M/S COCHIN SHIPYARD LTD. versus M/S APEEJAY SHIPPING LTD.

Citation: [2015] 10 S.C.R. 994 · Decided: 06-11-2015 · Supreme Court of India · Bench: DIPAK MISRA · Disposal: Case Partly allowed

Judgment (excerpt)

A 
B 
[2015] 10 S.C.R. 994 
M/S COCHIN SHIPYARD LTD. 
v. 
M/SAPEEJAY SHIPPING LTD. 
(Civil Appeal No.9187 of2015) 
NOVEMBER 06, 2015 
[DIPAK MISRA AND PRAFULLA C. PANT, JJ.) 
Arbitration Act, 1940- s. 30- Objection ·under-Alleging 
c misconduct ofarbitrator- Scope of- Held the objection u/s. 
30 can be only alleging legal misconduct of the arbitrator 
and not personal/moral conduct - The a/legation of legal 
misconduct can be substantiated only from the records of 
the arbitral proceedings - Examination of any witness to 
D substantiate such allegation is not permissible - In the 
present case, permission granted by High Court to 
substantiate the a/legation of misconduct against the 
arbitrator, by examining the witness, is wrong- However, it is 
open to establish the allegation from the arbitral proceedings. 
E 
F 
Words and Phrases: 
'Legal misconduct' - Meaning of, in the context of s. 30 
of Arbitration Act, 1940. 
'Legal misconquct' and 'moral misconduct' - Distinction 
between - Discussed. 
Partly allowing the appeal, the Court 
G 
HELD: 1. In the present case, the issue centres 
H 
·around Section 30 of the Arbitration Act, 1940. Though 
certain grounds have been provided under Section 30, 
the eourt is required to deal with the ambit and sweep 
of legal misconduct on the part of the arbitrator inasmuch 
-
994 
COCHIN SHIPYARD LTD. v. APEEJAY SHIPPING LTD. 
995 
· as there are allegations as regards non-consideration A 
of relevant documents, ascription of reasons of passing 
of the award which do not flow from the material on 
record and further the conduct of the arbitrator during 
the arbitral proceedings in recording of the minutes. The 
assail does not pertain to personal misconduct or moral B 
misconduct of the arbitrator. [Para 8] (1003-H; 1004-A-C] 
Firm 
Madan/a/ Roshanlal Mahajan 
v. 
Hukumchand Mills Ltd., Indore AIR 1967 SC 
1030: 1967 SCR 105; Champsey Bhara & 
Company v. Jivraj Ba/loo Spinning and Weaving 
Company Ltd. AIR 1923 PC 66; K.P Poulose v. 
State of Kera/a and Another (1975) 2 SCC 
236: 1975 (0) Suppl. SCR 214; Union of/ndia 
v. Jain Associates and Another (1994) 4 SCC 
665; Dandasi Sahu v. State of Orissa (1990) 1 
SCC 214: 1989 (2) Su.ppl. SCR 348; Paradip 
Port Trust and Others v. Unique Builders (2001) 2 
SCC 680: 2001{1)SCR668; Hari Om Maheswari 
v. Vinitkumar Parikh vs. Bhagawti Oxygen Ltd. v. 
Hindustan Copper Ltd. (2005) 6 SCC 462: 2005 
(3) SCR 232; State of UP v. Allied Constructions 
(2003) 7. sec 396: 2003 (2) Suppl. SCR 55 -
relied on. 
Jivarajbhai Ujamshi Sheth v. Chintamanrao Balaji 
(1964) 5 SCR 480; Puri Construction Pvt. Ltd. v. 
Union of India (1989) 1 SCC 411; State of Orissa 
v. Mis Lall Brothers (1988) 4 SCC 153: 1988 (2) 
Suppl. SCR 579; Gujarat Water Supply and 
Sewerage Board v. Unique Erectors (Gujarat) (P). 
Ltd. and Another (1989) 1 SCC 532: 1989 (1) 
SCR 318; Rajasthan State Mines and Minerals 
Ltd. v. Eastern Engineering Enterprises and 
c 
D 
E 
F 
G 
H 
996 
SUPREME COURT REPORTS 
[2015] 10 S.C.R. 
A 
Another (1999) 9 SCC 283: 1999 (2) Suppl. 
SCR 71 O; Oil and Natural Gas Corporation v. Wig 
Brothers Builders and Engineers Private Limited 
(2010) 13 SCC 377; lnder Sain Mittal v. Housing 
Board, Haryana and Others (2002) 3 SCC 
B 
175: 2002 (2) SCR 5; Food Corporation of India 
v. Chandu Construction and Another (2007) 4 
SCC 697:2007 (4) SCR 160; State of U.P v. Allied 
. Constructions (2003) 7 SCC 396: 2003 (2) Suppl. 
c 
SCR 55 
- referred to. 
2. Misconduct does not always have a moral 
connotation. It may not have any connection with the 
individual/personal conduct of the arbitrator. The said 
conduct would be in sphere of moral misconduct. [Para 
D 19] [1010-D-E] 
3. As far as legal misconduct is concerned, the same 
must be manifest or palpable from the proceedings 
before the arbitrator. A person urging the ground of legal 
E misconduct has to satisfy the court from the records of 
the arbitral proceedings that there has been a legal 
misconduct on the part of .the arbitrator as a 
consequence of which the award gets vitiated. The 
question of adducing any kind of oral evidence to 
F substantiate the plea or stand or stance does not arise. 
It has to be shown from the proceedings carried on 
before the arbitrator and the evidence adduced before 
the arbitrator. Evidence cannot be adduced in court to 
substantiate the challenge on the score of legal 
G misconduct. [Para 19] [1010-E-H] 
H 
/spat Engineering & Foundry Works, B.S. City, 
Bokaro v. S

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