{"id":179654,"date":"1988-04-06T00:00:00","date_gmt":"1988-04-05T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/indian-oil-corporation-vs-indian-carbon-ltd-on-6-april-1988"},"modified":"2016-04-02T10:14:11","modified_gmt":"2016-04-02T04:44:11","slug":"indian-oil-corporation-vs-indian-carbon-ltd-on-6-april-1988","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/indian-oil-corporation-vs-indian-carbon-ltd-on-6-april-1988","title":{"rendered":"Indian Oil Corporation vs Indian Carbon Ltd on 6 April, 1988"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Indian Oil Corporation vs Indian Carbon Ltd on 6 April, 1988<\/div>\n
Equivalent citations: 1988 AIR 1340, \t\t 1988 SCR (3) 426<\/div>\n
Author: S Mukharji<\/div>\n
Bench: Mukharji, Sabyasachi (J)<\/div>\n
           PETITIONER:\nINDIAN OIL CORPORATION\n\n\tVs.\n\nRESPONDENT:\nINDIAN CARBON LTD.\n\nDATE OF JUDGMENT06\/04\/1988\n\nBENCH:\nMUKHARJI, SABYASACHI (J)\nBENCH:\nMUKHARJI, SABYASACHI (J)\nRANGNATHAN, S.\n\nCITATION:\n 1988 AIR 1340\t\t  1988 SCR  (3) 426\n 1988 SCC  (3)\t36\t  JT 1988 (2)\t212\n 1988 SCALE  (1)965\n CITATOR INFO :\n RF\t    1989 SC 973\t (9)\n\n\nACT:\n     Arbitration Act,  1940: Sections  30  and\t33-Award  of\nArbitrator-Reasoned   Award-What    is-Arbitration    clause\nrequiring  arbitrator\tto   give   reasoned   award-Whether\narbitrator required  to give detailed reasons-Sufficiency of\nreasons depends\t on facts  of the  case-Court not  to sit in\nappeal over award and review reasons.\n\n\n\nHEADNOTE:\n%\n     In respect\t of sale of raw petroleum coke by petitioner\nto respondent  there were  three agreements,  providing\t for\nsale, petitioner's  right to shift raw petroleum coke at the\nrisk and  expense of  the respondent  in case  of failure of\nRespondent to shift the same as agreed, and the Respondent's\nliability  to  pay  interest  on  the  value  of  stock\t not\nuplifted.\n     There was\tdefault in  payment and\t petitioner  stopped\nsupplies to  respondent, filed\ta suit and obtained an order\nof attachment of stocks of raw petroleum coke, to the extent\nof Rs.6\t crores, of  the Respondent. The respondent filed an\nappeal as  also an  application for  stay of  the suit under\nSection 34  of the Arbitration Act. Meanwhile the petitioner\nterminated the\tagreement. Thereafter the respondent filed a\nsuit and  the Court  passed  an\t order\tfor  restoration  of\nsupplies.\n     On an  appeal by  the petitioner, this Court stayed the\norder  of   restoration\t of   supplies,\t and   recorded\t the\ncompromise terms,  pursuant to\twhich all  proceedings\twere\nwithdrawn  by  the  parties.  The  petitioner's\t claim\twere\nreferred to  an Arbitrator,  who passed\t an  interim  award,\naccording to  which the\t petitioner was\t not entitled to any\ninterest nor any shifting charges. The petitioner challenged\nthe said  award, when  it was  filed in High Court. The High\nCourt dismissed the petition and this special leave petition\nis against the High Court's order.\n     It was  contended before this Court that the Arbitrator\nhas failed to give a reasoned award and so it is bad in law.\n     Dismissing the special leave petition, this Court,\n^\n     HELD: 1.  