Arbitral award beyond contract was set aside where payment under the MoU was due to the company, not the director individually.

The supplementary MoU made the deceased claimant personally liable, on non-receipt of the Angolan payment, to pay the unrealised amount to M/s. Brawn Pharmaceuticals Ltd., and the arbitral award itself recorded that the amount was payable to that company. As the company was a separate legal entity and had not advanced any claim before the tribunal, a counter-claim could not be granted in favour of the director in his individual capacity. The award to that extent was therefore contrary to the contract and beyond the arbitral mandate, and was set aside.

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Issues: Whether the arbitral award could sustain a counter-claim in favour of the individual director when the supplementary agreement stipulated payment to the company, and whether the award to that extent travelled beyond the contract.

Analysis: The supplementary MoU expressly provided that, on non-receipt of the Angolan payment, the deceased claimant was personally liable to pay the unrealised amount of Rs. 49 lakhs to M/s. Brawn Pharmaceuticals Ltd. The award itself recorded that the amount was payable to that company. The company was a separate legal entity, distinct from its director, and no claim had been raised by the company before the arbitral tribunal. In these circumstances, the counter-claim could not have been granted in favour of the director in his individual capacity, as that would confer a benefit not contemplated by the contract.

Conclusion: The counter-claim award in favour of the respondent in his individual capacity was set aside as being contrary to the contract and beyond the arbitral mandate.

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