Bombay High Court
Oil And Natural Gas Corporation Of India vs Ganesh Benzoplast Ltd on 3 November, 2025
2025:BHC-OS:19900
CARBPL.11401.2024 .doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
COMMERCIAL ARBITRATION PETITION (L) NO. 11401 OF 2024
WITH
INTERIM APPLICATION (L) NO. 24424 OF 2024
IN
COMMERCIAL ARBITRATION PETITION (L) NO. 11401 OF 2024
Oil and Natural Gas Corporation Ltd. ....Petitioner
Versus
Ganesh Benzoplast Ltd. ....Respondent
Mr. Kevic Setalvad, Senior Advocate a/w. Mr. Bhushan Shah, Mr.
Aakash Mehta and Mr. Gaurav Edekar i/b Mansukhlal Hiralal & Co.,
for Petitioner/Applicant.
Mr. Gautam Ankhad a/w Mr. Gaurang Jhaveri, Mr. Harsh Nishar,
Mrs. Vandana Bait and Ms. Iti Sharma i/b Mr. Amey Deshpande for
Respondent.
CORAM : SOMASEKHAR SUNDARESAN, J.
RESERVED ON : April 14, 2025
PRONOUNCED ON : November 3, 2025
JUDGEMENT:
Context and Factual Background:
1. This is a Petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 ("the Act") challenging an arbitral award dated Digitally signed by Page 1 of 26 AARTI AARTI GAJANAN November 3, 2025 GAJANAN PALKAR PALKAR Date: Aarti Palkar 2025.11.03 12:37:11 +0530 ::: Uploaded on - 03/11/2025 ::: Downloaded on - 03/11/2025 21:21:46 ::: CARBPL.11401.2024 .doc October 31, 2023 passed unanimously by a three-member arbitral tribunal ("Impugned Award") in connection with a contract dated July 16, 2001 ("Agreement") for operation and maintenance of a 'geotechnical vessel' ("GTV") called Samudra Sarvekshak ("GTV Vessel") owned by the Petitioner, Oil and Natural Gas Corporation Ltd. ("ONGC").
2. ONGC is an owner of multiple GTVs and multipurpose support vessels ("MSV") for which it regularly issues contracts for operations and maintenance, some of which have been granted to the Respondent, Ganesh Benzoplast Ltd. ("Benzoplast"). While the Agreement covers the services relating to the GTV Vessel, ONGC and Benzoplast also have contracts relating to similar activity relating to MSVs. The Agreement had a tenure between May 1, 2001 and April 30, 2004 i.e. 3 years for a value of USD ~9.42 million inclusive of operational consumables, docking cost, service charges and the like, excluding Customs Duty. The Agreement was but an extension of an earlier agreement governing the same GTV Vessel expiring on April 30, 2001.
3. Although the tenure of the Agreement was scheduled to expire on April 30, 2004, ONGC terminated the Agreement on March 22, 2003, citing a material breach of the Agreement. The disputes and differences between the parties led to arbitration proceedings, culminating in the Impugned Award.
There were also disputes and differences relating to maintenance of other Page 2 of 26 November 3, 2025 Aarti Palkar ::: Uploaded on - 03/11/2025 ::: Downloaded on - 03/11/2025 21:21:46 ::: CARBPL.11401.2024 .doc vessels including MSVs and this is relevant in view of what has been contended in these proceedings.
4. While the Petition challenging the Impugned Award entails 29 grounds, in the course of the hearing of this Petition, ONGC has focussed on and pressed one prime ground, namely, that the Impugned Award has been passed by a tribunal without jurisdiction in the matter.
