Bombay High Court High Court

Food Corporation Of India vs Anpo Shipping Co. Ltd. And Others on 2 November, 1995

Bombay High Court
Food Corporation Of India vs Anpo Shipping Co. Ltd. And Others on 2 November, 1995
Author: S Jhunjhunuwala
Bench: S Jhunjhunwala


JUDGMENT

S.M. Jhunjhunuwala, J.

1. The Food Corporation of India, the petitioners, have filed this petition for setting aside the Award dated 30th October, 1993 which award has been filed in this Court and numbered as ‘Award No. 178 of 1994’.

2. Briefly stated, relevant facts are as under :

(i) The petitioners are a statutory body established under the provisions of the Food Corporation of India Act, 1964 for the purpose of trading in the food-grains and foodstuffs and other matters connected therewith and incidental thereto and are an agency set up for the purpose of handling import/export, storage movement, distribution and sale of food-grains under the statute having the regional office situate at Bombay. The 1st respondents are the owners of the vessel ‘M. V. IGARUS’ (for short, ‘the said vessel’);

(ii) The petitioners had purchased Vietnam White Rice 35% of 1988-89 crop as per the standard specifications notified by the Central Food Corporation of S.R. Vietnam weighing 12271, 100 mt. net (245422 bags) from the Department of Foreign Trade, Ministry of Commerce, Government of Vietnam. The said rice was to be consigned to India;

(iii) A Charterparty agreement dated 19th August, 1989 was entered into and the said vessel of the 1st respondents was chartered for carriage of the said rice from Saigon Port to Marmagoa West Coast of India. The terms and conditions agreed between the parties in respect of the said Charterparty Agreement also incorporated Clause 57 which reads as under :

“Clause 57 :

All disputes arising under this Charter shall be settled in India in accordance with provisions of the Arbitration Act, 1940 of India, each party appointing an Arbitrator from out of the panel of Arbitrators maintained by the Indian Counsel of Arbitration, New Delhi, and the two Arbitrators appointing an Umpire whose decision in the event of disagreement between the Arbitrators shall be final and binding upon both the parties hereto. The Arbitrators and the Umpire shall be commercial men.”

(iv) By the said Charterparty Agreement dated 19th August, 1989, the 1st respondent agreed for carriage of the said cargo on the terms and conditions mentioned therein. The said Clause 57 provided for settlement of all disputes arising under the said Charter by reference to arbitration in accordance with the provisions of the Arbitration Act, 1940 (for short, ‘the Act’). Since dispute arose between the petitioner and the 1st respondent under the said Charter, reference thereof was made for arbitration by invoking arbitration agreement contained in said Clause 57. The petitioner appointed one A. S. Kulkarni as Arbitrator on their behalf and 1st respondents appointed one B. V. Shanbag as Arbitrator on their behalf. The Arbitrators appointed one K. L. Chugh as the Umpire.

(v) Before the said Arbitrator, the petitioners filed their statement of claim. The 1st respondent filed their written statement and counter-claim. The petitioners filed their reply/rejoinder to the counsel-claim of the 1st respondents. Before the Arbitrators, the parties chose not to lead any oral evidence. The Arbitrator after perusing the pleadings, the documents which were produced before them, hearing the counsel of the respective parties and considering the record before them including the case law relied upon by the parties through their respective counsel, made and published the said Award dated 30th October, 1993 which has been filed in this court and numbered as Award No. 178 of 1994. Under the said Award, the claim which the petitioners had put forward before the Arbitrators has been rejected and the counter-claim of the 1st respondent has awarded in favour of the 1st Respondents as mentioned therein.

3. While fairly conceding that an award is not vulnerable to any challenge thereto, Mr. Desai, learned counsel appearing for the petitioner has submitted that the Arbitrators have come to erroneous conclusion in rejecting the claim of the petitioner and awarding the counter-claim of the 1st respondent against the petitioner and if the documents produced before the Arbitrator and the case law relied upon by the counsel for the petitioner would have been properly considered by the Arbitrators, the Arbitrators would not have awarded the amount which has been awarded in favour of the 1st Respondents and against the Petitioners. Mr. Desai further submitted that the Arbitrators wrongfully entertained the Counter-claim of the 1st Respondents which was not maintainable and as such, the Arbitrators ought not to have granted any relief to the 1st Respondents.

