Oil & Natural Gas Corporation Ltd. vs Geological Technologies
2001 Latest Caselaw 569 Bom

JUDGMENT

1. Both the petitions are being disposed of by this common judgment as they challenge the same award.

2. Disputes and differences having arisen between the parties reference was made to an Arbitral Tribunal, who by the award dated 14-9-1995 allowed some of the claims of Geological Technologies Ltd. Oil & Natural Gas Corporation Ltd. (ONGC) have challenged the award on various grounds. However, at the hearing of the petitions the challenge to the award is basically on two grounds : (1) that the arbitrators have misconstrued the provisions of Clause 12A of the Contract and consequently awarded moneys beyond the term of the contract and (2) No interest for the period before the filing of the statement of claim i.e., 3-2-1995 by Geological Technologies Ltd., could have been granted as they had made no demand for interest.

2.1 Geological Technologies Ltd., in their petition have also challenged the award and at the hearing their learned Counsel contends that the Arbitral Tribunal failed to exercise jurisdiction in not awarding the claim in respect of the increased payment in BGD Rupee terms in respect of rental and manday charges.

3. We will first deal with the contentions as raised on behalf of the ONGC. Their learned counsel has taken me to clause as modified which Exh. E-1 to the petition. From the said clause it is contended that the Arbitral Tribunal could have awarded increase in the rate of customs duty if there was any increase thereto. Increase payment on account of devaluation of rupees would not fall Under Clause 12(8) and in these circumstances the Arbitral Tribunal exceeded their authority.

4. In para 2 of the petition filed by ONGC they have reproduced the clause as originally appeared in the tender document. A perusal of the clause in

the tender document and in terms of the agreement would show that the expression statutory variation has been omitted as also there are some other omissions. Arbitral Tribunal has taken into consideration the clause in the original tender document and the clause as contained in the agreement. The Arbitral Tribunal has noted that the idea behind incorporating the Clause 12(8) and amending it on 24-8-1992, it has noted was to provide for increase in the quantum of Rupee terms of customs duty as between 13-9-1990 and the date when the actual deployment of the equipment took place. The contention on behalf of ONGC that Clause 30 was also relevant for the purpose of incorporating Clause 12.9 was rejected on the ground that when there was a special provision it is the special provision will apply and not the general provision. Another argument sought to be advanced is that the delay was on account of Geological Technologies Ltd. and as such ONGC would not be responsible was also rejected. After considering the various factors by a detailed reasoning they have awarded a sum of Rs. 27,12,180 on the ground of larger quantum of customs duty in rupee terms that GTL was required to pay. It cannot be said that the view taken by the leaned arbitrators was a view impossible of being taken or did not fall within Clause 12.8. The learned arbitrators after considering the material on record and the clause have recorded their finding. It cannot be said that this finding is contrary to the terms of Clause 12.8. In these circumstances the first contention is rejected.

5. We then come to the second contention namely whether interest could have been granted for the period before filing of the written statement. It was contended that no notice was served claiming interest in terms of the Interest Act and there was no contract providing for interest. The awarding of interest up to 3-2-1994 it is contended would be without jurisdiction.

It may be possible to hold that this could have been one of the views taken. In the instant case the Arbitral Tribunal has considered the devaluation that had taken place in the rupee and the consequent amounts that the GTL had to pay. It must be remembered that the claim of GTL for enhanced amount on account of rental and manday charge was rejected. GTL had in fact paid the said amounts and it seems that it was in these circumstances that the Arbitral Tribunal has proceeded to award interest at the rate of 15 per cent per annum. To my mind considering the facts on record and further that the ONGC is a public authority the finding given that interest would have to be paid by ONGC as it had unjustifiably delayed payment of the principal amount on the due date cannot be said to give rise to a ground for challenging the award on that claim. No

interference is called for with that part of the order which had awarded interest. That challenge requires to be rejected.

6. Coming to the petition filed by GTL, the claim as already set out was in view of the devaluation of the rupee and the increased payment of BGD rupee that GTL had to pay in respect of rental and manday charges. GTL sought to claim it. It is contended on behalf of ONGC relying on the judgment of the Apex Court in the case of Santokh Singh Arora v. Union of India that the learned arbitrators were right in rejecting the said claim as these were not claims of which reference had been made to arbitration.

The learned arbitrators themselves in the award have given a finding that the claim regarding increased compensation in rupee terms in respect of rental and manday charges was never the subject matter of any difference or dispute or question between GTL and ONGC and that the only dispute which was referred to arbitration was in respect of customs duty. The learned arbitrators, therefore, held that they could only decide those disputes referred to them which were pending at the time when the parties went to arbitration. Apart from that the learned Arbitrators proceeded on the footing that even assuming that they had jurisdiction and considering Clause 11.5 GTL could not claim the amounts in the matter of increased payment in respect of rental and manday charges. This is again in the matter of construction of the agreement. It cannot be said that in so holding and rejecting the claims of GTL the learned arbitrators have either misconducted themselves or failed to exercise jurisdiction or acted in excess of jurisdiction or that the award suffers from any error apparent on the face of the record.

7. In the light of that both the petitions dismissed. In view of dismissal of the petition considering the rules framed by this Court the award dated 14-9-1995 is made decree of this Court. The amount to carry interest at the rate of 15 per cent per annum from the date of the decree till final payment. In the circumstances of the case there shall be no order as to costs.