It is  obligatory in  England now  after\t the\nArbitration\n427\nAct, 1979,  that the  award should give reasons. The purpose\nof Section 12 of the Act requiring the tribunal to furnish a\nstatement of  reasons if  requested to\tdo so before it gave\nits decision is to enable the person whose property or whose\ninterests were\taffected,  to  know,  if  the  decision\t was\nagainst him, what the reasons were. [435B-C]\n     'Law of  Arbitration' by  Justice R.S.  Bachawat. First\nEdition 1983 pp. 320 and 321, referred to.\n     2.1 In  India, there  has been  a\ttrend  that  reasons\nshould be  stated in the award. The reasons that are set out\nmust be reasons which will not only be intelligible but also\ndeal with the substantial points that have been raised. When\nthe arbitration\t clause required  the arbitrator  to give  a\nreasoned award,\t the sufficiency  of the reasons depend upon\nthe facts  of the  particular case.  He is not bound to give\ndetailed reasons. [435C-D]\n     2.2 The Court does not sit in appeal over the award and\nreview the  reasons. The  Court can set aside the award only\nif it  is apparent  from the award that there is no evidence\nto support the conclusions or if the award is based upon any\nlegal proposition which is erroneous.[435D-E]\n     2.3 The award in question is unassailable. According to\nthe Arbitrator,\t because of  the letter\t dated 18th October,\n1982 of\t the petitioner\t addressed to the Respondent stating\nthat if\t the outstandings and interest are not paid, further\nsupplies would\tnot be\tmade, has  been acted  upon  by\t the\npetitioner,  which   had  not  delivered  any  coke  to\t the\nrespondent, or\tmade any  offer to do so, the petitioner was\nnot entitled  to the  interest in respect of the period from\n18th October,  1982 onwards,  nor  to  shifting\t charges  in\nrespect of  any shifting  on or after 18th October, 1982. On\nthis reasoning,\t he had\t given the award. How the Arbitrator\nhas  drawn  inference  is  apparent  from  the\treasons.  No\nproposition was stated in the aforesaid reasons, which could\nbe objected  to as an error of law. The reasons given by the\nArbitrator meet\t the requirements of a reasoned award. It is\napparent that  the arbitrator has not acted irrelevantly and\nunreasonably. [432E-G; 434G-H]\n     2.4 Arbitration  procedure should\tbe  quick  and\tthat\nquickness of the decision can always be ensured by insisting\nthat short intelligible indications of the grounds should be\navailable to  find out\tthe mind  of the  arbitrator for his\naction. This  was possible  in the  instant case  where\t the\narbitrator has spoken his mind, and he is clear as to how he\nacted\n428\nand why he acted in that manner.[434H; 435A]\n     Champsey Bhara  and Company  v. Jivraj  Balloo Spinning\nand Weaving  Company Ltd.,  AIR,  1923\tP.C.  66;  Hindustan\nSteelworks Construction Ltd. v. Shri C. Rajasekhar Rao,<\/a> 4 JT\n1987 3\tS.C.  239;  Siemens  Engineering  and  Manufacturing\nCompany of  India Ltd.\tv. Union  of  India,<\/a>  [1976]  Suppl.\nS.C.R. 489;  Rohtas Industries\tLtd. and  Another v.  Rohtas\nIndustries Staff Union and others<\/a>, [1976] 3 SCR 12 and Dewan\nSingh v. Champat Singh,<\/a> [1970] 2 SCR 903, referred to\n     Bremer  Handelsgesellschaft  v.  Westzucker,  [1981]  2\nLloyd's Law Reports 130, referred to.\n\n\n\nJUDGMENT:\n<\/pre>\n
