The High Court of Jharkhand, while dismissing an appeal directed against the judgment dated 25th February 2020 passed by the learned Presiding Officer, Commercial Court, in Commercial Case, dismissing the petition filed on behalf of the appellant under section 34 of the Arbitration and Conciliation Act, 1996 challenging the award dated 11th March 2018 passed by the learned Arbitrator, held that an arbitral award may be set aside if the Court finds that it is vitiated by patent illegality appearing on the face of the award.
Brief Facts:
The appellant issued an advertisement for the appointment of retail outlet dealers for several locations in Jharkhand on 27th June 2010 guided by the Brochure for Selection of Petrol/Diesel Retail Outlet Dealers dated 15.09.2008. Respondent No. 1 applied for the location Barsot, Hazaribagh vide application dated 27th July 2010. A registered lease deed dated 3rd March 2012 for the land involved in this case was executed in favor of respondent no.1 and the appellant took possession of the land. The subject land was partly bought by Lauki Prasad and partly by Jagdish Prasad. A complaint was filed against respondent no. 1 for submission of false information. A show cause notice was issued against respondent no. 1 to which he replied. After considering his reply, the appellant terminated the DPSL/dealership agreement by order dated 9th April 2016 which was challenged before this Court in a writ petition and this Court appointed Hon'ble Mr. Justice Lok Nath Prasad (Retd.) as Arbitrator. Learned Arbitrator held that though wrong information was given, the wrong information given was not very serious and was made inadvertently.
Contentions of the Appellant:
The learned counsel appearing on behalf of the appellant contended that respondent No. 1 made a false statement in his initial application dated 27th July 2010 and the affidavit of Lauki Prasad and Jagdish Prasad dated 24th July 2010 which was filed along with the application of the respondent No. 1 was also false.
Observations of the court:
The court noted that the learned arbitrator has passed a well-reasoned award considering the case of the respective parties and also considering that the owners of the land had executed a lease deed in favor of the appellant at the instance of the claimant who was granted dealership after participating in the selection process. It cannot be said that the award of damages is non-speaking and violative of Section 31(3) of the Act of 1996.
The court observed that the scope of scrutiny of the award under section 34 of the Act of 1996 is limited to the grounds mentioned therein. A mere contravention of the substantive law of India, by itself, is no longer a ground available to set aside an arbitral award. As per section 34 (2-A) as introduced vide 2015 amendment, a domestic arbitral award may also be set aside if the Court finds that it is vitiated by patent illegality appearing on the face of the award and it has been provided that an award shall not be set aside merely on the ground of an erroneous application of the law or by reappreciation of evidence.
The decision of the Court:
The Jharkhand High Court, dismissing the appeal, held that the award did not call for any interference under the Act of 1996 and did not suffer from any patent illegality on the face of the award.
Case Title: M/s Bharat Petroleum Corporation Limited vs Anant Kumar Singh & Anr.
Coram: Hon’ble Mr. Justice Shree Chandrashekhar and Hon’ble Mrs. Justice Anubha Rawat Choudhary
Case No.: Commercial Appeal No. 15 of 2020
Advocate for the Appellant: Mr. P.P.N. Roy
Advocate for the Respondent: Mr. Ajit Kumar
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