5. The factual matrix relevant for consideration of the challenge formulated by ONGC in the hearing may be summarised thus:-
a) The Agreement contained an arbitration clause entailing a three-member arbitral tribunal. When ONGC came to a view that Benzoplast had materially breached the Agreement, ONGC issued a cure notice dated January 17, 2003 invoking Clause 1.17.2, calling for cure within 30 days from receipt of the notice (" Cure Notice"), failing which the Agreement would be terminated;
b) The Agreement was terminated by notice March 22, 2003 ("Termination Notice"), with the termination to take effect on March 24, 2003;
c) On July 12, 2003, Benzoplast invoked arbitration, claiming wrongful termination. An arbitral tribunal comprising retired judges, Justice A.M. Ahmadi, Justice K.J. Shetty and Justice Page 3 of 26 November 3, 2025 Aarti Palkar ::: Uploaded on - 03/11/2025 ::: Downloaded on - 03/11/2025 21:21:46 ::: CARBPL.11401.2024 .doc Ajit Sengupta came to be constituted and the first meeting was held on September 25, 2003;
d) A Statement of Claim was filed on January 28, 2004 by Benzoplast while a Written Statement was filed in response by ONGC on May 21, 2004;
e) On December 23 and 24, 2004, Benzoplast presented three separate applications seeking interim relief in relation to the GTV Vessel and two other vessels Samudra Prabha and Samudra Suraksha;
f) ONGC expressed its willingness to refer the disputes relating to the GTV Vessel to the 'Outside Experts Committee' ("OEC") in terms of the Agreement and called upon Benzoplast to send a written request for the OEC within 14 days. Benzoplast too wrote in identical terms to ONGC on the same day;
g) On October 26, 2005, a three-member OEC was appointed comprising Mr. T.N. Seshan, Mr. R.K. Bhargava and Mr. R.K.D Shah. On April 21, 2008, owing to resignation by Mr. Seshan, ONGC states that the entire OEC was re-constituted to now comprise Mr. J.L. Zutshi, Mr. G.C. Raghubir and Mr. Surendranath;
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h) On August 4, 2008, ONGC terminated the conciliation proceedings citing Benzoplast's disagreement to conciliate through the reconstituted OEC and on August 26, 2008, called on the Learned Arbitral Tribunal to resume arbitration proceedings;
i) However, on October 21, 2008, yet another OEC was formed comprising Mr. Ishwari Dutt, Mr. T.S. Vijayaraghavan and Mr. Surendranath and on November 10, 2008 , ONGC wrote to Benzoplast suggesting suspension of the arbitration proceedings pending conciliation;
j) ONGC claims that Benzoplast was not agreeable to the new OEC and only wanted to continue with the OEC with Mr. Seshan being replaced. The OEC did not function until October 2011 - ONGC attributes this to adjournments sought by Benzoplast on two occasions in February 2009 and March 2009. It is stated that in October 2011, Benzoplast sought appointment of a new member in place of Mr. T.N. Seshan, who had resigned due to ill health, but ONGC did not agree;
k) On March 15, 2013, Benzoplast wrote to ONGC calling termination of the conciliation proceedings and indicating that arbitration would be invoked. This letter was clearly in relation to the GTV Vessel;
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l) Eventually, on June 13, 2013, Benzoplast issued a fresh invocation notice complaining that the OEC was not being manned and the matter was kept pending and it would be appropriate to resume arbitration. Benzoplast appointed Justice (Retd.) Devender Gupta as the nominee arbitrator. This notice too was clearly in respect of the GTV Vessel;
m) On August 21, 2013, ONGC wrote to Justice (Retd.) M.S. Rane pointing to the invocation notice dated June 13, 2013 from Benzoplast and appointed Justice Rane " without prejudice to its rights and contentions" as its nominee arbitrator "from ONGC's side for adjudication of disputes / claims of M/s GBL including counterclaims of ONGC". This was copied to Benzoplast;
n) On the same day, another letter was written to Benzoplast, intimating that Benzoplast had terminated the conciliation proceedings on March 15, 2013 " but without appointing your Arbitrator in terms of Contract provision ". Since Benzoplast had for the first time indicated in June 2013 that it had appointed Justice Gupta as arbitrator, ONGC had also nominated Justice Rane as its arbitrator " without prejudice to its rights and contentions";
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o) On September 18, 2013, Justice Gupta wrote to Justice Rane that the earlier arbitral tribunal could not have functioned because one arbitrator passed away and the other had resigned. He suggested that the Presiding Arbitrator of the earlier tribunal Justice Ahmadi could be appointed as the Presiding Arbitrator by him and Justice Rane. ONGC made a similar suggestion too by its letter dated September 25, 2013;
p) However, this did not come about and the two arbitrators appointed Justice (Retd.) C.K. Thakker as the Presiding Arbitrator;
q) Pleadings were filed before the Learned Arbitral Tribunal
- Statement of Claim; Statement of Defence; Counter-Claim; replies and rejoinders to the Claim and Counter-Claim; and indeed, pleadings in an application from ONGC claiming that Benzoplast's claim was now barred by limitation;
r) Arbitration proceedings went on. Eventually, Justice Rane was replaced by Justice (Retd.) J.P. Devadhar in November 2019;
s) On October 31, 2023, the Impugned Award was passed. The contention on limitation was repelled. The contentions on the original invocation notice not being in conformity with the Agreement were dealt with. In a nutshell:
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i) Benzoplast's claims were partly allowed granting recovery of USD ~1.36 million and Rs. ~28.72 lakh and Rs. 1 crore towards costs;
ii) ONGC's counter-claim relating to short deployment of crew by Benzoplast was allowed for Rs. ~98.32 lakhs.