     CIVIL APPELLATE  JURISDICTION: Special  Leave  Petition
\n(Civil) No. 4557 of 1988.\n<\/p>\n
     From the Judgment and Order dated 21.3.88 of the Bombay
\nHigh Court in Appeal No. 306 of 1988.\n<\/p>\n
     F.S. Nariman,  B.D.  Sharma  and  R.P.  Kapur  for\t the
\nPetitioner.\n<\/p>\n
     Soli J.  Sorabjee, Harsh  Mittre, Harish N. Salve, Jeel
\nPeres, D.N. Mishra and Mrs. A.K. Verma for the Respondents.\n<\/p>\n
     The Judgment of the Court was delivered by
\n     SABYASACHI MUKHARJI, J. This petition under Article 136
\nof the Constitution challenges the judgment and order of the
\nDivision Bench of the High Court of Bombay dated 21st March,
\n1988. The  petitioner in  this case  on 23rd June, 1961, had
\nagreed\tto   sell  to  the  predecessor\t of  respondent\t raw
\npetroleum coke.\t There was a second agreement on 22nd April,
\n1971. The  said agreement was arrived at between the parties
\nwhereunder it  was provided  that  in  case  the  respondent
\nfailed to  lift raw petroleum coke as agreed, the petitioner
\nwould have right to shift raw petroleum coke at the risk and
\nexpense of  the respondent.  There  was\t a  third  agreement
\nproviding that\tin case\t of delay in payment, the respondent
\nwould pay  interest at\t4 per  cent  over  the\tI.O.C.\tBank
\nborrowing rate,\t on the\t value of the stock not uplifted. It
\nappears that  on 5th  August, 1982,  the respondent  wrote a
\nletter to  the\tpetitioner  showing  inability\tto  pay\t the
\narrears of the price against delivery of raw petroleum coke.
\nOn 4th\tOctober, 1982  there was  a stock  of  about  13,760
\nM.T.S. Of  saleable raw\t petroleum  coke  lying\t at  Gauhati
\nRefinery. The petitioner on 18th October, 1982 wrote to the
\n429<\/span>
\nrespondent that unless the outstandings as on 1st September,
\n1982 and  interest were\t paid, the petitioner would not make
\nfurther supplies.  Thereafter the  petitioner filed Suit No.
\n2187 of 1982 for payment and for attachment before judgment.
\nOn 21st\t December, 1982,  it appears that there was an order
\nof attachment  of stocks of raw petroleum coke to the extent
\nof Rs.6\t crores of  the respondent.  The order was confirmed
\nafter notice.  Respondent filed\t Appeal\t No.  858  of  1983.
\nThereafter  respondent\t on  20th   ostler,  1983  filed  an
\napplication for\t stay of  the suit  under section  34 of the
\nArbitration Act,  1940 (hereinafter  called ‘the  Act’). The
\npetitioner on  11th July, 1983 terminated the agreement with
\neffect from  31.8.83. The  respondent thereafter  filed Suit
\nNo. 122\t of 1983  and applied  for an  order compelling\t the
\npetitioner to  make supplies.  The  learned  District  Judge
\npassed an  order on  28th April,  1984\tfor  restoration  of
\nsupplies. On  7th May,\t1984 in\t petitioner’s  appeal  viz.,
\nCivil Appeal  No. 2476\tof 1984, this Court stayed the above
\norder. On  24th May,  1984 this\t Court’s order setting aside
\nthe order  of the  learned District  Judge dated 28th April,
\n1984 and  recorded the\tcompromise terms.  Pursuant  to\t the
\ncompromise, all\t proceedings were  withdrawn by the parties.
