TaxTMI 
TaxTMI 
2020 (5) TMI 733
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.... judgment and order dated 26.02.2019 in Arbitration Appeal Nos.3, 4 and 5 of 2018 on the ground that no ground for review is made out and that there is a delay in filing the application for review. 2. We have heard Mr. Harish Salve and Mr. Neeraj Kishan Kaul, learned Senior counsel appearing on behalf of the petitioner. On behalf of the respondent, we have heard Mr. Tushar Mehta, learned Solicitor General and Mr. Huzeffa Ahmadi, learned Senior counsel at some length, even at the time of the admission. 3. The learned sole arbitrator has passed the arbitral award dated 29.03.2016 in respect of Package-I holding as follows:- "Based on my findings above, I have no hesitation in coming to the considered finding that the contract itself provides rate(s) for payment of extra lead in item Nos.2.7 and 3.4 of the BOO for surface and underground structures respectively. Admittedly material had been transported from a lead much longer than that envisaged at the time of award of work in favour of the claimant. It is also an admitted case of the parties that the claimant is entitled to extra payment for the extra lead. The only point at issue is whether Clause 33(ii)(a) or Clause 33(iii) wou....
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....Act, 1996 by Amendment Act of 2015. The said review petitions came to be dismissed by the High Court vide the impugned orders. 7. We heard the matter at some length at the time of admission and carefully considered the submissions of the learned counsel appearing for the parties and the judgments relied upon by both the sides and the judgment of the High Court dated 26.02.2019 and other materials on record. 8. Contention of the learned Senior counsel for the petitioner is that dismissal of the earlier SLP vide order dated 19.07.2019 is a non-speaking order and not on merits and hence no objection could be taken for filing of the review petition. Placing reliance upon Bussa Overseas and Properties Private Limited and Another v. Union of India and Another (2016) 4 SCC 696 and Constitution Bench decisions in Durga Shankar Mehta v. Thakur Raghuraj Singh and Others (1955) 1 SCR 267, it was submitted that Article 136 of the Constitution confers on the Supreme Court special or residuary powers which are exercisable outside the purview of the ordinary laws in cases where the needs of justice demand interference by the Supreme Court. It was submitted that in paragraph (30) of Bussa Overse....
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....al have to be seemly understood. Though in the decision in Shanker Motiram Nale Shiolalsing Gannusing Rajput (1994) 2 SCC 753, the two-Judge Bench referred to Order 47 Rule 7 of the Code of Civil Procedure that bars an appeal against the order of the court rejecting the review, it is not to be understood that the Court has curtailed the plenary jurisdiction under Article 136 of the Constitution by taking recourse to the provisions in the Code of Civil Procedure. It has to be understood that the Court has evolved and formulated a principle that if the basic judgment is not assailed and the challenge is only to the order passed in review, this Court is obliged not to entertain such special leave petition. The said principle has gained the authoritative status and has been treated as a precedential principle for more than two decades and we are disposed to think that there is hardly any necessity not to be guided by the said precedent. 31. In this context, we may profitably reproduce a passage from State of A.P. v. A.P. Jaiswal (2001) 1 SCC 748, wherein a three- Judge Bench has observed thus: (SCC p. 761, para 24) "24. Consistency is the cornerstone of the administration of justic....
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....fers from error apparent on the face of the record and therefore, the petitioner is justified in seeking the review of the judgment dated 26.02.2019 and the High Court was not right in rejecting the review petition. In support of the contention of the petitioners, reliance was placed upon HRD Corporation (Marcus Oil and Chemical Division) v. GAIL (India) Limted (2018) 12 SCC 471 and Ssangyong Engineering and Ssangyong Engineering and Construction Company Limited v. National Highways Authority of India (NHAI) (2019) 15 SCC 131, Para No.19. 14. Mr. Tushar Mehta, learned Solicitor General and Mr. Huzeffa Ahmadi, learned Senior counsel have submitted that at the time when the earlier SLP(C) Nos.13629-13631 of 2019 were heard, they were heard at length and all the arguments including the effect of the amendment to Section 34 was also raised and only thereafter, the earlier SLPs came to be dismissed. It was submitted that though the dismissal of order dated 19.07.2019 is a non-speaking order, the petitioner had raised all contentious points, now urged, and faced an order of dismissal, and the petitioner cannot be allowed to reagitate the matter by filing a review petition. 15. In Board....
