LexBHAGAWATI OXYGEN LTD. versus HINDUSTAN COPER LTD.
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A BHAGA WA TI OXYGEN LID. v. HINDUSTAN COPER LTD. APRIL 5, 2005 B [RUMA PAL AND C.K. THAKKER, JJ.] Indian Arbitration Act, 1940; Section 30 : Agreement entered into between a Company and a supplier for supply C of oxygen-Arbitration Clause -Breach of terms-Claims and counter-c/aims- Arbitrator gave award in favour of the supplier-Challenge to-Set aside by Single Judge of the High Court-Affirmed by Division Bench of the High Court-On appeal, Held: Court while exercising the power under Section 30 of the Act cannot re-appreciate the evidence/examine correctness of the award- D The Court could interfere with the award only on the ground of misconduct or when the award was either improperly procured or otherwise invalid-- Since the company failed to prove that they purchased oxygen from other sources in breach of the agreement by the supplier, Arbitrator was right in rejecting their claim- High Court not justified in setting aside the Award on ground of misconduct-Sale of Goods Act, 19 30-Section 61. E Interest-Power of Arbitrator-Held: Arbitrator is competent ·to award interest for pre-reference period, pendente lite and post award period provided the rate of interest is reasonable-Since the company had advanced load to 'the supplier@ 18%, Arbitrator was right in awarding the same rate of interest F in favour of the supplier. The questions which arose for determination in these appeals were as to whether on the facts and in the circumstances of the case, the Arbitrator was right in allowing the claim of the appellant-supplier against the respondent, a Public Sector Undertaking/company in terms of the G arbitration clause and on the ground of breach of agreement; as to whether the Arbitrator had miscondu'!ted himself in passing the impugned award by dismissing the counter claim of the company and as to whether the Single Judge and the Division Bench of the High Court were right in setting aside a part of the award by directing the Arbitrator to re-consider the matter and decide it afresh; as to whether the Arbitrator had pow~r fI 232 .,..._. BHAGAWATI OXYGEN LTD. v. HINDUSTAN COPER LTD. 233 to award interest at the rate of eighteen per cent per annum for pre- A reference period, pendente lite and post reference future interest from the date of award till the date of payment and as to whether the single Judge as also and the Division Bench was justified in reducing the rate of interest from eighteen per cent to six per cent. Allowing Civil Appeal Nos. 2412-13 of 2005 and dismissing Civil B Appeal No. 2414 of 2005, the Court HELD : 1.1. In view of the finding recorded by the Arbitrator and non-interference by the High Court, no case has been made out by the company as regards the claim allowed by the Arbitrator in favour of the C supplier to the extent of supply of oxygen gas to the company. Hence, th~ appeal filed by the company is dismissed. (243-D] 1.2. The Court, while exercising the power under Section 30 of the Indian Arbitration Act, cannot re-appreciate the evidence or examine correctness of the conclusions arrived at by the Arbitrator. The. D jurisdiction is not appellate in nature and an award passed by an Arbitrator cannot be set aside on the ground that it was erroneous. It is not open to the Court to interfere with the award merely because in the opinion of the Court, other view is equally possible. It is only when the Court is satisfied that the Arbitrator had misconducted himself or the proceedings or the award had been improperly procured or is 'otherwise' E invalid that the Court may set aside such award. (244-B-C) Union of India v. Rallia Ram, AIR (1963) SC 1685; U.P. Hotels v. U.P. State Electricity Board, (1989) 1SCC359; Rajasthan State Mines & Minerals Ltd. v. Eastern Engineering Enterprises & Anr., [1999) 9 SCC 283; U.P. State Electricity Board v. Searsole Chemcia/s Ltd., (2001) 3 sec 397; Indu F Engineering & Textiles Ltd v. Delhi Development Authority, (2001) 5 SCC 691 and Bharat Coking Coal Ltd. v. Mis. Annapurna Construction, [2003) 8 sec 154, relied on. Hodgkinson v. Fernie,(1857) 140 ER 712, referred to. 2.1. In the instant case, the Arbitrator has considered the relevant evidence on record and observed that oxygen was supplied by the supplier, which was accepted by the company. Certain letters were, no doubt, written by the company to the supplier complaining about the quantity G and quality of oxygen gas. The Arbitrator a
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