\nOn 11th\t December, 1984\t matter relating to the petitioner’s
\nclaims in  respect of  interest\t on  stocks  held  from\t 1st
\nOctober, 1982 onwards and expenses of shifting raw petroleum
\ncoke from  1st October,\t 1982 upto  31st August,  1983, were
\nreferred to  arbitration of Shri A.K. Sarkar, a former Chief
\nJustice of  India. On 21st August, 1986 an interim award was
\npassed by the learned arbitrator. Interim award was filed in
\nthe High  Court of  Bombay and the petitioner challenged the
\nsaid award.  The learned  single Judge\tof  the\t High  Court
\ndismissed the  petition challenging  the interim  award. The
\nDivision Bench\tof the High Court of Bombay upheld the order
\nof the\tlearned single\tJudge.\tHence  this  petition  under
\nArticle 136 of the Constitution.\n<\/p>\n
     The main  contention urged\t before us  was that  it was
\nnecessary in  the present  trend  of  law  for\tthe  learned
\narbitrator to  have given  a reasoned award. The Arbitration
\nAct, 1979  in England  so enjoins. The arbitrator, according
\nto the\tpetitioner has\tfailed to do so. Hence the award was
\nbad and as such the decision of the High Court was wrong and
\nleave should  be granted  from the  said  decision  and\t the
\nmatter be  referred to\tthe Constitution  Bench\t as  several
\ncases are pending on this point.\n<\/p>\n
     The learned  single Judge\tof the\tHigh  Court  in\t his
\ndecision had  observed that the award was undoubtedly not an
\nelaborately reasoned award setting out all the reasons which
\nprompted the  learned arbitrator to arrive at the conclusion
\nhe did reach, but it was a speaking
\n430<\/span>
\naward. The  learned Judge  however, held  that\tit  was\t not
\nnecessary to  examine this  aspect since  even if  it was  a
\nspeaking order,\t it was\t not bad in law. It is true that the
\nlaw as\tit stands  upto date  since the decision of Champsey
\nBhara and  Company v.  Jivraj Balloo  Spinning\tand  Weaving
\nCompany Ltd.,  A.I.R. 1923 P.C. 66 that it was not necessary
\nthat all  awards should\t be speaking  awards.  See  in\tthis
\nconnection the\tobservations  of  this\tCourt  in  Hindustan
\nSteelworks Construction\t Ltd. v. Shri C.Rajasekhar Rao,<\/a> 4 JT
\n1987 3 S.C. 239.\n<\/p>\n
     Previously the  law both  in England and India was that
\nan arbitrator’s\t award might  be set  aside for error of law
\nappearing on the face of it, though the jurisdiction was not
\nlightly to  be exercised. Since question of law could always
\nbe dealt  with by means of a special case this is one matter
\nthat could  be taken  into account when deciding whether the
\njurisdiction to\t set aside an award on this ground should be
\nexercised or  not. The\tjurisdiction was one that existed at
\ncommon law independently of statute. In order to be a ground
\nfor setting  aside the award, an error in law on the face of
\nthe award  must be  such that  there could  be found  in the
\naward, or  in any  document actually  incorporated with\t it,
\nsome legal  proposition which was the basis of the award and
\nwhich was  erroneous. See  Halsbury’s Laws  of England,\t 4th
\nedition. paragraph  623, page  334. The\t law has undergone a
\nsea change in England. It is obligatory in England now after
\nthe  Arbitration  Act,\t979,  that  the\t award\tshould\tgive
\nreasons.\n<\/p>\n
     In the  instant case.  the arbitrator  has set  out the
\nhistory in the interim award. The arbitrator has stated that
\nthe agreement  dated 22nd  April. 1970 provided that I.C.L..