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....f a trivial nature. This again is a really a contravention of Section 28(1)(a) of the Act, which reads as under: 28. Rules applicable to substance of dispute.--(1) Where the place of arbitration is situated in India,- (a) in an arbitration other than an international commercial arbitration, the arbitral tribunal shall decide the dispute submitted to arbitration in accordance with the substantive law for the time being in force in India; 42.2 (b) a contravention of the Arbitration Act itself would be regarded as a patent illegality-for example if an arbitrator gives no reasons for an award in contravention of Section 31(3) of the Act, such award will be liable to be set aside. 42.3 (c) Equally, the third sub-head 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.- (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....
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....d shall not be set aside merely on the ground of an erroneous application of the law or by re-appreciating evidence.' [NOTE: The proposed S.34(2A) provides an additional, albeit carefully limited, ground for setting aside an award arising out of a domestic arbitration (and not an international commercial arbitration). The scope of review is based on the patent illegality standard set out by the Supreme Court in ONGC Ltd. v. Saw Pipes Ltd., (2003) 5 SCC 705. The proviso creates exceptions for erroneous application of the law and re-appreciation of evidence, which cannot be the basis for setting aside awards.]" (emphasis supplied) 19. Pursuant to the recommendations of the Law Commission, the 1996 Act was amended by Act 3 of 2016, which came into force w.e.f. 23.10.2015. The ground of "patent illegality" for setting aside a domestic award has been given statutory force in Section 34(2A) of the 1996 Act. The ground of "patent illegality" cannot be invoked in international commercial arbitrations seated in India. Even in the case of a foreign award under the New York Convention, the ground of "patent illegality" cannot be raised as a ground to resist enforcement, since this ground i....
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.... Delhi Development Authority (2015) 3 SCC 49, however, would remain, for if an arbitrator gives no reasons for an award and contravenes Section 31(3) of the 1996 Act, that would certainly amount to a patent illegality on the face of the award. 40. The change made in Section 28(3) by the Amendment Act really follows what is stated in paras 42.3 to 45 in Associate Builders v. Delhi Development Authority (2015) 3 SCC 49 , namely, that the construction of the terms of a contract is primarily for an arbitrator to decide, unless the arbitrator construes the contract in a manner that no fair-minded or reasonable person would; in short, that the arbitrator's view is not even a possible view to take. Also, if the arbitrator wanders outside the contract and deals with matters not allotted to him, he commits an error of jurisdiction. This ground of challenge will now fall within the new ground added under Section 34(2-A)." (emphasis supplied) 22. The present case arises out of a domestic award between two Indian entities. The ground of patent illegality is a ground available under the statute for setting aside a domestic award, if the decision of the arbitrator is found to be perverse, or,....
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....es of the tender documents like Clause 2 and various Sub-clauses i.e. Sub-clauses 2.1 to 2.8.7 under Clause 2 and Clause 3 and various Sub-Clauses i.e. Sub-clauses 3.1 to 3.7 under Clause 3 of the BoQ, Clause 2 and various Sub-clauses i.e. Sub-clause 2.1 to 2.17.7 under Clause 2 and Clause 3 and various Sub-clauses i.e. Sub-clause 3.1 to 3.10.5 under Clause 3 of "Particular Technical Specifications", Vol. 2, Part II. The learned Arbitrator has taken into consideration an irrelevant fact that while making provisional payment, the initial lead of 3.0 km has been deducted and that this shows that Clause 2.7 and 3.4 of the BoQ are applicable. The provisional payment was an interim arrangement and was preceded by meetings dated 07.12.2012 and 08.12.2012 wherein it was specifically agreed between the parties that HoP, NEEPCO would take steps for referring the dispute to arbitration and that till the arbitral award, the payment would be made as per the prevailing provisional rate without any escalation and that final rate payable for transportation of sand and boulder shall be done on implementation of the arbitral award. As such the fact that provisional payment was made by deducting ini....
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....quer as being against the fundamental policy of Indian law. The Bombay High Court has held: "If the argument of the Contractors is accepted, it lead to them blatantly enriching themselves over and above what they are entitled. Such completely unjust enrichment, that too at the cost of public funds, is abhorrent under the fundamental policy of Indian Law. The award in AJECT, which permits such blatant enrichment is therefore is also vitiated on the ground that it is against the fundamental policy of Indian Law." We are also of the considered view that the Arbitral Award which would potentially result in unjust enrichment of the respondent to the extent of about Rs. 1,000 Crores is against the fundamental policy of Indian law and, therefore, warrant interference on this count as well. Though this court is not sitting in appeal over the award of the arbitral tribunal, the presence of grounds under Section 34[2] of the Act and the satisfaction arrived at by this Court in this regard, warrants interference more so, as the Arbitral Awards in question are Declaratory Arbitral Awards and involved interpretation of Clauses 2.7 and 3.4 of the BoQ and Clauses 32(ii)(a) and 33(iii) of th....