LexSWAN GOLD MINING LTD. versus HINDUSTAN COPPER LTD.
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[2014] 10 S.C.R. 559 SWAN GOLD MINING LTD. v. HINDUSTAN COPPER LTD. (Civil Appeal No. 9048 of 2014) SEPTEMBER 22, 2014 [M.Y. EQBAL AND PINAKI CHANDRA GHOSE, JJ.] ARBITRATION ACT, 1996: A B s.34 - Setting aside of arbitral award - Power of court to c set aside the award would be exercised only in cases where court finds that arbitral award is on the fact of it erroneous or patently illegal or in contravention of the provisions of the Act - Arbitrator is the final judge of facts - The finding of facts recorded by him cannot be interfered with on the ground that D the terms of contract were not correctly interpreted by him. s.34(2)(b)(ii) - Arbitral award challenged as opposed to public policy - Court is precluded from re-appreciating the evidence and to arrive at different conclusion by holding that the. arbitral award is against the public policy. E Dismissing the appeal, the Court HELD: 1.1. Arbitrator's decision is generally considered binding between the parties and, therefore, the power of the court to set aside the award would be exercised only in cases where the court finds that the arbitral award is on the fact of it erroneous or patently illegal or in contravention of the provisions of the Act. Court shall not ordinarily substitute its interpretation for F that of the Arbitrator. [para 12] [565-F-G] G 1.2. Similarly, when the parties have arrived at a concluded contract and acted on the basis of those terms and conditions of the contract then substituting new 559 H 560 SUPREME COURT REPORTS [2014] 10 S.C.R. A terms in the contract by the Arbitrator or by the court would be erroneous or illegal. Arbitrator appointed by the parties is the final judge of the facts. The finding of facts recorded by him cannot be interfered with on the ground that the terms of the contract were not correctly 8 interpreted by him. [para 12-13] [565-H; 566-A-B] 1.3. In the instant case, in the letter of intent, in continuation of which the work contract was issued, it was specifically mentioned that the execution of work shall be on the terms of notice inviting tender (NIT) and C other agreed discussions/negotiations subsequently held between the parties. Finally the Work Order was issued in continuation with the letter of intent. The appellant has accepted the liability of payment of excise duty, sales tax, service tax and other taxes and, therefore, D it cannot be held that clause 4.9.1 of the Work Order is inconsistent with the terms and conditions of contract documents. The Arbitrator has rightly come to the conclusion that the responsibility on the appellant is to abide by the terms and conditions of the Work Order. The E High Court has rightly held that there is no patent illegality in the Award passed by the Arbitrator and, as such, it needs no interference u/s 34 of the Act. [para 16, 18, 19 and 20] [567-F; 568-F-H; 569-A] F 2.1. The words "public policy" or "opposed to public policy", find reference in s.23 of the Contract Act and also s.34 (2)(b)(ii) of the Arbitration and Conciliation Act, 1996. Interpretation of the contract is matter of the Arbitrator, who is a Judge, chosen by the parties to determine and decide the dispute. Court is precluded from re- G appreciating the evidence and to arrive at dUferent conclusion by holding that the arbitral award is against the public policy. [para 22] [569-F-G] 2.2. In the instant case, the parties have entered into H concluded contract, agreeing to terms and conditions of SWAN GOLD MINING LTD. v. HINDUSTAN COPPER 561 LTD. the said contract, which was finally acted upon. In such A a case, the parties to the said contract cannot back out and challenge the award on the ground that the same is against the public policy. Even assuming the ground available to the appellant, the award cannot be set aside because it is not contrary to fundamental policy of Indian B law or against the interest of India or on the ground of atent illegality. [para 21] (569-D-E] Oil and Natural Gas Corporation Ltd. vs. Saw Pipes Ltd. 2003 (3) SCR 691 = (2003) 5 SCC 705 - held inapplicable. C Case Law Reference: 2003 (3) SCR 691 held inapplicable para 9 CIVIL APPELLATE JURISDICTION : Civil Appeal No. 9048 of 2014. D From the Judgment and Order dated 19.09.2012 in APO No. 280 of 2012 of the High Court at Calcutta. A. Sharan, Amit Kumar, Atul Kumar, Ankit Rajgarhia, Somesh Jha for the Appellant. P.P. Rao, Deba
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