2001 (2) TMI 1048 - SC - Indian Laws

Supreme Court upholds arbitration award in energy supply dispute, emphasizing arbitrators' authority

U.P.   State Electricity Board Versus M/s Searsole Chemicals Limited

The Supreme Court affirmed the High Court's decision upholding an arbitration award in a case concerning the supply of electrical energy. The appellant ... - Issues:1. Interpretation of agreement for supply of electrical energy.2. Validity of arbitration award.3. Consideration of interruptions in power supply.4. Compliance with Uttar Pradesh Electricity Order.Interpretation of Agreement for Supply of Electrical Energy:The case involved an agreement between the parties for the supply of electrical energy. The agreement specified the conditions under which the supply of energy would be provided, including the voltage, frequency, and power limits. Disputes arising from the agreement were referred to arbitration. The appellant contested the award made by the arbitrators, arguing that damages should not arise except in specific circumstances outlined in the agreement. The arbitrators considered evidence, including logbooks, to assess interruptions in power supply and the reasons behind them. The High Court upheld the award, emphasizing that the arbitrators' decision aligned with the agreement's terms and conditions.Validity of Arbitration Award:The arbitrators made an award for refund and compensation for losses due to interruptions in power supply caused by the appellant's negligence. The appellant challenged the award, claiming it was beyond the scope of the agreement. The High Court upheld the award, noting that the arbitrators had properly considered the evidence and terms of the contract. The court emphasized that where two views are possible, the arbitrators' decision prevails. The Supreme Court affirmed the High Court's decision, dismissing the appellant's appeal.Consideration of Interruptions in Power Supply:The interruptions in power supply were attributed to orders issued by the Uttar Pradesh government regulating energy consumption. The appellant argued that power cuts were a result of these orders, falling within the agreement's exceptions. The court examined the relevant government order and highlighted the necessity of providing evidence to support claims of power supply cuts. The absence of such evidence led the court to uphold the arbitration award, as the appellant failed to demonstrate compliance with the government order's requirements.Compliance with Uttar Pradesh Electricity Order:The case involved analyzing the interruptions in power supply in light of the Uttar Pradesh Electricity Order. The court emphasized the need for evidence to show adherence to the order's provisions regarding energy consumption cuts for industrial consumers. The lack of documentation supporting the appellant's claims resulted in the dismissal of the appeal. The court affirmed the lower courts' decisions, concluding that there was no justification for interfering with the arbitration award, which was upheld as a decree by the civil court and the High Court.