OIL & NATURAL GAS CORPORATION LTD. versus ATWOOD OCEANIC INTERNATIONAL, S.A.

Citation: [2008] 8 S.C.R. 430 · Decided: 13-05-2008 · Supreme Court of India · Bench: TARUN CHATTERJEE · Disposal: Dismissed

Judgment (excerpt)

A 
B 
[2008] 8 S.C.R. 430 
OIL & NATURAL GAS CORPORATION LTD. 
v. 
ATWOOD OCEANIC INTERNATIONAL, S.A. 
(Civil Appeal No.1218 of 2001) 
MAY 13, 2008 
[TARUN CHATTERJEE AND DALVEER BHANDARl,JJ.] 
Arbitration Act 1940 - Agreement between ONGC and 
foreign company-contractor, for carrying out drilling operations 
C in offshore waters of India on 2. 03. 1983- By Notification, Gov-
ernment of India extending Income Tax Act, 1961 to offshore 
areas with effect from 1.04.1983 - Claim for reimbursement 
by contractor of personal tax dues paid by it in respect of sala-
ries earned by employees, for accounting year ending on 
D 31.03.1983 and 31.03.1983 - Denied by ONGC - Dispute 
referred to arbitration - Disagreement between two arbitrators 
- Award by Umpire - Claim allowed holding that on account 
of change in income tax laws, contractor paid tax on behalf of 
its employees and as such contractor incurred increased costs 
- Challenge to - Single Judge of High Court holding that the 
E Notification was prospective and not retrospective, made award 
Rule of the Court - In appeal, Division Bench of High Court 
holding that the direction in Award pertaining to assessment 
year 1984-85 justified, however, direction pertaining to assess-
ment year 1983-84 contrary to law. thus, direction regarding 
F payment of Rs 28,26,3591- for assessment year 1983-84 set 
aside - Decree modified to that extent - On appeal. held. In 
such cases scope for interference by this Court is limited -
On pcr;,;sd! of materials on record. interference not called for 
-
Terntorial Waters, Continental Shelf Exclusive Economic 
G Zone and other Maritime Zones Act, 1976. 
CIVILAPPELLATE JURISDICTION: Civil Appeal No 1218 
of 2001 
From the final Judgment and Order dated 8.2.2000 of the 
rl 
430 
; 
OIL & NATURAL GAS v. ATWOOD OCEANIC 
431 
INTERNATIONAL, S.A. [DALVEER BHANDARI, J.] 
High Court of Judicature at Bombay in Appeal No. 141 of 1995 A 
in Arbitration Petition No. 24 of 1990 in Arbitration Award No. 
15 of 1989 
WITH 
C.A. No. 1291 of 2001 
B 
Vivek K. Tankha, K.R. Sasiprabhu and Bindu K. Nair for 
the Appellant. 
Shyam Dewan, Khooshnum R. Daviervala, Rajat Navet 
and Pradeep Kumar Bakshi for the Respondent. 
c 
The Judgment of the Court was delivered by 
DALVEER BHANDARI, J. These appeals are directed 
against the judgment of the High Court of judicature at Bombay de-
livered in Appeal Nos.141 and 142of1995 dated 81h February, 200b. 
D 
Brief facts which are necessary to dispose of thesf.: ap-
peals are recapitulated as under: 
On 2nd March, 1983, the appellant, Oil and Natural Gas Corpo-
ration Limited entered into an Agreement with the respondent, Atwood 
E 
Oceanic International, S.A. for carrying out drilling operations in off-
shore waters of India and for rendering other related services with 
regard to the drilling unit Sagar Pragati belonging to the appellant on 
the terms and conditions set forth in the said Agreement. 
, 
The said Agreement contained an Arbitration Clause 11. 
F 
The said Arbitration Clause 11 reads as under:-
"Arbitration : 
If any dispute, difference or question shall at any time 
hereafter arise between the parties hereto or their G 
respective representative concerning anything herein 
contained or arising out of these presents or as to the 
rights, liabilities. or duties of the said parties hereunder 
and cannot be mutually resolved the same shall be referred 
to arbitration, proceedings of which shall be held at 
H 
A 
B 
c 
D 
E 
F 
G 
H 
432 
SUPREME COURT REPORTS 
[2008] 8 S C.R. 
(Bombay) India. Within thirty(30) days of the receipt of the 
notice of any dispute, each party shall appoint an arbitrator 
and such arbitrators shall ap~oint an Umpire before they 
enter upon the reference and not later than one month from 
the latest date of their respective appointments. If any of the 
parties fail to appoint arbitrators within the specified period 
or should the two arbitrations fail to agree upon the selection 
of an Umpire within the stipulated period, the Hon'ble Chief 
Justice of the Supreme Court of India shall nominate the 
required arbitrator or the Umpire as the case may be, who 
shall be a resident of India, but not a national of the country 
of neither of the parties. The decision of the arbitrators and 
failing an agreed decision by them, the decision of the 
Umpire shall be final and binding on the parties thereto. 
The arbitration proceedings shall be held in accordance 
with the provisions of the Ind

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