AMERICAN METALLURGICAL COAL PTY LTD. versus MMTC LTD.

Citation: [2020] 14 S.C.R. 510 · Decided: 17-12-2020 · Supreme Court of India · Bench: R.F. NARIMAN · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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SUPREME COURT REPORTS
[2020] 14 S.C.R.
ANGLO AMERICAN METALLURGICAL COAL PTY LTD.
v.
MMTC LTD.
(Civil Appeal No.4083 of 2020)
DECEMBER 17, 2020
[ROHINTON FALI NARIMAN AND K. M. JOSEPH, JJ.]
Arbitration and Conciliation Act, 1996: International
commercial arbitration – The present case is that of an international
commercial arbitration, the Majority Award being delivered in New
Delhi on 12.05.2014 – Case was argued on the basis of the law as
it stood before the Arbitration and Conciliation (Amendment) Act,
2015 which added two explanations to s.34(1) and sub-section (2A)
to s.34 of the Arbitration Act, in which it was made clear that the
ground of “patent illegality appearing on the face of the award” is
not a ground which could be taken to challenge an international
commercial award made in India after 23.10.2015, when the
Amendment was brought into force – Given the parameters of judicial
review laid down in Associate Builders, neither the ground of
fundamental policy of Indian law, nor the ground of patent illegality,
have been made out in the facts of this case, given the fact that the
Majority Award is certainly a possible view based on the oral and
documentary evidence led in the case, which cannot be
characterized as being either perverse or being based on no
evidence – Majority Award, after reading the entire correspondence
between the parties and examining the oral evidence, has come to a
possible view, both on the Respondent being in breach, and on the
quantum of damages – Majority Award is certainly a possible view
of the case, and thus, cannot in any manner, be characterised as
perverse.
Evidence Act, 1872: s.92, proviso (6) and illustration (f); s.94
and s.95 – Interpretation of documents exchanged between the parties
in the performance of a contract – Reading together proviso (6)
and illustration (f) to s.92, s.94 and s.95 of the Evidence Act show
that when there are a number of documents exchanged between the
parties in the performance of a contract, all of them must be read
as a connected whole, relating each particular document to “existing
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[2020] 14 S.C.R. 510
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facts”, which include how particular words are used in a particular
sense, given the entirety of correspondence between the parties –
Thus, after the application of proviso (6) to s.92 of the Evidence
Act, the adjudicating authority must be very careful when it applies
provisions dealing with patent ambiguity, as it must first ascertain
whether the plain language of a particular document applies
accurately to existing facts – If, however, it is ambiguous or
unmeaning in reference to existing facts, evidence may then be given
to show that the words used in a particular document were used in
a sense that would make the said words meaningful in the context
of the entirety of the correspondence between the parties – In the
instant case, the three critical emails have to be read in the
surrounding circumstances of the entirety of the LTA and the
correspondence which ensued between the parties – Once that
exercise is undertaken, as was undertaken by the Majority Award,
it was not possible to hold that the Majority Award was not a possible
view on the facts of this case – The reliance of the Majority Award
upon the correspondence between the parties buttressed by evidence
on behalf of appellant, was not therefore flawed.
Evidence Act, 1872: ss.92, 94, 95 – A “patent ambiguity”
provision, as contained in s.94 of the Evidence Act, is only applicable
when a document applies accurately to existing facts, which includes
how a particular word is used in a particular sense – Given that, in
the facts of the present case, there was no mention of the price at
which coal was to be supplied in the three “crucial” emails, these
emails must be read as part of the entirety of the correspondence
between the parties, which would then make the so-called
“admissions” in the emails apply to existing facts – Once this is
done, it is clear that there is no scope for the further application of
the “patent ambiguity” principle contained in s.94 of the Evidence
Act, to the facts of the present case – However, s.95 of the Evidence
Act, dealing with latent ambiguity, when read with proviso (6) and
illustration (f) to s.92 of the Evidence Act, could apply to the facts
of the present case, as when the plain language of a document is
otherwise unmeaning in reference to how particular words are used
in a particular sense, given the entire

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