This was to be adjusted against what was payable to Benzoplast by ONGC;
iii) The rest of the claims and counter-claims were dismissed;
iv) The net all-inclusive and adjusted amount awarded and payable by ONGC to Benzoplast was USD ~1.36 million and Rs. ~30.40 lakhs; and
v) Post-award interest at 12% per annum was granted from the date of the Impugned Award until realisation. Contentions of the Parties:
6. I have heard at length, Mr. Kevic Setalvad, Learned Senior Advocate on behalf of ONGC and Mr. Ashwani Dhatwaliya, Learned Advocate on behalf of Benzoplast. I have perused the material on record with the benefit of their well-referenced written submissions bearing in mind what was pressed by them in the course of these proceedings. Page 8 of 26
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7. The core objection to the Impugned Award is based on jurisdiction. Mr. Setalvad makes multiple points on behalf of ONGC in this regard. According to him, the Learned Arbitral Tribunal was totally without jurisdiction.
8. According to Mr. Setalvad, the Learned Arbitral Tribunal had been manned by the three arbitrators who had been appointed in 2003 and had held their first meeting on September 25, 2003. However, the very composition of the Learned Arbitral Tribunal that rendered the Impugned Award is patently illegal, according to Mr. Setalvad inasmuch as Justice Ahmadi ought to have been the Presiding Arbitrator. Justice Gupta and Justice Rane could have been respectively, substitutes for Justice Sengupta (who had passed away) and Justice Shetty (who had resigned). Justice Ahmadi had neither resigned nor passed away when the Learned Arbitral Tribunal comprising Justice Thakker, Justice Gupta and Justice Rane was formed and this in itself is a foundational infirmity.
9. According to Mr. Setalvad, although ONGC had nominated Justice Rane to the Learned Arbitral Tribunal, ONGC had always stated that such nomination was without prejudice to ONGC's rights and contentions. Therefore, ONGC's participation in the arbitral proceedings right from the constitution of the Learned Arbitral Tribunal to the filing of pleadings and making of submissions before it could not come in the way of a jurisdictional Page 9 of 26 November 3, 2025 Aarti Palkar ::: Uploaded on - 03/11/2025 ::: Downloaded on - 03/11/2025 21:21:46 ::: CARBPL.11401.2024 .doc infirmity of the Learned Arbitral Tribunal. Therefore, Mr. Setalvad would contend, the commencement and continuation of arbitral proceedings were illegal.
10. The other core contention of Mr. Setalvad is that of limitation. According to him, the termination of the agreement was on March 22, 2003 while the second invocation notice leading to the constitution of the Learned Arbitral Tribunal was issued ten years later. According to Mr. Setalvad, this cannot be saved by reliance upon Section 77 of the Act to exclude time spent on conciliation from the period of limitation because the conciliation proceedings commenced after the first arbitral tribunal was formed while it is the second arbitral tribunal that was constituted ten years later to consider claims barred by limitation. In aid of this contention, Mr. Setalvad would contend that there are distinct differences in the content of the first invocation notice and the second invocation notice and the latter cannot be regarded as a continuation of the former.