\nwill uplift  all available  coke  produced  at\tthe  Gauhati
\nRefinery by  which  name  also\tthe  Noonmati  Refinery\t was
\ncalled. the  said upliftment  being so\tregulated  that\t the
\nquantity  uplifted   every  week   was\tequivalent   to\t the
\nproduction of  coke at the refinery in the previous week and
\nthat whereas  it  was  thereby\tfurther\t provided  that\t the
\nupliftment by  I.C.L. shall  also be  as regulated  that the
\naccumulated quantity  of coke in the refinery coke yard does
\nnot fall  below 2500 tons and does not exceed 4500 tons. The
\nother history  of the  matter, it was recited that the order
\ndated 24th May, 1984 was passed by consent of the parties by
\nthis Court  that the claim of the Indian oil Corporation for
\ninterest on  stocks said  to have  been held  in the Gauhati
\nRefinery from  1st October,  1982 onwards  and its claim for
\nexpenses of  shifting the coke from 1st October, 1982 upto 3
\n1st August,  1983 would\t be referred to the arbitration of a
\nretired Judge  of the  Supreme Court  mutually acceptable to
\nthe parties.  Two preliminary  issues, the arbitrator framed
\nwere, namely, (1) Is the
\n431<\/span>
\nclaimant entitled  to charge  any interest on unlifted stock
\nof raw\tpetroleum coke\tin view\t of its letter dated October
\n18, 1982?  and (2)  Is the claimant entitled to any shifting
\ncharges in  view of its letter dated 18th October, 1982? The
\ngist of\t the letter  dated 18th\t October, 1982 is set out in
\nthe arbitration\t agreement. The arbitrator in his award pro-
\nto observe as follows:\n<\/p>\n
\t  “And whereas\tit is  not in  dispute\tbetween\t the
\n\t  parties  that\t  since\t the  said  letter  of\t18th
\n\t  October, 1982, I.O.C. had not delivered or offered
\n\t  to deliver any raw petroleum coke for I.C.L.
\n\t  Now,\ttherefore,  having  heard  counsel  for\t the
\n\t  parties and  perused the  documents and statements
\n\t  filed by them, the despatch and receipt of none of
\n\t  which\t  is   disputed,   and\t having\t  considered
\n\t  thereafter, I adjudge, hold and award as follows:
\n\t  The letter  dated 18th  October, 1982 is no bar to
\n\t  Indian  oil\tCorporation’s  claim   for  shifting
\n\t  charges and interest in respect of the period from
\n\t  1st October, 1982 to 17th October, 1982.
\n\t  Because  of\tthe  said   letter  which  has\tbeen
\n\t  admittedly  acted   upon   by\t  the\tIndian\t oil
\n\t  Corporation Ltd.  which had not delivered any coke
\n\t  to Indian  Carbon Ltd.  Or made any offer to do so
\n\t  the Indian oil Corporation Ltd. is not entitled to
\n\t  the interest claimed in respect of the period from
\n\t  18th October, 1982 onwards nor to shifting charges
\n\t  in respect  of any  shifting done on or after 18th
\n\t  October, 1982.”<\/p><\/blockquote>\n
     The aforesaid grounds are the reasons of the arbitrator
\nfor making  the award.\tThe award  is that  the\t Indian\t oil
\nCorporation is not entitled to any interest nor any shifting
\ncharges.  The  reasons\tfor  the  said\tconclusion  are\t the
\naforesaid three factors mentioned by the arbitrator. How the
\narbitrator has drawn inference is apparent from the reasons.
\nIt is  to be noted that this Court has been insisting on the
\narbitrators to\tgive some  indications to  indicate how\t the
\nmind of\t the arbitrator\t acts. This  Court in  the  case  of
\nSiemens Engineering  and Manufacturing Company of India Ltd.
