travelled outside his jurisdiction,
or that the view taken by him was against the
terms of contract. That being the position, the
High Court had no reason to interfere with the
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award and substitute its view in place of the
interpretation accepted by the arbitrator.
(emphasis supplied)
44. The legal position in this behalf has been
summarised in para 18 of the judgment of this
Court in SAIL v. Gupta Brother Steel Tubes Ltd.
[(2009) 10 SCC 63 : (2009) 4 SCC (Civ) 16] and
which has been referred to above. Similar view
has been taken later in Sumitomo Heavy
Industries Ltd. v. ONGC Ltd. [(2010) 11 SCC 296 :
(2010) 4 SCC (Civ) 459] to which one of us
(Gokhale, J.) was a party. The observations in
para 43 thereof are instructive in this behalf.
45. This para 43 reads as follows : (Sumitomo
case [(2010) 11 SCC 296 : (2010) 4 SCC (Civ) 459]
, SCC p. 313)
‘43. … The umpire has considered the fact
situation and placed a construction on the
clauses of the agreement which according to
him was the correct one. One may at the
highest say that one would have preferred
another construction of Clause 17.3 but that
cannot make the award in any way perverse.
Nor can one substitute one's own view in such a
situation, in place of the one taken by the
umpire, which would amount to sitting in
appeal. As held by this Court in Kwality Mfg.
Corpn. v. Central Warehousing Corpn. [(2009) 5
SCC 142 : (2009) 2 SCC (Civ) 406] the Court
while considering challenge to arbitral award
does not sit in appeal over the findings and
decision of the arbitrator, which is what the
High Court has practically done in this matter.
The umpire is legitimately entitled to take the
view which he holds to be the correct one after
considering the material before him and after
interpreting the provisions of the agreement. If
he does so, the decision of the umpire has to be
accepted as final and binding.”
(emphasis supplied)
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35. The settled position in law prohibits Section 34 Court from
substituting its own view in place of Arbitrator’s interpretation. The
error in construction is considered as an error within jurisdiction, which
does not warrant interference. In my view, the interpretation of Clause
10(a) of the contract by the impugned Award cannot be said to be an
impossible view.
36. In so far as the supersession of Clause 10 by warrantee clause is
concerned, the learned Arbitrator held in paragraph nos. 127 as under :
127. In so far as the clause of Warantee is concerned, it
will not apply in the present case as the plant is
admittedly not commissioned or handed over to the
Claimant. Respondent has never called upon the Claimant
to take over the plant and as asserted by the Claimant in
its mails, the responsibility in supplying the plant
remained with the Respondent. The contract between
the parties is not for the supply of individual parts or only
equipment. In my opinion the clause of Warantee will
apply only after the commissioning of the plant as agreed
by the parties, which has not happened. This will also
include handing over an operational plant to the
Claimant. I find this because the warrantee is subject to
certain conditions which show that the plant should be in
the entire charge and operations of the purchaser i.e. the
Claimant. This clause also reiterates that the Respondent
shall not be responsible for any consequential or indirect
damages only and does not cover direct damages. These
clause do not, in my reading, absolve the Respondent on
liability arising on account of direct damages or
compensation on account of direct consequences.”
37. The warrantee clause warrantee all equipment offered by
Respondent against the material, workmanship, manufacturing defects
for period of 12 month and that Respondent shall not be responsible
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for any consequential or indirect damages. The contention is that there
is an express clause for damages in the main agreement and therefore
Clause 10(a) and (b) stands excluded by virtue of Clause 10(h) of the
contract as the warantee clause excludes only consequential damages.
The warantee clause binds the Respondent against defects specified
i.e. against material, workmanship and manufacturing defects for
particular period. The clause being a warantee clause, the Learned
Arbitrator has held that the same would not apply as the plant is not
commissioned and handed over, which cannot be interfered with.
38. Insofar as the claim on account of interest is concerned, the
submissions are conflated in as much the interest sought as Claim 15(7)
is characterised as interest pendente lite as well as a direct
consequence of the breach suffered by the Respondent. Mr. D’souza
would contend that the Claim 15(7) which is Bank interest upto 31 st
October, 2016 paid on financial loan which has been obtained by the
Claimant, should have been granted as interest pendente lite. The
concept of interest pendente lite is different from interest claimed as
head of loss and as a direct consequence of breach. In the present case,
Claim 15(7) is claimed as head of loss and not as interest pendente lite
and the award of interest pendente lite would constitute interest for
the period from filing of the statement of claim till the Award of
Arbitrator. In the application under Section 33, the claim was for
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payment of interest pendente lite, which has been declined by Learned
Arbitrator in exercise of its jurisdiction which meets the parameters of
Section 31(7) of the Arbitration Act. The Learned Arbitrator has
considered the claim of interest as indirect loss and has capped it
within the limited liability clause.