11. Mr. Dhatwaliya, on behalf of Benzoplast would contend that ONGC's contentions are completely untenable. He would point to the record to indicate that the first arbitral tribunal was unavailable. Justice Shetty had resigned, Justice Sengupta had passed away, and in fact, Justice Gupta had recommended to Justice Rane that since Justice Ahmadi was available, the two arbitrators appoint him. He would indicate that ONGC could have well Page 10 of 26 November 3, 2025 Aarti Palkar ::: Uploaded on - 03/11/2025 ::: Downloaded on - 03/11/2025 21:21:46 ::: CARBPL.11401.2024 .doc supported this view at the relevant time but there is nothing to show that it did. It is apparent, he would contend, that it was ONGC's nominee arbitrator who did write back stating that the two nominee arbitrators would appoint the third arbitrator. Therefore, it is apparent that the two arbitrators do not appear to have had consensus on Justice Ahmadi.
12. For its part, Mr. Dhatwaliya would submit, Benzoplast had in fact recommended appointment of Justice Ahmadi but it was ONGC that was opposed to Justice Ahmadi being the presiding arbitrator. He would point to a letter dated September 25, 2013 by which Benzoplast urged ONGC to proceed with appointment of Justice Ahmadi as the presiding arbitrator so that the long-pending proceedings could resume. That apart, he would submit, it was for ONGC to have taken up such an objection before the Learned Arbitral Tribunal, which it did not. No issue has been framed on this subject, and this objection is purely an afterthought that is not found in the record. Merely pointing to have appointed Justice Rane "without prejudice"
to ONGC's rights is of no consequence, Mr. Dhatwaliya would contend.
13. As regards limitation, Mr. Dhatwaliya would submit that the parties were meant to engage in conciliation and work before the OEC comprising Mr. Seshan had been underway. All that ONGC had to do was to replace Mr. Seshan on his resignation but they appointed another OEC and this has wasted time. The Learned Arbitral Tribunal has dealt with the issue Page 11 of 26 November 3, 2025 Aarti Palkar ::: Uploaded on - 03/11/2025 ::: Downloaded on - 03/11/2025 21:21:46 ::: CARBPL.11401.2024 .doc of limitation raised by ONGC and has also returned plausible findings on limitation and on merits, and does not deserve any intervention by this Court under Section 34 of the Act.
ANALYSIS AND FINDINGS:
14. I have examined the record and the findings of the Learned Arbitral Tribunal in the Impugned Award. A few foundational facts are clear as daylight in the matter. The disputes and differences between the parties originally covered not just the GTV Vessel but also three MSV Vessels. ONGC had decided to terminate the contracts relating to all four vessels. Composition of Tribunal and Invocation:
15. The disputes and differences between the parties in relation to the three MSVs were resolved through the conciliation process and the parties even executed a settlement agreement dated March 13, 2010 with a payment of Rs. 15.26 crores by ONGC representing a full and final settlement. On December 6, 2011, it was claimed by Benzoplast that the acceptance of settlement had been under duress and in fact the recommendation for the settlement amount had been in excess of what had been disclosed. Arbitration was sought to be re-initiated on the premise that the settlement was vitiated by non-disclosure and had not been in the spirit of the settlement. A Learned Single Judge of this Court firmly repelled this Page 12 of 26 November 3, 2025 Aarti Palkar ::: Uploaded on - 03/11/2025 ::: Downloaded on - 03/11/2025 21:21:46 ::: CARBPL.11401.2024 .doc contention when faced with an application under Section 11 of the Act on the premise that ONGC was not appointing its nominee arbitrator. A challenge to the same in the Supreme Court also was not entertained leaving open the pursuit of any action available in law. This led to a Civil Suit having been filed, which is pending.
16. In sharp contrast, in relation to the pending dispute in connection with the GTV Vessel, ONGC nominated Justice Rane as its nominee arbitrator. It is also clear that Benzoplast had indicated that Justice Gupta was appointed in place and stead of Justice Sengupta who had passed away. ONGC nominated Justice Rane but there was no expression of shock or surprise since it was clear that the arbitration was pending in relation to disputes connected to the GTV Vessel. ONGC has indeed used the phrase "without prejudice to its rights and contentions " in its letter to Justice Rane nominating him but all this does is to enable ONGC to raise the objection it is now raising when the Learned Arbitral Tribunal actually conducted proceedings. There is nothing on record to show an application under Section 16 having been filed. On the contrary, Mr. Setalvad relies on the letter dated August 21, 2013 written by ONGC to Justice Rane and the incantation of the phrase "without prejudice to its rights and contentions ". Thereafter, this is not an issue that appears to have been raised before the Learned Arbitral Tribunal.
