Dismissed

Atul Limited v. Navdeep Enviro and Technical Service Pvt. Ltd.

Gujarat HC3 Jul 2018FA/1939/2018

Case brief

AI extract

What is this about?

The High Court dismissed an appeal filed against a judgment rejecting an application to set aside an arbitration award. The Court held that the detailed award had cogent reasons and did not suffer from material illegality or lack of reasoning, hence no interference was warranted under public policy grounds.

What did the court decide?

First Appeal as well as the Civil Application are dismissed.

Atul Limited Vs Navdeep Enviro and Technical Service Pvt. Ltd. — Arbitration | Gujarat HC (2018)

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C/FA/1939/2018 ORDER

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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

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R/FIRST APPEAL No. 1939 of 2018 With CIVIL APPLICATION No. 1 of 2018

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ATUL LIMITED

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Versus

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NAVDEEP ENVIRO AND TECHNICAL SERVICE PVT. LTD.

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Appearance :

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NANAVATI ASSOCIATES for the PETITIONER

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for the RESPONDENT(s) No.

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CORAM: HONOURABLE Mr. JUSTICE AKIL KURESHI and HONOURABLE Mr. JUSTICE B.N. KARIA 3^rd July 2018

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ORAL ORDER (PER : HONOURABLE Mr. JUSTICE AKIL KURESHI)

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This appeal is directed against the judgment of the learned Additional District Judge, Ankleshwar dated 30^th December 2017 passed in Misc. Civil Application No. 34 of 2013 filed by the present appellant.

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Briefly stated, the facts are as under :

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Appellant-Atul Limited had entered into three separate contracts with the respondent no. 1 herein-Navdeep Environ & Tehnical Service Private Limited [hereinafter to be referred to as, “ the Contractor ”]. These agreements had arbitration

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Page 1 of 5

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C/FA/1939/2018 ORDER

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clause. The disputes which surfaced between the parties were referred to the Sole Arbitrator. Before the Arbitrator, the contractor as well as Atul limited raised claims and counterclaims. The Arbitrator by his award dated 11^th August 2007 held that the Atul Limited has to pay a sum of Rs. 10,75,163=69. with interest to the contractor. In the process, Arbitrator also came to the conclusion that under the first contract, the contractor had to receive unpaid sum of Rs. 20,50,231/= and a sum of Rs. 5,55,000/= in the second contract. As against this, the counter claim of Atul Limited was allowed to the extent of Rs. 15,30,067=31p. in all. The net of Rs. 10,75,163=69p was found to be payable by Atul Limited to the contractor. This award, the appellant challenged before the District Court by filing application for setting aside the award. The learned Judge found no reason to interfere and therefore, rejected such application, upon which the present appeal has been filed.

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Appeal thus arises out of an award of the arbitrator. As per settled law, scope of interference by the Court in such circumstances is extremely narrow. Principally, the ground of the award being against the public policy which of course has

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Page 2 of 5

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C/FA/1939/2018 ORDER

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been elaborated by the Supreme Court in number of judgments would be a reason to interfere.

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We have perused the award of the Arbitrator which is a detailed, well-considered and a reasoned award. The Arbitrator has separated the discussion for three independent contracts and the disputes arising in each respective contract. Number of claims made by the contractor have not been found acceptable, and therefore, rejected. To the extent, the Arbitrator found that the contractor was not paid his dues, the claims have been accepted. We do not see that the award suffers from any material illegality.

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Learned counsel for the appellant vehemently contended that on material aspects, the award is a non-reasoned award. The arbitrator has not cited any reasons, in his opinion, for awarding a certain sum of amount to the contractor. We do not agree with the suggestion of the learned counsel for the appellant. The Arbitrator has given detailed and cogent reasons for each claim. For example, for accepting the contractor’s claim of Rs. 20,50,231/=, the Arbitrator has come to the conclusion that the contractor may have failed to supply air compressor, chain pulley block and hot water piping, the same

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Page 3 of 5

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C/FA/1939/2018 ORDER

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would only mean that Atul Limited is entitled to set-off the value thereof. It cannot mean that such dues which have remained unpaid under the contract are not to be paid. The entire discussion of the Arbitrator on this claim has to be seen in light of these observations. No part of the award can be seen in isolation for criticism that reasons are not assigned. May be that in the final portion of the discussion on the topic, the arbitrator did not repeat the reasons, however, reading the entire discussion as a whole would suggest that the arbitrator was convinced that the contractor had executed the contract in its entirety; subject to certain minor glitches and upon completion and commissioning of the plant, the contractor was entitled to full remuneration. The last instalment of 20% was to be released on successful commissioning of the plant. The Atul Limited would also release the performance guarantee.

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Coming to the further claim of Rs. 5,55,000/= of the contractor which was accepted by the arbitrator, we are also of the view that the Arbitrator has given detailed reasons. This claim arises out of the second contract. The arbitrator held that the contracted work was not fully completed, and therefore, did not award the full amount to the contractor nor ordered

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Page 4 of 5

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C/FA/1939/2018 ORDER

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release of the performance bank guarantee. However, to the extent of work performed and bills raised, we find no infirmity in the view taken by the District Court rejecting the application for setting aside the arbitration award.

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First Appeal is dismissed alongwith Civil Application.

[Akil Kureshi, J.]

[B.N Karia, J.]

Prakash

Page 5 of 5

Atul Limited v. Navdeep Enviro and Technical Service Pvt. Ltd.

Case brief

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Atul Limited v. Navdeep Enviro and Technical Service Pvt. Ltd.

Case brief

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