The Division Bench of the Delhi High Court in the case of M/S. Icon Sleeper Track Private Limited vs Rail Vikas Nigam Limited consisting of Justices Purushaindra Kumar Kaurav and Vibhu Bakhru held that courts through their interpretative process cannot re-write and create a new contract between the parties.
Facts:
This appeal was filed u/s 37 of the Arbitration & Conciliation Act, 1996 ("A&C Act") and Section 13 of the Commercial Courts Acts, 2015 ("CCA") against the order of the District Judge (Commercial Court)-01 Patiala House Courts, New Delhi, rejecting an application u/s 34 of the A&C Act and affirming the Arbitral Tribunal's 03.08.2010 award.
On 05.11.2007, M/s Vaman Prestressing Company Private Limited (VPCL) and Rail Vikas Nigam Limited (RVNL) entered into an agreement (RVNL). Disputes erupted between contracting parties during work execution. According to Clause 10.1 of the GCC, the parties tried to settle their differences amicably. The parties couldn't settle amicably. In line with Clause 10.2 of the GCC, a presiding arbitrator and two other members formed the AT. After hearings, the AT rejected the appellants' claim on 05.08.2019.
Procedural History:
The appellants challenged the AT's award in court u/s 34 of the A&C Act. The learned Commercial Court passed the impugned order and denied the application. Appellants filed an application u/s 37.
Contentions Made:
Petitioner: The impugned order and award passed by the AT was patently illegal and against the Public Policy of India and hence, deserved to be set aside by this court.
Respondent: In the exercise of power u/s 37 of the A&C Act, the Court cannot re-examine the entire matter and should confine its scope only to the extent of examining whether any patent illegality had been committed warranting interference u/s 37 of the A&C Act.
Observations of the Court:
The Bench held that the AT interpreted the terms of the contract and it is well settled that the views of an arbitral tribunal cannot be interfered with, except on the grounds as set out in Section 34 of the A&C Act. The AT held that any interference in the terms of the contract or giving a different meaning thereto than the intent which was understood by the contracting parties at the time of entering into the contract is not permissible. Relying on Shree Ambica Medical Stores & Ors. v. Surat People’s Co-operative Bank Ltd & Ors., it reiterated that the courts through their interpretative process cannot re-write and create a new contract between the parties. The courts are to simply apply the terms and conditions of the agreement as agreed between the contracting parties.
It concurred with the view that the view taken by the AT and the Commercial Court did not require any interference u/s 34 of the A&C Act.
The decision of the Court:
Finding no substance in this appeal, the Bench accordingly dismissed the same.
Case Title: M/S. Icon Sleeper Track Private Limited vs Rail Vikas Nigam Limited
Coram: Justice Purushaindra Kumar Kaurav, Justice Vibhu Bakhru
Case No: FAO(COMM) 38/2022
Advocates for Appellant: Advs. Mr. Vinay Navari, Mr. Keshav Ranjan
Advocates for Respondent: Advs. Mr. Udit Sethi, Ms. Priya Kanwa, Mr. Vivek G.B.
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