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17. In fact, the issue of the Learned Arbitral Tribunal not having jurisdiction by reason of Justice Ahmadi not being the Presiding Arbitrator is not part of the issues framed. There is nothing on record to show that this issue was proposed by ONGC and was not framed and that ONGC protested. It is quite apparent that this argument is completely an afterthought to attack the Impugned Award. Benzoplast had indeed desired that Justice Ahmadi be the Presiding Arbitrator as is seen from its submissions and in its letter to ONGC. That Justice Gupta desired that Justice Ahmadi be the Presiding Arbitrator is also clear in his letter to Justice Rane. Today, ONGC claims that the only approach ought to have been for Justice Ahmadi to have been the Presiding Arbitrator. There is not a whisper on the record as to why ONGC did not pursue this line even when it was positively requested by Benzoplast. After the Learned Arbitral Tribunal was constituted and ONGC participated in it including by filing a Counter-Claim and when the framing of issues does not indicate this was raised, in my opinion, it is late in the day to come up with this novel argument at the stage of proceedings under Section 34 of the Act.
18. In fact, the objection is inexplicable. Even while ONGC indicates that under Section 16(2) of the Act there is an outer limit to raise a jurisdictional objection, all Mr. Setalvad could allude to, for indicating the objection before such statutory deadline, is ONGC's letter to Justice Rane Page 14 of 26 November 3, 2025 Aarti Palkar ::: Uploaded on - 03/11/2025 ::: Downloaded on - 03/11/2025 21:21:46 ::: CARBPL.11401.2024 .doc asserting that he was being appointed without prejudice to its rights. If its rights were intended not to be prejudiced by making the appointment, that right should also have been exercised after the Learned Arbitral Tribunal was constituted by filing an application under Section 16 of the Act. In my opinion, this objection is wholly devoid of merit and deserves to be firmly rejected.
Limitation:
19. The other objection raised on behalf of ONGC is that of limitation. There are two facets to this objection. One is that it is the invocation notice of June 13, 2013 that led to the Learned Arbitral Tribunal being constituted. This was issued ten years after the termination of the Agreement. The other facet is that claims sought to be pursued have to be made known in the invocation notice "and not thereafter" in terms of the explicit language in the arbitration clause contained in the Agreement. A comparison of the Statement of Claim filed before the Learned Arbitral Tribunal would show that there was more in it compared with the Statement of Claim filed before the first arbitral tribunal. Therefore, there is no scope to rely on the first invocation notice for such claims as now pursued, which would then mean that they are barred by limitation.
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20. This too has to be stated to be rejected. The Learned Arbitral Tribunal has examined these contentions. The Learned Arbitral Tribunal has noticed the provisions of Section 77 of the Act, which are extracted below:-
77. Resort to arbitral or judicial proceedings.-- The parties shall not initiate, during the conciliation proceedings, any arbitral or judicial proceedings in respect of a dispute that is the subject-matter of the conciliation proceedings except that a party may initiate arbitral or judicial proceedings where, in his opinion, such proceedings are necessary for preserving his rights.
[Emphasis Supplied]
21. In the instant case, the facts are clear. The parties had a dispute. They initiated arbitration. After the first meeting and fixation of schedule for arbitration, they went in for conciliation before the OEC. While the OEC before which the disputes relating to the GTV Vessel did not gain traction, the OEC seized of the disputes relating to the three MSVs resolved the disputes. The parties even executed a settlement agreement. Indeed, there was a dispute about how consent for the settlement had been obtained but that is a different matter. When refusing to refer to arbitration renewed disputes over the three MSVs, a Learned Single Judge of this Court, by an order dated September 28, 2012 firmly held a view that the OEC proceedings constituted conciliation proceedings under the Act. That view was not interfered with by the Supreme Court. What is clear is that the time spent before the OEC was Page 16 of 26 November 3, 2025 Aarti Palkar ::: Uploaded on - 03/11/2025 ::: Downloaded on - 03/11/2025 21:21:46 ::: CARBPL.11401.2024 .doc time spent in conciliation and that too by consent of the parties. It is apparent that ONGC sought to suspend the proceedings pending consideration by the OEC. When Mr. Seshan could not continue, ONGC sought to replace the entire OEC instead of replacing him. This was not accepted and the conciliation was called off and arbitration resumed.
