PURE HELIUM INDIA PVT. LTD. versus OIL AND NATURAL GAS COMMISSION

Citation: [2003] SUPP. 4 S.C.R. 561 · Decided: 09-10-2003 · Supreme Court of India · Bench: V.N. KHARE · Disposal: Appeal(s) allowed

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Judgment (excerpt)

PURE HELIUM INDIA PVT. LTD. 
A 
v. 
OIL AND NATURAL GAS COMMISSION 
OCTOBER 9, ·2003 
(V.N, KHARE, CJ. AND S.B. SINHA, rJ 
B 
Arbitration Act, 1940-Section 30-Setting aside award-Grounds 
for-Jurisdiction of Courts-Arbitrator giving non-speaking award holding 
that appellant was entitled to higher price due to escalation in price of 
dollar -Respondent challenging award on ground that contract did not C 
prcvide for any benefit to appellant due to escalation in price-Held, 
interpretation of contract was within the scope of arbitration agreement-
No infirmity in award. 
A notice inviting global tender for supply of helium gas was issued D 
by the respondent. Clause 1.16.1 of the tender stipulated that where 
payments were required in Indian rupees, the bidder should indicate 
if it would need any foreign exchange for completing the supplies/ 
services that may be ordered on it. The bidder was required to quote 
the total price along with its breakdown between Indian currency E 
portion and the foreign currency. Clause 2.6 of the tender required the 
bidder to quote a firm price and no escalation was pe_rmissible. Under 
Clause 21 any dispute, difference or question which arose between the 
parties in respect of the agreement or concerning any thing contained 
or arising out of the agreement or as to the rights, liabilities or duties 
of the parties under the agreement, was to be referred for arbitration. F 
The appellant submitted the lowest bid. After negotiations, the 
appellant agreed to supply the gas at Rs. 149 per cubic meter out of 
which US $ 4.60 was to be the foreign exchange component. Contract 
was awarded to the appellant. During the subsistence of the contract, G 
there was an increase in the value of US dollar yis-a-vis Indian rupees 
and the appellant claimed from the respondent the difference of price 
of dollar as on the date of the contract and the date of supply. The claim 
of the appellant was recommended by the Government. The respondent, 
however, rejected the claim. 
H 
561 
562 
SUPREME COURT REPORTS [2003] SUPP. 4 S.C.R. 
A 
The appellant invoked the arbitration agreement between the 
parties. The arbitrators made a non-speaking award holding the 
respondent liable to compensate the appellant for exchange rate 
fluctuation. 
B 
The respondent filed a petition under Section 30 of the Arbitration 
Act, t 940 questioning the validity of the award on the ground that the 
contract provided did not provide for any escalation in price and thus, 
the award made by the arbitrators was against the provisions of the 
contract. The Single Judge of the High Court dismissed the petition 
filed by the respondent. The respondent thereafte1 preferred an appeal 
C before the Division Bench of the High Court. The Division Bench 
allowed the appeal. 
D 
The appellant challenged the judgment and order of the Division 
Bench. Allowing the appeal, the Court 
HELD. : 1.1. The jurisdiction of the court in interfer-ing with the 
non-speaking award is limited. If the claim of the claimant is not 
arbitrable having regard to the bar/prohibition created under the 
contract, the court can set aside the award but unless such a prohibition/ 
bar is found out, the court cannot exercise its jurisdirtion under 
E Section 30 of the Arbitration Act, 1940. [583-A-C) 
State of U. P. v. Allied Constructions, [2003] 6 SCALE 265; K. R. 
Raveendranathl'ln v. State ofKerala, (1998) 9 SCC 410; P. V. SubbaNaidu 
and Others v. Government of A. P. and Others, [1998) 9 SCC 407; H.P. 
p State Electricity Board v. R. J Shah and Company, [1999) 4 SCC 214; 
W. B. State Warehousing Corporation and Another v. Sushi! Kumar Kayan 
and Others, [2002) 5 SCC 679; Bharat Coking Coal Ltd. v. Mis Annapurna 
Construction, [2003] 7 SCALE 20; Rajasthan State Mines & Minerals Ltd. 
v. Eastern Engineering Enterprises and Another, [1999) 9 SCC 283; Food 
G Corporation of India v. Surendra, Devendra & Mahendra Transport Co., 
[2003) 4 SCC 80 2nd Shyama Charan Agarwala & Sons Ltd. v. Union 
of India Etc., [2002) 6 SC~ 201, referred to. 
1.2. Construction of the contract agreement was within the 
jurisdiction of the learned arbitrators having regard to the wide 
H nature, scope and ambit of the arbitration agreement and they cannot 
\ . 
PURE HELIUM INDIA PVT. LTD. v. O.N.G.C. 
563 
be said to have misdirected themselves in passing the award by taking A 
into consideration the conduct of the parties as also the circumstantial 
evidence. [577-F] 
1.3. It is trite

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