2017 (8) TMI 1720 - HC - Indian Laws

Arbitration award upheld despite challenge, costs set aside under contract clause, notice service findings deemed plausible

NOIDA CYBER PARK PVT. LTD. Versus BHAYANA BUILDERS PVT. LTD.

Delhi HC dismissed appellant's challenge to arbitration award. Court held that no pre-litigation interest was actually awarded, and appellant's counsel ... Amount awarded to the extent of award of interest and costs - claim petition filed by the respondent/claimant was time barred - wrongly taken the reply given by the appellant to the winding up petition filed by the respondent in the Company Court as an acknowledgment of liability. Whether the amount awarded to the extent of award of interest and costs is against the contract? - HELD THAT:- The learned counsel for the respondent before this Court has taken this Court to para 120 of the Award and it is seen that as per the total amount awarded under the Award there is no prelitigation interest awarded. This has been pointed out to the learned senior counsel for the appellant who concedes to this position. Therefore no argument remains with respect to alleged illegality in grant of pre-litigation interest in as much as no pre-litigation interest has been given by the Award - On the aspect of award of costs to the respondent/claimant the counsel for the respondent/claimant agrees that this award of costs be set aside in view of Clause 118.4 of the contract. Claim petition filed by the respondent being time barred - HELD THAT:- The issue before the Arbitration Tribunal was that whether notices dated 20.09.2010 and 28.09.2010 were served upon the appellant. Arbitration Tribunal in this regard has given detailed findings in paras 46 to 52 of the Award and as per which discussion and conclusion, Arbitration Tribunal has found that the notice Exhibit C-7 dated 20.09.2010 is duly sent to the appellant company by registered post and, therefore, there is presumption of service under Section 27 of the General Clauses Act, 1897. The Arbitration Tribunal also holds that this notice Exhibit C-7 dated 20.09.2010 is also additionally served upon C&MD of the appellant and it cannot be held that merely because the notice is sent to Logix Cyber Park, it was not received by the appellant inasmuch as another letter Exhibit C-9 shows that at this address itself appellant has been receiving notices. The law is well settled that the court hearing objections under Section 34 of the Act does not sit as an appellate court to re-apprise findings of facts and conclusions arrived at by the Arbitration Tribunal. Once the findings and conclusions of the Arbitration Tribunal are one possible and plausible finding and conclusion and such finding and conclusion is not in any manner grossly illegal or perverse, the court hearing objections under Section 34 of the Act will not substitute its view for that of the Arbitration Tribunal - Thus, no valid objections can be raised under Section 34 of the Act to question the service of the notices dated 20.09.2010 and 28.9.2010. Wrongly taken the reply given by the appellant to the winding up petition filed by the respondent in the Company Court as an acknowledgment of liability - HELD THAT:- The third issue, need not be commented upon by this Court once the issue of time limitation has been decided in favour of the respondent/claimant and against the appellant/objector. There is no merit in the appeal - Appeal dismissed. Issues:1. Appeal against the judgment dismissing objections under Section 34 of the Arbitration and Conciliation Act, 1996.2. Validity of the Arbitral Award granting interest and costs against the contract.3. Timeliness of the claim petition filed by the respondent.4. Recognition of the acknowledgment of liability by the Arbitration Tribunal.Analysis:1. The appellant objected to the Arbitral Award dated 27.08.2016, which favored the respondent in a dispute regarding the construction of an IT Park. The appellant argued that the Award, including interest and costs, was against the contract terms, making it illegal. However, the court cited a previous judgment stating that clauses barring interest payment are illegal under the Indian Contract Act. Notably, the Award did not grant pre-litigation interest, resolving this issue.2. Regarding the costs awarded to the respondent, it was agreed to set them aside based on a specific clause in the contract. This decision was made in accordance with Clause 118.4 of the contract, thereby addressing the concern raised by the appellant.3. The timeliness of the claim petition was contested by the appellant, questioning the service of notices dated 20.09.2010 and 28.09.2010. The Arbitration Tribunal extensively examined this issue, concluding that the notices were duly served based on the evidence presented. The court emphasized that it does not reassess factual findings unless they are grossly illegal or perverse, affirming the Tribunal's conclusion on the timeliness of the claim petition.4. Lastly, the acknowledgment of liability by the appellant was a key contention. The Tribunal's detailed analysis and findings on the service of notices resolved this issue, leading to the dismissal of the appeal. The court upheld the Tribunal's decision, emphasizing that no valid objections could be raised under Section 34 of the Act regarding the service of notices.In conclusion, the appeal was dismissed based on the comprehensive analysis of the issues raised, affirming the Arbitration Tribunal's findings and decisions.