22. I have examined the letter nominating Justice Gupta and the correspondence from advocates of Benzoplast with ONGC and correspondence between Justice Gupta and Justice Rane. There is no doubt that the dispute pursued in the arbitration was over the termination of the Agreement governing the GTV Vessel. That was suspended and resumed. ONGC is unable to explain why it did not do contemporaneously, what it is canvassing today i.e. accept Justice Ahmadi as the Presiding Arbitrator. That said, the Learned Arbitral Tribunal came to be formed but to continue the arbitration that had already been invoked. A close reading of the Statement of Claim filed before the Learned Arbitral Tribunal would show that the claim is indeed about the termination of the Agreement. Section 77 prohibited filing of the Statement of Claim when conciliation was underway. Once it was put to bed, the Statement of Claim was filed.
23. The attempt to invoke the observation of the Supreme Court in Geo Miller1 does not carry ONGC's case any higher. As set out in Paragraph 1 Geo Miller & Co. (P) Ltd. Vs. Rajasthan Vidyut Utpadan Nigam Ltd. - (2020) 14 SCC 643 Page 17 of 26 November 3, 2025 Aarti Palkar ::: Uploaded on - 03/11/2025 ::: Downloaded on - 03/11/2025 21:21:46 ::: CARBPL.11401.2024 .doc 28 of that judgement, indeed, the Learned Arbitral Tribunal is required to examine the negotiation history which must be pleaded and placed on record. The Learned Arbitral Tribunal has done exactly that and found the breaking point in the negotiations. Benzoplast wrote to ONGC to continue with the OEC with a replacement for Mr. Seshan and when ONGC did not respond, Benzoplast called off the conciliation and immediately nominated Justice Gupta. Benzoplast always considered him to be a replacement for Justice Sengupta, and it is the complexity added by ONGC having been (then) desirous of a different Presiding Arbitrator that is now being sought to be made the ground to challenge the composition. In any event, the findings of the Learned Arbitral Tribunal on the facet of limitation and the interplay with the conciliation efforts is a plausible view that must not be lightly interfered with.
24. The above findings of the Learned Arbitral Tribunal cannot be regarded as perverse at all. They speak to the facts and the material on record. The Learned Arbitral Tribunal has compared the Statement of Claim filed on January 28, 2004 before the Learned Arbitral Tribunal in its earlier composition and the Statement of Claim filed before the Learned Arbitral Tribunal on January 1, 2014. The Learned Arbitral Tribunal repelled the contention that the first invocation notice had not quantified the claim and therefore the quantification now being made is time-barred. The Learned Page 18 of 26 November 3, 2025 Aarti Palkar ::: Uploaded on - 03/11/2025 ::: Downloaded on - 03/11/2025 21:21:46 ::: CARBPL.11401.2024 .doc Arbitral Tribunal found that the arbitration clause does not require a quantification of claim. The dispute raised related to the assault on the termination as illegal and that continued. The Act permits even a Statement of Claim to be amended and supplemented. Benzoplast indicates that the invoices raised until then had formed subject matter of the earlier invocation. The Learned Arbitral Tribunal is right in its eminently plausible view that merely quantifying the claim amount does not constitute a new claim not made earlier.
25. What is strange is that when ONGC is raising the issue of the claim being time-barred it has chosen to file a Counter-Claim before the Learned Arbitral Tribunal, which the Learned Arbitral Tribunal has rightly held to be maintainable.