4. Since the ambit and scope of challenge to an award under Section 30 of the Act has now been laid down by the catena of decisions of the Honourable Supreme Court as also of our court and other High Courts, an award is not vulnerable to any challenge thereto. When an Arbitrator is made the final arbiter of the disputes between the parties, an award is not open to challenge on the ground that the Arbitrator has reached a wrong conclusion or has failed to appreciate the facts. The appreciation of evidence by the Arbitrator is not a matter which the Court questions and considers. An arbitrator is the sole Judge of the quality as well as the quantity of evidence and it will not be for the Court to take upon itself the task of being a Judge on the evidence before the arbitrator. Once there is no dispute as to the contract, what is the interpretation of that contract is a matter for the arbitrator on which the court cannot substitute its own decision. If on a view taken of a contract, the decision of arbitrator on certain amount awarded is a possible view though perhaps not the only correct view, the award cannot be examined by the Court. An award is not invalid merely because by a process of inference and arguments it may be demonstrated that the arbitrator has committed some mistake in arriving at his conclusion. An award made by an arbitrator is conclusive as a judgment between the parties and the court is entitled to set aside an award if the arbitrator has misconducted himself or the proceedings or when the award has been made after the issue of an order by the Court superseding the arbitration or after the arbitration proceedings have become invalid under Section 35 of the Act or where an award has been improperly procured or is otherwise invalid under Section 30 of the Act. The Court, in dealing with an application to set aside an award, has not to consider whether the view of the arbitrator on the evidence is justified. The arbitrator’s adjudication is generally considered binding between the parties, for he is a tribunal selected by the parties and the power of the Court to set aside the award is restricted to cases set out in section in Section 30 of the Act. The Court has no appellate jurisdiction in deciding a petition to set aside an award under Section 30 of the Act. No case of misconduct on the part of the Arbitrators has been made out. The Award under challenge is an unreasoned award and it is not possible for this court to probe into the mind of the Arbitrators so as to find out as to what impelled them to make the Award which has been made by them. It is also well settled that unless the arbitration agreement provides for giving of the reasons by the arbitrator, it is not obligatory for the arbitrator to give reasons for making of an award and as such, since the arbitration agreement between the parties did not provide for the arbitration to give reasons for the Award, the Award under challenge though non-speaking Award cannot be said to be bad in law. There is no error of law apparent on the face of the Award inasmuch as no legal proposition of law has been set out in the Award itself making the basis thereof which can be said to be erroneous.

5. Though Mr. Desai has submitted that the counter-claim filed by the 1st Respondents before the Arbitrators was not maintainable, in the Reply/Rejoinder to the Counter-claim filed by the Petitioners before the Arbitrators the Petitioners did not raise the plea challenging the maintainability thereof. The Petitioners had denied the liability in respect of the claim of the 1st Respondents made in the Counter-claim on merits which has been adjudicated upon by the Arbitrators. The Petitioners had participated in the proceedings before the Arbitrators and submitted to their jurisdiction. Even other wise also, the arbitration agreement entered by and between the petitioners and the 1st respondents permitted reference of all disputes under the Charterparty to arbitration and as such, the 1st Respondents were entitled to make claim by way of counter-claim arising under the said charter against the petitioners in the arbitration proceedings before the Arbitrators and its cannot be said that by entertaining the counter-claim of the 1st respondents, the Arbitrators exceeded their jurisdiction.

6. Since there is no merit in the petition, the petition deserves to be dismissed at the stage of its admission. Accordingly, the petition is dismissed with no order as to costs.

7. Mr. Thacker, learned Counsel appearing for the 1st respondents, in view of Rule 787(5) of the Rules of this court, applicable on its Original Side, applies for judgment and decree in terms of the Award dated 30th October 1993. Since the petition to challenge the Award is just dismissed, the 1st respondents have becomes entitled for judgment and decree in terms of the said Award. Hence, judgment and decree in terms of the Award dated 30th October, 1993 filed in this court and numbered as ‘Award No. 78 of 1994.’

8. CC expedited.

9. Petition dismissed.