\nv. Union  of India,<\/a>  [1976] Suppl.  S.C.R. 489 was concerned
\nwith the  decision of  the Collector  of Customs. This Court
\nobserved that where an authority makes an order
\n432<\/span>
\nin exercise of a quasi-judicial function, it must record its
\nreasons in  support  of\t the  order  it\t makes.\t This  Court
\nobserved further  that every  quasi-judicial order  must  be
\nsupported by reasons.\n<\/p>\n
     In\t Rohtas\t  Industries  Ltd.  and\t Another  v.  Rohtas
\nIndustries Staff  Union and  others<\/a>, [1976]  3 SCR  12 where
\nthis Court  was concerned with an award under section 10A of
\nthe Industrial\tDisputes Act, 1947. This Court observed that
\nthere was  a need  for a  speaking order  where considerable
\nnumbers are  affected in  their substantial  rights. It\t was
\nfurther reiterated that in such a situation a speaking order
\nmay well be a facet of natural justice or fair procedure. In
\nDewan Singh  v. Champat\t Singh,<\/a> [1970] 2 SCR 903, this Court
\nreiterated that\t it was\t an implied  term of the arbitration
\nagreement that\tthe arbitrators\t must decide  the dispute in
\naccordance with\t the ordinary  law and\tthey  cannot  decide
\ndisputes on  the basis\tof  their  personal  knowledge.\t The
\nproceedings, it was held, before the arbitrators were quasi-
\njudicial  proceedings\tand  they   must  be   conducted  in
\naccordance with\t the principles\t of natural justice. It was,
\ntherefore,  obligatory\t to  give   reasons.  As   mentioned
\nhereinbefore there  has been  since then  trend that reasons
\nshould be  stated in  the award and the question whether the
\nreasons are  necessary\tin  ordinary  arbitration  agreement
\nbetween the  parties has  been referred\t to the\t Constituion
\nBench.\n<\/p>\n
     In this  case, however,  we are  in agreement  with the
\nHigh Court  of Bombay that reasons were stated in the award.
\nWe have\t set out hereinbefore the three grounds, namely, (1)
\nThe letter  dated 18th October, 1982 is no bar to Indian oil
\nCorporation’s claim  for shifting  charges and\tinterest  in
\nrespect of  the\t period\t from  1st  October,  1982  to\t17th
\nOctober, 1982.\t(2) The inference drawn from the contents of
\nthe letter  and (3)  Because of\t the said  letter which\t has
\nadmittedly been\t acted upon  by the  Indian oil\t Corporation
\nLtd., and  which had  not delivered  any coke  to the Indian
\nCarbon Ltd.  Or made  any offer to do so. For these reasons,
\nthe arbitrator held that the Indian oil Corporation Ltd., is
\nnot entitled  to interest  claimed in  respect of the period
\nfrom 18th October, 1982 onwards nor to shifting charges from
\n18th October,  1982. These  are the  reasons for  giving the
\naward. No  error of  law was  pointed out  in those reasons.
\nIndeed no  proposition of  law was  stated in  the aforesaid
\nreasons, which\tcould be  objected to  as an  error of\tlaw.
\nThere was, however, no error of fact. It was a possible view
\nto take.  It could  not be  urged that\tit was an impossible
\nview to\t take. The arbitrator has made his mind known on the
\nbasis of  which he  has\t acted\tthat,  in  our\topinion,  is
\nsufficient to  meet the\t requirements even  if it be reasons
\nshould be stated in the award. It is one thing to say that
\n433<\/span>
\nreasons should\tbe stated  and another thing to state that a
\ndetailed judgment  to be  given in support of an award. Even
\nif it be held that it is obligatory to state the reasons, it
\nis not obligatory to give a detailed judgment. This question
\nwas considered\tby the\tCourt of Appeal in England in Bremer
\nHandelsgesellschaft v.\tWestzucker,  [1981]  2\tLloyd’s\t Law
\nReports 130.  There Lord Donaldson speaking for the court at
\npages 132 and 133 of the report observed as follows:\n<\/p>\n
\t  “It is  of  the  greatest  importance\t that  trade
\n\t  arbitrators working  under  the  1979\t Act  should
\n\t  realize that\ttheir whole  approach should  now be
\n\t  different. At\t the end of the hearing they will be
\n\t  in a\tposition to  give a decision and the reasons
\n\t  for that  decision.  They  should  do\t so  at\t the
\n\t  earliest possible  moment. The  parties will\thave
\n\t  made\ttheir\tsubmissions  as\t  to  what  actually
\n\t  happened and\twhat is the result in terms of their
\n\t  respective rights  and liabilities.  All this will
\n\t  be fresh  in the arbitrators’ minds and there will
\n\t  be no\t need for  further written submission by the
\n\t  parties. No  particular form of award is required.
