Essar Oil And Gas Exploration And ... vs Uem India Pvt. Ltd
2021 Latest Caselaw 1721 Bom

                                                      1      1-NMCD 1165-2019 in CARBP 485-2019.odt

                                   IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                      ORDINARY ORIGINAL CIVIL JURISDICTION
                                       NOTICE OF MOTION NO.1165 OF 2019
                                                      IN
                                 COMMERCIAL ARBITRATION PETITION NO.485 OF 2019
         Digitally signed
Anjali   by Anjali T.
         Aswale
T.       Date:

                            Essar Oil & Gas Exploration           ]
         2021.01.29
Aswale   17:36:55
         +0530
                            & Production Limited.                 ]      ... Applicant/
                                                                           Original Petitioner
                            In the matter between :

                            Essar Oil & Gas Exploration           ]
                            & Production Limited.                 ]      ... Petitioner

                                   Versus

                            UEM India Pvt. Ltd.                   ]      ... Respondent



                            Mr. Pradeep Sancheti, Senior Counsel a/w Mr. Ganthan Raikar &
                            Pallavi Bali for Petitioner/Original Applicant.

                            Mr. Rahul Narichania, Senior Counsel a/w Mr. Vishal Muglikar, Mr.
                            Aniketh Nair & Mr. Shrikant Pillai i/b Mustafa Motiwala for
                            Respondent/Judgment Creditor.


                                                       CORAM :- B. P. COLABAWALLA, J.

DATE :- 27 JANUARY, 2021

P. C. :-

1. Leave to amend and correct the date of the award in

prayer clause 'a' of the Notice of Motion to substitute the year

'2019' with the year '2018' is granted. Amendment to be

carried out forthwith.

                            URS                                                                 1 of 7
                           2     1-NMCD 1165-2019 in CARBP 485-2019.odt

2. This Notice of Motion has been fled seeking stay of

the operation and efect of the Award dated 26 th November,

2018, passed by the sole Arbitrator. The amount due to the

Respondent under the impugned Award as on today is

approximately 2.23 Crores.

3. Mr. Sancheti, the learned Senior Counsel appearing

on behalf of the Petitioner, submitted that even though the

impugned Award is a money Award, an unconditional stay be

granted as the learned Arbitrator completely ignored a vital

term of the contract and awarded the claim contrary to the

express term of the contract. In this regard, Mr. Sancheti

brought my attention to Article 12 of the Agreement between

the Petitioner and the Respondent for Water Treating Facilities

Services in BLOCK RG(EAST)-CBM-2001/1 dated 14 th August,

2013. Relying upon Article 12, Mr. Sancheti submitted that

except to the extent otherwise agreed in writing, any and all

costs in connection with the performance of the work would be

to the contractor's account and shall be deemed to be included

in the fees specifed in the Appendix, unless the same are on

account of any change order. Mr. Sancheti brought my attention

to Contract Price Schedule (Exhibit-B to the Appendix, Page 379)

and submitted that the amount that was payable to the

URS 2 of 7 3 1-NMCD 1165-2019 in CARBP 485-2019.odt

Respondent for design, engineering, erection, testing,

commissioning and performance guarantee, test run etc. was a

lumpsum of Rs.75 Lakhs. This being the case, at the highest,

the Arbitrator, even if he found that the Respondent was entitled

to damages, he could not have awarded a sum larger than 75

lakhs. In other words, the Respondent could not get a larger

amount by way of damages, than the amount it would have got

if the agreement had been performed. Considering that the

Arbitral Tribunal has awarded the sum of approximately Rs.1.79

Crores towards compensation and damages for loss caused to

the Respondent, the award is wholly perverse and needs to be

set aside. He, therefore, submitted that more than a prima-

facie case is made out for an unconditional stay of the impugned

Award.

