LexMARKFED VANASPATI & ALLIED INDUSTRIES versus UNION OF INDIA
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
MARKFED VANASPATI & ALLIED INDUSTRIES
A
v.
UNION OF INDIA
SEPTEMBER 14, 2007
(TAR UN CHA TIER.JEE AND DAL VEER BHANDARI, JJ.)
B
Contract-Non-performance of-Invoking of force majeure clause in
agreement-Under a contract for supply of rapeseed oil, supplier failed to
supply the specified quantity of oil-Plea of ban by Government on use and C
processing of rapeseed oil by manufacturers-Held, High Court was right in
holding that on facts force majeure clause could not be attracted since the
ban covered use of rapeseed oil for manufacturing Vanaspati, and
manufacturing rapeseed oil was not banned or restricted-Arbitration.
Arbitration-Non-speaking award by arbitrator-Court cannot probe D
into mental process of arbitrator-Court should endeavour to support a non-
speaking arbitration award provided it adhered to parties' agreement and
was not invalidated due to arbitrator's misconduct-Contract.
The parties entered into a contract for supply of the specified quantities
of rapeseed oil. It was the case of the respondent-Union of India that the E
supplier-appellant failed to supply the oil as per the delivery schedule and,
therefore, the contract was cancelled. The dispute was referred to arbitration.
The stand of the supplier was that it was unable to supply the oil because of
the ban by the Government on use of processing of rapeseed oil by
manufacturers. The arbitrator gave a non-speaking award against the
supplier, and the single Judge of the High Court made the award rule of the
court. The Division Bench of the High Court dismissed the appeal of the
supplier.
F
In the instant appeal filed by the supplier company, the arguments were
confined only to the plea with regard to force majeure clause in the agreement. G
Dismissing the appeal, the Court
HELD: 1. The Division Bench of the High Court, while affirming the
judgment of the single Judge has correctly observed that the force majeure
957
H
-{
958
SUPREME COURT REPORTS
[2007] 9 S.C.R.
A clause could not be attracted in the facts and circumstances of this case. This
was so because the ban was on the use of rapeseed oil for manufacturing
'·
Vanaspati but manufacture of rapeseed oil was not debarred or restricted.
f Para 7 and 8) (960-C-E)
2. Arbitration is a mechanism or a method of resolution of disputes that
B unlike court takes place in private, pursuant to agreement between the parties.
The parties agree to be bound by the decision rendered by a chosen arbitrator
after giving hearing. The consistent and settled legal position is that the scope
of interference is extremely limited in a non-speaking award. The Court
cannot probe into the mental process of the arbitrator. The endeavour of the
Court should be to honour and support a non-speaking arbitration award
C provided it adhered to the parties' agreement and was not invalidated due fo.
arbitrator's misconduct. Considering the judgments of the single Judge and
the Division Bench of the High Court, no interference is called for.
(Para 9, 15, 18 and 19) (960-F; 962-A, F-H; 963-AJ
Mis Sudarsan Trading Co. v. Govt. of Kera/a & Anr., (198912 SCC 38;
D State of A.P. v. R. V. Rayanim, (1990) 1 SCC 433; Bijendra Nath Srivastava v.
Mayank Srivastava & Ors., (199416 SCC 117; New India Civil Erectors (P)
Ltd v. Oil & Natural Gas Corporation., (1997) l l SCC 75; Rajasthan State
Mines & Minerals Ltd v. Eastern Engineering Enterprises & Anr., (1999) 9
SCC 283; State of Bihar & Ors. v. Hanuman Mal Jain, (1997) 11 SCC 40,
P. V.; Subha Naidu & Ors. v. Govt. of A.P. & Ors., (1998) 9 SCC 407; Star
E Construction and Transport Co. & Ors. v. India Cements Ltd, (200113 SCC
351 and D.D. Sharma v. Union of India, (2004) 5 SCC 325, relied on.
Russell on Arbitration 19th Edition at Page 110, referred to.
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2668 of2007.
F
From the Judgment and Order dated 17.04.2006 of the High Court of
Delhi at New Delhi in F.A.0. No. 206 of2006.
L. Nageshwar Rao, K.G. Bhagat, Vineet Bhagat, Hari Kumar G. and Neha
Jain (Dabasis Misra) for the Appellant.
G
Vikas Singh, ASG., Shilpa Singh, Shiva Lakshmi and R.C. Kathia (for
D.S. Mabra) for the Respondents.
The Judgment of the Court was delivered by
DAL VEER BHANDARI, J. 1. This appeal is directed against the judgment
H of the Division Bench of the Delhi High Court dated 17.4.2006 passed in FAO
MARKFEDVANASPATI&ALLIEDINDUS.v. U.0.1.(BHANDARI,J.J 959 ·
(OS) No. 206/2006.
2. The respondent, UniExcerpt shown. Read the full judgment & AI analysis in Lexace.