\n\t  Certainly no\tone wants  a formal  “Special Case”.
\n\t  All that  is necessary  is  that  the\t arbitrators
\n\t  should  set\tout  what,  on\ttheir  view  of\t the
\n\t  evidence, did or did not happen and should explain
\n\t  succinctly why,  in the  light of  what  happened,
\n\t  they have  reached their  decision and  what\tthat
\n\t  decision is.\tThis is\t all  that  is\tmeant  by  a
\n\t  “reasoned award”.\n<\/p><\/blockquote>\n
\t       For example, it may be convenient to begin by
\n\t  explaining briefly how the arbitration came about-
\n\t  “X sold  to Y\t 200 tons  of soyabean\tmeal on\t the
\n\t  terms of  GAFTA Contract  100 at  US. $Z  per\t ton
\n\t  c.i.f. Bremen.  X claimed damages for non-delivery
\n\t  and we  were\tappointed  arbitrators”.  The  award
\n\t  could then  briefly tell  the factual story as the
\n\t  arbitrators saw  it. Much  would be  common ground
\n\t  and would  need no elaboration. But when the award
\n\t  comes to  matters  in\t controversy,  it  would  be
\n\t  helpful if  the arbitrators  not only\t gave  their
\n\t  view of what occurred, but also made it clear that
\n\t  they have  considered any  alternative version and
\n\t  have rejected it, e.g., “The shippers claimed that
\n\t  they shipped\t100 tons  at the end of June. We are
\n\t  not satisified  that this  is so”,  or as the case
\n\t  may be.  “We are  satisfied that  this was not the
\n\t  case”.  The  arbitrators  should  end\t with  their
\n\t  conclusion  as   to  the   resulting\trights\t and
\n\t  liabilities of the parties. There is nothing about
\n434<\/span>
\n\t  this which  is remotely  technical,  difficult  or
\n\t  time consuming.\n<\/p><\/blockquote>\n
\t       It  is  sometimes  said\tthat  this  involves
\n\t  arbitrators in  delivering judgments and that this
\n\t  is something\twhich requires legal skills. This is
\n\t  something of\ta half\ttruth. Much  of the  art  of
\n\t  giving  a   judgment\tlies   in  telling  a  story
\n\t  logically,  coherently  and  accurately.  This  is
\n\t  something which  requires skill,  but it  is not a
\n\t  legal skill  and it is not necessarily advanced by
\n\t  legal training.  It is certainly a judicial skill,
\n\t  but arbitrators  for this  purpose are  Judges and
\n\t  will have  no difficulty  in acquiring it. Where a
\n\t  1979 Act  award differs  from a judgment is in the
\n\t  fact that  the arbitrators will not be expected to
\n\t  analyse the  law and\tthe authorities.  It will be
\n\t  quite sufficient that they should explain how they
\n\t  reached their\t conclusion, e.g.,  “We regarded the
\n\t  conduct of the buyers, as we have described it, as
\n\t  constituting a  repudiation of  their\t obligations
\n\t  under the  contract and  the subsequent conduct of
\n\t  the sellers, also as described, as amounting to an
\n\t  acceptance of\t that repudiatory conduct putting an
\n\t  end to  the contract”. It can be left to others to
\n\t  argue\t that\tthis  is  wrong\t in  law  and  to  a
\n\t  professional Judge,  if leave\t to appeal is given,
\n\t  to analyse  the authorities.\tThis is\t not to\t say
\n\t  that where  arbitrators are  content\tto  set\t out
\n\t  their reasoning  on questions\t of law\t in the same
\n\t  way as  Judges, this\twill  be  unwelcome  to\t the
\n\t  Courts. Far  from it. The point which I am seeking
\n\t  to make  is that  a reasoned\taward, in accordance
\n\t  with the  1979 Act,  is wholly  different from  an
\n\t  award in  the form  of a  special case.  It is not
\n\t  technical, it\t is not\t difficult to draw and above
\n\t  all it  is  something\t which\tcan  and  should  be
\n\t  produced promptly and quickly at the conclusion of
\n\t  the hearing.\tThat is\t the time when it is easiest
\n\t  to produce  an award with all the issues in mind.”