Findings on Merits:
26. The Learned Arbitral Tribunal has also ruled on the limited tender that had been issued by ONGC to replace Benzoplast during the life of the relationship. Holding that the limited tender relating to the MSV's was outside the scope of consideration of these arbitral proceedings, the Learned Arbitral Tribunal has returned a clear plausible finding that the limited tender in relation to the GTV Vessel had been issued without waiting for the cure period, indicating a premediated mind to replace Benzoplast. This was Page 19 of 26 November 3, 2025 Aarti Palkar ::: Uploaded on - 03/11/2025 ::: Downloaded on - 03/11/2025 21:21:46 ::: CARBPL.11401.2024 .doc also held to have sent a signal to the business community that Benzoplast was in breach of obligations owed to ONGC. It was found that ONGC had acted in undue haste to replace Benzoplast replacing with Shipping Corporation of India. Examining the material on record including the reports of various committees forming part of the evidence and the conduct of the parties, the Learned Arbitral Tribunal, which is the master of the evidence and the final forum for finding of facts has returned a clear unanimous view that the termination of the Agreement was illegal and not tenable.
27. The Learned Arbitral Tribunal then went on to assess the quantified claims and counter-claim components and returned the final findings on what is owed by ONGC to Benzoplast and by Benzoplast to ONGC to award the net amount as being payable by ONGC to Benzoplast. A number of claims raised by both sides have also been rejected with reasons. Loss of Profits:
28. What is assailed on behalf of ONGC is the award for loss of profit that is said to be in conflict with Clause 18A of the Agreement, which is said to bar consequential losses. The contention made today in the Section 34 proceedings about Clause 18A of the Agreement being a bar on award of loss of profits does not find mention at all in the arbitral proceedings. Page 20 of 26
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29. The Written Submissions filed before me invokes Clause 18A of the Agreement and alludes to this objection having been taken in the Statement of Defence at Page 557 of the Petition. However, a reading of Page 557 of the Petition would indicate that there is not even a whisper that consideration of loss of profit is barred by contract. Therefore, the invocation of Ssangyong Engineering2 is of no avail to ONGC since there is no basis for ONGC to contend that the Learned Arbitral Tribunal misinterpreted the contract and considered what was outside its scope of consideration. It was not even the case of ONGC that Clause 18A of the Agreement rendered the consideration of loss of profit as a consequential loss, for the Learned Arbitral Tribunal to have been able to interpret this clause and return a finding. The contention not having been taken before the Learned Arbitral Tribunal, it is not appropriate for me to delve into whether loss of profit is necessarily a consequential and indirect loss or whether it is a direct loss.
30. The objection based on Clause 18A is evidently yet another afterthought brought to bear with hope to sustain the challenge to the Impugned Award under Section 34 of the Act - quite similar to the contention about the composition of the Learned Arbitral Tribunal and the need to have had Justice Ahmadi as the Presiding Arbitrator (when ONGC had not responded to the very same request from Benzoplast to have Mr. 2 SSyangyong Engg. & Construction Co. Ltd. V. NHAI - (2019) 15 SCC 131 Page 21 of 26 November 3, 2025 Aarti Palkar ::: Uploaded on - 03/11/2025 ::: Downloaded on - 03/11/2025 21:21:46 ::: CARBPL.11401.2024 .doc Ahmadi approved as the Presiding Arbitrator). The Statement of Defence takes the stand that the termination not being illegal, there can be no claim. That apart, the contention is that no loss having been suffered, there can be no claim for loss of profit. This generic defence is now sought to be presented as a cogent and specific objection relating to Clause 18A of the Agreement, to contend that the Impugned Award is outside the scope of the Agreement.
31. I am afraid such an approach is unacceptable. There is nothing in the contentions pressed before me that necessitates setting aside the Impugned Award.