4. On the other hand, Mr. Narichania, the learned Senior

Counsel appearing on behalf of the Respondent, submitted that

as on 22/01/2021, the amount due and payable under the Award

is Rs.2.23 Crores. This being a money Award, no stay ought to

be granted without an order of deposit, unless extraordinary

circumstances are made out. Mr. Narichania submitted that,

frstly, it is very unfair to the Arbitral Tribunal to raise an

argument before this Court which was never raised and argued

URS 3 of 7 4 1-NMCD 1165-2019 in CARBP 485-2019.odt

before the Tribunal. Mr. Narichania submitted that the question

of interpretation of Article 12 was never in issue and was never

raised by the Petitioner before the Arbitral Tribunal. He

submitted that if this point was raised before the Arbitral

Tribunal, the Arbitral Tribunal, after reading the contract as a

whole, would have interpreted this Article and even if

interpreted erroneously, would not be amenable to challenge

under Section 34 unless the interpretation was wholly perverse.

He submitted that this being the case, it would be highly unfair

to let the Petitioner today canvass this point and call upon this

Court to interpret the said Article for the frst time. He,

therefore, submitted that no stay ought to be granted unless

and until the amount of Rs. 2.23 Crores is deposited in this

Court.

5. I have heard learned Senior Counsel for parties and

also perused the papers and proceedings. I must mention that

there appears to be some dispute as to whether this point was

raised or not before the Arbitral Tribunal. Though Mr.Narichania

was vehement in his arguments that this was never argued

before the Arbitral Tribunal, Mr. Sancheti contends otherwise.

However, this is an aspect that would be gone into in detail at

the time when petition under Section 34 is heard at the

URS 4 of 7 5 1-NMCD 1165-2019 in CARBP 485-2019.odt

admission stage. Assuming that the interpretation of Article 12

was never raised and argued before the Arbitral Tribunal, I will

then have to consider whether it can be raised for the frst time

before me.

6. Prima facie, today, considering this is a money Award

and the Respondent has succeeded before the Arbitral Tribunal, I

do not think that this would a ft case to grant any unconditional

stay of the impugned Award. In these circumstances, I think

that it will be in the ftness of things if the Petitioner is directed

to deposit a sum of Rs.1.85 Crores in this Court as a condition

precedent for stay of the impugned Award.

7. In view of the foregoing discussion, the following

order is passed :

ORDER

(i) In the event the Petitioner deposits in this Court a

sum of Rs.1.85 Crores or furnishes a bank guarantee

of any nationalized bank for the same amount within

a period of 6 weeks from today, the enforcement of

the impugned Award shall stand stayed.

(ii) In the event the Petitioner opts to furnish a bank

guarantee, the same shall be kept alive until further

URS 5 of 7 6 1-NMCD 1165-2019 in CARBP 485-2019.odt

orders by having the same renewed every year and

the bank guarantee shall also clearly state that as

and when encashed, the same shall be paid together

with interest of 10% p.a. from the date of furnishing

the bank guarantee till it's encashment.

(iii) In the event the bank guarantee is not renewed at

least 15 days prior to it's expiry, the Prothonotary and

Senior Master will be entitled to encash the bank

guarantee without any further orders of this Court.

(iv) In the event the money is not deposited as directed

above or the bank guarantee is not furnished, then,

necessarily, there will be no stay to the enforcement

of the impugned Award and the Respondent herein

shall be entitled to execute the same in accordance

with law.

8. At this stage, Mr. Narichania submitted that in the

event the Petitioner deposits in Court the sum of Rs.1.85 Crores

as mentioned above, the Respondent be allowed to withdraw

the same subject to the Respondent furnishing a bank

guarantee on the same terms and conditions as mentioned

earlier. Having heard the learned counsel for the parties on this

aspect, it is ordered that in the event the Petitioner deposits in

URS 6 of 7 7 1-NMCD 1165-2019 in CARBP 485-2019.odt

Court the sum of Rs. 1.85 Crores, the Respondent shall be

allowed to withdraw the same subject to the Respondent

furnishing a bank guarantee for the said amount which shall be

kept alive until further orders by having the same renewed

every year. The bank guarantee shall also clearly state that if

and when encashed, the same shall be paid together with

interest @ 10% p.a. from the date of furnishing the bank

guarantee till its encashment.

9. The above Notice of Motion is accordingly disposed

of. No order as to costs.

10. List Section 34 petition for admission on 10/03/2021.

11. This order shall be digitally signed by the Private

Secretory / Personal Assistant of this Court. All concerned shall

act on production by fax or e-mail of a digitally signed copy of

this order.

                                         (B. P. COLABAWALLA, J.)




URS                                                                    7 of 7