\n\t  See the  observations in  Russel  on\tArbitration,
\n\t  20th Edn.,  page 291 Reasons for the Award and the
\n\t  decision referred to therein. “<\/p><\/blockquote>\n
     In a case of this nature, issues are simple, points are
\nfresh  and  facts  are\tclear,\tthe  reasons  given  by\t the
\narbitrator, in\tour opinion,  meet  the\t requirements  of  a
\nreasoned award.\t It is\tapparent that the arbitrator has not
\nacted irrelevantly  or unreasonably.  Arbitration  procedure
\nshould be  quick and  that quickness  of  the  decision\t can
\nalways\t be ensured  by insisting  that\t short\tintelligible
\nindications of the grounds
\n435<\/span>
\nshould be  available to\t find out the mind of the arbitrator
\nfor his\t action. This  was possible  in the instant case. In
\nthe instant  case the arbitrator has spoken his mind, and he
\nis clear as to how he acted and why he acted in that manner.\n<\/p>\n
     The purpose  of section  12 of the English Tribunal and
\nInquiries Act  which  required\tthe  statutory\ttribunal  to
\nfurnish a  statement of\t the reasons  if requested  to do so
\nbefore it  gave its  decision was  to enable  a person whose
\nproperty or  whose interests  were affected  to know  if the
\ndecision was against him what the reasons were. Justice R.S.
\nBachawat in  his Law  of Arbitration,  First  Edition  1983,
\npages 320  and 321  states that\t the provision\twas read  as
\nmeaning that  proper and adequate reasons must be given. The
\nreasons that are set out must be reasons which will not only
\nbe intelligible\t but also  deal with  the substantial points
\nthat have  been raised. When the arbitration clause required
\nthe arbitrator\tto give\t a reasoned award and the arbitrator
\ndoes give  his reasons\tin the award, the sufficiency of the
\nreasons depend\tupon the facts of the particular case. He is
\nnot bound  to give  detailed reasons. The Court does not sit
\nin appeal  over the  award and review the reasons. The Court
\ncan set\t aside the  award only\tif it  is apparent  from the
\naward that  there is  no evidence to support the conclusions
\nor if the award is based upon any legal proposition which is
\nerroneous.\n<\/p>\n
     Judges  in\t that  light,  the  award  in  question\t was
\nunassailable in the instant case.\n<\/p>\n
     In the  aforesaid view  of the  matter, we\t are of\t the
\nopinion that  the High\tCourt was right in the view it took.
\nThe  special   leave  petition\t fails\tand  is\t accordingly
\ndismissed.\n<\/p>\n
G.N.\t\t\t\t    Petition dismissed.\n436<\/span>\n\n\n\n<\/pre>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Indian Oil Corporation vs Indian Carbon Ltd on 6 April, 1988 Equivalent citations: 1988 AIR 1340, 1988 SCR (3) 426 Author: S Mukharji Bench: Mukharji, Sabyasachi (J) PETITIONER: INDIAN OIL CORPORATION Vs. RESPONDENT: INDIAN CARBON LTD. DATE OF JUDGMENT06\/04\/1988 BENCH: MUKHARJI, SABYASACHI (J) BENCH: MUKHARJI, SABYASACHI (J) RANGNATHAN, S. CITATION: 1988 […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-179654","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nIndian Oil Corporation vs Indian Carbon Ltd on 6 April, 1988 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/indian-oil-corporation-vs-indian-carbon-ltd-on-6-april-1988\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Indian Oil Corporation vs Indian Carbon Ltd on 6 April, 1988 - 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