Scope of Review under Section 34:
32. I cannot lose sight of the scope of jurisdiction under Section 34 of the Act - it is well covered in multiple judgements of the Supreme Court including Dyna Technologies3, Associate Builders4, Ssyangyong, Konkan Railway5 and OPG Power6. Even implied reasons that are discernible, may be inferred by the Section 34 Court, to support the just and fair outcome arrived at in arbitral awards. To avoid prolixity, I do not think it necessary to burden this judgement with quotations from these judgements. 3 Dyna Technologies Private Limited v. Crompton Greaves Ltd - (2019) 20 SCC 1 4 Associate Builders vs. Delhi Development Authority - (2015) 3 SCC 49 5 Konkan Railways v. Chenab Bridge Project Undertaking - 2023 INSC 742 6 OPG Power vs. Enoxio - (2025) 2 SCC 417 Page 22 of 26 November 3, 2025 Aarti Palkar ::: Uploaded on - 03/11/2025 ::: Downloaded on - 03/11/2025 21:21:46 ::: CARBPL.11401.2024 .doc
33. Suffice it to say (to extract from just one of the foregoing), in Dyna Technologies, the Supreme Court held thus:
"24. There is no dispute that Section 34 of the Arbitration Act limits a chal- lenge to an award only on the grounds provided therein or as interpreted by various courts. We need to be cognizant of the fact that arbitral awards should not be interfered with in a casual and cavalier manner, unless the court comes to a conclusion that the perversity of the award goes to the root of the matter without there being a possibility of alternative interpretation which may sustain the arbitral award. Section 34 is different in its approach and cannot be equated with a normal appellate jurisdiction. The mandate un- der Section 34 is to respect the finality of the arbitral award and the party autonomy to get their dispute adjudicated by an alternative forum as provided under the law. If the courts were to interfere with the arbitral award in the usual course on factual aspects, then the commercial wisdom behind opting for alternate dispute resolution would stand frustrated.
25. Moreover, umpteen number of judgments of this Court have categorically held that the courts should not interfere with an award merely because an al- ternative view on facts and interpretation of contract exists. The courts need to be cautious and should defer to the view taken by the Arbitral Tribunal even if the reasoning provided in the award is implied unless such award portrays perversity unpardonable under Section 34 of the Arbitration Act."
[Emphasis Supplied] Page 23 of 26 November 3, 2025 Aarti Palkar ::: Uploaded on - 03/11/2025 ::: Downloaded on - 03/11/2025 21:21:46 ::: CARBPL.11401.2024 .doc Conclusions:
34. To summarise:-
a) There is nothing wrong much less patently illegal in the composition of the Learned Arbitral Tribunal;
b) The conduct of proceedings by the Learned Arbitral Tribunal cannot at all be regarded as ex facie illegal as is being contended by ONGC;
c) Far from there being an absence of waiver, ONGC did not even file an application under Section 16 of the Act before the Learned Arbitral Tribunal. Mr. Setalvad's reliance on the phrase "without prejudice to its rights and contentions" in the letter from ONGC to its nominee arbitrator does not constitute a jurisdictional objection being raised before the Learned Arbitral Tribunal. At best it is an assertion of rights generically, which never translated into an actual attempt to enforce its perceived (and reserved) right;
d) Worse, ONGC actively participated and even filed a Counter-Claim, an element of which has also come to be allowed;
e) The Learned Arbitral Tribunal's findings on ONGC's objection on the ground of limitation are impeccable, as explained above;Page 24 of 26
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f) The contention about there being a distinction between the claim filed in 2004 and the claim filed in 2014 does not take ONGC's case any distance. The Learned Arbitral Tribunal has returned a fair, commonsensical and reasonable finding on quantification of a claim when arbitration is actually underway not constituting a new claim;
g) The contention on the award of loss of profit being in conflict with Clause 18A is not acceptable when this was not even the case made out before the Learned Arbitral Tribunal.
35. In these circumstances, no case is made out for an intervention. The contentions made on behalf of ONGC are untenable on facts. The Petition is hereby dismissed. Interim Applications, if any, shall also stand disposed of in the same terms.
Costs:
36. These proceedings involving a commercial dispute, in my opinion, costs must follow the event, particularly taking into account the standard of examining whether the objections taken are reasonable in nature. Considering a fair and broad estimation of costs that would be involved, in my opinion, token costs in the sum of Rs. 5 lakhs would be appropriate. ONGC shall pay such sum of Rs. 5 lakhs to Benzoplast within a week of the Page 25 of 26 November 3, 2025 Aarti Palkar ::: Uploaded on - 03/11/2025 ::: Downloaded on - 03/11/2025 21:21:46 ::: CARBPL.11401.2024 .doc expiry of four weeks from the date of upload of this judgement on this Court's website.
37. All actions required to be taken pursuant to this order shall be taken upon receipt of a downloaded copy as available on this Court's website.
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