SIME DARBY ENGINEERING SDN. BHD. versus ENGINEERS INDIA LTD.

Citation: [2009] 11 S.C.R. 287 · Decided: 22-07-2009 · Supreme Court of India · Bench: A.K. GANGULY · Disposal: Case Allowed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

[2009] 11 S.C.R. 287 
SIME DARBY ENGINEERING SON. BHD. 
A 
v. 
ENGINEERS INDIA LTD. 
(Arbitration Petition No. 3 of 2009) 
JULY 22, 2009 
B 
[ASHOK KUMAR GANGULY, J.] 
_.., 
ARBITRATION AND CONCILIATION ACT, 1996: 
ss.2(1)(d), (f), 10(2) and 11 - International Commercial 
Arbitr3tion - Appointment of arbitral tribunal - Number of c 
arbitrators - Dispute regarding - Held: In the instant case, the 
relevant arbitration clause of agreement is silent about1: the 
number of arbitrator - Therefore, s.10(2) squarely applies·-
In view of the arbitration clause read with s. 10(2)1 clear that D 
'arbitral tribunal in the instant case would be consisting of a 
... , 
sole arbitrator - Policy decision that for contracts costing over 
a particular amount B committee of arbitrators would be 
composed of, cannot change the contractual clause -
Besides, the policy decision coming into force after the 
E 
contract between the parties had been entered into, the said 
policy decision cannot override the contract - UNCITRAL . 
Model Law on International Commercial Arbitration - Articles . 
2(b) and 10(2)-Administrative Law-Policy decision vis-a7vis, 
~ 
contractual clause. 
~ 
'F 
s. 10(2) - Number of arbitrators - Held: Parties' autonomy 
in the arbitration agreement must be given due importance 
in construing intention of parties - Parties have freedom to 
change the number of arbitrators even after the contract has 
been entered, and by mutual consent parties may amend the 
contract - Interpretation of commercial arbitration agreements. 
G 
-t. ·---1 
Redfern and Hunter, Law and Practice of International 
Commercial Arbitration, IV Edition, 2004, page 185 and Mustil 
287 
H 
288 
SUPREME COURT REPORTS 
[2009] 11 S.C.R. 
A and Boyd on Commercial Arbitration, 2nd Edition, page 17 4, 
referred ·to. 
B 
c 
D 
E 
F 
G 
H 
CIVIL ORIGINAL JURISDICTION : Arbitration Petition No. 
3 of 2009. 
Petition Under Section 11 Sub section (5) r/w Sub section 
(12) of The Arbitration & Conciliation Act, 1996. 
Oipankar Gupta, Anil Bhatnagar, Amit Dhingra, Aman 
Leekha and Dua Associates for the Petitioners. 
Mukul Rohtagi, Syed Naqvi, Namrata ,Kapoor Sharma, 
Diksha Rai Ninad Laud, Nikhil Rohtagi and Surya Kant for the 
Respondents. 
The following Order of the Court was delivered 
ORDER 
1. This petition has been filed under Section 11 of 
Arbitration and Conciliation Act 1996 (hereinafter referred "the 
said Act") by the petitioner praying for appointment of the 
arbitral tribunal to adjudicate the claims and disputes between 
the petitioner and the respondent. 
2. The petitioner is a company incorporated and existing 
under the laws of Malaysia and is engaged in the business of 
fabrication of all types of offshore and onshore structures and 
complexes. The respondent on the other hand is the company 
incorporated under the (Indian) Companies Act, 1956 and is 
inter alia engaged in the business of providing engineering and 
related technical services for petroleum refineries and other 
industrial projects. 
3. The necessary facts of the case are that Oil and Natural 
Gas Corporation Limited (ONGC) invited a tender vide 
notification dated November 17, 2003 for carrying work of 
Survey, Design, Engineering, Procurement, Fabrication, 
~ 
;i 
:iv 
t>'-
~ .. 
?--
SIME DARBY ENGINEERING SON. BHD. v. 
289 
ENGINEERS INDIA LTD. 
~ 
Anticorrosion and Weight coating, Laying of submarine pipeline, 
A 
Installation of SPM, Load out, Tie-down/Sea-fastening and 
various other jobs in respect of Mumbai High South Field 
offshore site. 
4. In connection with the said tender issued by ONGC, 
B 
respondent and petitioner entered into a Business Agreement 
on 22/01/2004 by which it was agreed that the respondent shall 
-{. 
quote as a bidder against the said Tender with the petitioner 
as a sub~contractor for identified scope of work. The tender was 
awarded by ONGC to the respondent by notice dated 10/03/ c 
2004 for the said fabrication and installation of D-1 Well-Cum-
Water Injection Platform at Mumbai High South field Off-shore 
site on a turnkey basis for a sum of US $ 62,3000,000/- and 
thereafter an agreement between the respondent and ONGC 
was entered into. Then, the respondent entered into a 
D 
subcontract with the petitioner which was signed on 29th of 
.i.,-
October 2004 and for Fabrication, Load Out and Transportation 
of Jacket, Piles, Conductors and Deck for D-1 Well-Cum-Water 
Injection Platform Project of ONGC 13t Bombay High South field 
off-shore

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