LexHYUNDAI CORPORATION & ANR. versus OIL AND NATURAL GAS CORPORAUON LTD.
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A B (2017] 9 S.C.R. 490 HYUNDAI (~ORPORATION & ANR. v. OIL AND NATURAL GAS CORPORAUON LTD. (Civil Appeal No. 3161 of2006) AUGUST 03, 2017 [R. F. NARIMAN AND SANJAY KISHAN KAUL, JJ.] Arbitration A<.:t, 1940 - Contract between appellant (contractor) and respondent-Company, for off-shore oil exploration and drilling ".'"Appellant enlered into a sub-contract with a Panama C based firm - Section 44BB introduced in the Income Tax Act which made a non-resident assess~e engaged in the ousif!ess of providing services for extraction or production of mineral oil, liable to pay income tax - Said .ftub-contractor taxed thereunder 7 Disputes between the parties - Matter went to arl itration - Both the arbitrators though, agre.ed that tax was payable uls.44B and D therefore, Cl. I 7.3 of the contract was squareZv attracted on the facts of the case, however, differed on the applicatiJn of Cl.13.2.8 which interdicted the application of Cl. I 7. 3 - Matter referred to the Umpire - However. instead of deciding this question, the Umpire went into a question already decided in favour of the appellant b;v·both th(! E arbitrators itt respect of Cl.17.3,and a"ived a• a, contrary conclusion - On appeal, held: The Umpire rendered '' ~ecision on an issue which was never referred to him - Award of ·~ Umpire set aside - Since the Umpire (Former Chief Justice Y. (.1Chandrachud) is no longer alive, with the consent of the parti.1s~ Justice A/tab Alam appointed as Umpire and is requested to dci~ver the award within F three months. ., Allowing the appeal, the Court :HELD: 1.1 Instead of deciding the qtiestion referred, the -Umpire (Former.Chief Justice Y.V. Chandrachud) went into a question already decided in favour of the appellant and arrived at G a contrary co.nclusion, namely, that tax w¥s not payable under .. Section 4488, Income Tax Act, 1961 at all1 but had in fact been paid pursuant to the Circular of the Central Government of July, • I 1987, and that this being the case, Clause 1t7.3 itself would not b_e attracted, as there was no change in lawf under which such tax 'ii 'had to be paid. (Para 4)(494-D-EJ ,, ' 490 • HYUNDAI CORPORATION & ANR. v. OIL AND NATURAL 491 GAS CORPORATION LTD. 1.2 On a perusal of the award of the Umpire, it is noticed A that a decision was .rendered on an issue which was never referred to him. This being the case, and the matter being·a fairly old one, B the award of the Umpire is set aside on the ground that his ~ltimate decision was on a matter not referred to him, but indeed on a matter which had been concluded in favour of the appellant. This being the case, it would be necessary to remit the matter to the Umpire. Inasmuch as the Umpire, Former Chief .Justice Y.V. Chandrachud is no longer alive, with the consent of the parties, Justice Aftab Alam. is appointed to be the Umpire in this case to decide the narrow issue as to whether the Clause 13.2.8 would apply so as to interdict the application of the Clause 17.3 which C · was held by both learned Arbitrators to apply to the parties. The Arbitrator is requested to take up the matter as early as possible and deliver his award within a period of three months from the date on which he receives the papers from the parties. By consent, it is recorded that the matter being an old one, this award would not be subjected to the drill of appeals before the High Court, but would come back directly to this Court for further adjudication. [Para 5)(495-C-F] CIVIL APPELLATE JURISDICTION: Civi I Appeal No. 3161 of2006. From the Judgment and Order dated 14.02.2006 of the High Court of Judicature at Bombay in Appeal No. 13 of 2006 in Arbitration No. 136of2005 inAwardNo. 10of2004. Anushree Menon, Vikas Mehta, Ad vs. for the Appellants. D E Somiran Sharma, K. R. Sasiprabhu, Ad vs. for the Respondent. F The Judgment of the Court was delivered by R. F. NARIMAN, J. I. The present appeal has a somewhat chequered history. It arises out of the respondent's floating a tender for two platform facilities for off-shore oil exploration and drilling in October, G 1982. The appellant before us submitted two tenders for two such platforms on 13th January and 22nd March of 1983 respectively. Immediately after the submission and acceptance of these tenders, on 3 lst March, 1983, a Notification was issued by the Government oflndia extending the Income Ta'<Act, 1961 to the Continental Shelf and Exclusive Econo
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