39. As far as the award of interest pendente lite is concerned, in the
case of Morgan Securities and Credits Private Limited vs. Videocon
Industries Limited (supra), the Hon’ble Apex Court considered the
expression “unless the Award otherwise directs“ in Section 31(7)(b) of
the Act to hold that wide discretion is conferred upon the Arbitrator to
determine the rate of reasonable pre-award interest.
40. Dealing with the citations relied upon by Mr. D’souza, in the case
of Deepak Fertiliser and Petrochemical Corporation vs. Davy Mckee
(London) Ltd. (supra), the England and Wales Court of Appeal was
considering an appeal arising under the Commercial Court in respect of
the contractual claims raised in that case. While dealing with the issue
as to whether the losses claimed are excluded from recovery by virtue
of clause 6.8 of the contract therein which provided that the party shall
not be liable for loss of anticipated profits, catalyst, raw-material and
products or for indirect or consequential damages by reason of which
all heads of claims against the party were held to be excluded. It was
held that direct and natural result of the destruction of plant was that
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the party was left without a methanol plant, wasted overheads
incurred during the reconstruction of the plant, as well as profits lost
during that period, which are no more remote as losses than the cost of
reconstruction. It held that the costs incurred cannot be categorized as
an indirect or consequential loss or damage nor could its cost be
categorized as constituting a loss of profit.
41. The distinguishing feature, in the present case, is the limited
powers vested in Section 34 Court, once the Arbitrator has interpreted
the terms of the contract which view cannot be said to be an
impossible view. In that case the proceedings arose out of Commercial
Court litigation which leaves the field wide open for the Appellate
Court to re-appreciate the findings.
42. In the case of Union of India vs. Saraswat Trading Agency and
Others (supra), the Hon’ble Apex Court considered the question of
interest for pre-reference period and dealt with the power of
arbitrator to award interest pendente lite and if so on what principles. It
held that the Arbitrator has the power to award interest pendente lite.
There is no quarrel with the said decision however, in the present case,
as discussed above, the claim for interest is claimed as a head of loss
and not as interest pendente lite. Further, Arbitrator in his discretion
declined to grant interest pendente lite.
43. In the case of South East Asia Marine Engineering and
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Constructions Limited vs. Oil India Limited (supra), the Hon’ble Apex
Court considered the scope of Section 34 of the Arbitration Act.
Pertinently, the Court noted the case of Dyna Technologies (P) Ltd. vs.
Crompton Greaves Limited33 and held that where two views are
possible, the Court cannot interfere in the plausible view taken by the
Arbitrator supported by reasoning. In the facts of that case, the
Hon’ble Apex Court did not subscribe the reasons provided by
Arbitrator or High Court as it failed to apply the standard of
consideration of all clauses of contract while interpreting clause 23 of
the contract therein. In that case, clause in question was in respect of
change in law which results in additional costs/reduction in cost to
contractor and which was required to be reimbursed. The Arbitral
Tribunal had held that clause must be liberally construed and any
circular of government circular would result in change in law. The High
Court reasoned that clause 23 is akin to force majeure clause. In such
facts, the Hon’ble Apex Court considered that the wide interpretation
by Arbitral Tribunal cannot be accepted and that document forming
the written contract shall be read as whole which was the basic rule
ignored by the Arbitral Tribunal while interpreting the contract. The
decision turned on the terms of the contract contained therein, which
is rendered in a different factual scenario. The decision cannot be cited
33 (2019) 20 SCC 1.
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as a proposition that even if the view taken is possible view, it is open
for Section 34 Court to substitute its own view.
44. In the case of Delhi Metro Rail Corporation Limited vs. Delhi
Airport Metro Express Pvt. Ltd. (supra), the Hon’ble Apex Court
considered the scope of interference with the Arbitral Award, with
which there is no quarrel.
45. The grounds on which the Award can be set aside are set out in
Section 34 of the Arbitration Act. The learned Arbitrator has
interpreted the terms of the contract to hold that claims 15(2) to 15(8)
of the claims raised by the Claimant are covered by clause 10(a) and are
capped at the limited liability of performance guarantee. The view
being possible view cannot be said to be patently illegal or so perverse
that no reasonable person could have arrived at the same. Perversity as
is settled is a finding based on no evidence and arrived at by ignoring
the vital evidence, which would be liable to be set aside under the head
of patent illegality. The error, if any, in construction of contract, is an
error within jurisdiction incapable of being corrected in Section 34
jurisdiction.
46. In light of the discussion above, I do not find the impugned order
to suffer from perversity or patent illegality or such as violates the
fundamental policy of Indian law.
47. Resultantly, the Arbitration Petition fails and stands dismissed.
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48. Nothing survives for consideration in pending Applications, if
any, and the same stand disposed of.
[Sharmila U. Deshmukh, J.]
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