Essar Oil And Gas Exploration And ... vs Uem India Pvt. Ltd
2021 Latest Caselaw 4496 Bom

                                                          (49) nmcd 1165.2019.doc


                      IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                         ORDINARY ORIGINAL CIVIL JURISDICTION
                              IN ITS COMMERCIAL DIVISION

                         NOTICE OF MOTION NO.1165 OF 2019
                                       IN
                  COMMERCIAL ARBITRATION PETITION NO. 485 OF 2019

            Essar Oil and Gas Exploration and
            Production Limited                        ... Applicant / Petitioner

                     Vs

            Toshiba Water Solutions Pvt. Ltd.         ... Respondent


            Ms. Pallavi Bali for the Applicant / Petitioner.

            Mr. Vishal Muglikar a/w. Aniketh Nair, Mr.Shrikant Pilai i/b.
            Mustafa Motiwala for the respondent.

                                    CORAM : B.P. COLABAWALLA, J.

THURSDAY, 11TH MARCH, 2021

P.C. :

1 This matter has been moved seeking a modifcation of

paragraphs 7(i) and 7(ii) of Order dated 27 th January 2021. In

the said order, it was inter alia directed that if the petitioner

furnishes a bank guarantee, and the same shall be kept alive until

further 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 at 10%

(49) nmcd 1165.2019.doc

p.a. from the date of furnishing the bank guarantee till it's

encashment.

2. The petitioner has expressed certain diffculties in

obtaining the bank guarantee in the form in which it was directed

in the order dated 27th January 2021. It is under these

circumstances, the modifcation is sought.

3. The learned Advocate appearing on behalf of the

respondent has fairly stated that they have no objection to the

modifcation sought by the petitioner. Under these circumstances,

in view of the consensus between the parties, Paragraphs 7(i)

and 7(ii) of Order dated 27 th January, 2021, shall be substituted

as under :-

"7(i) In the event the Petitioner deposits in this Hon'ble Court a sum of Rs.1.85 Crores or furnishes a bank guarantee for a sum of Rs.2,03,50,000/- (i.e. Rs.1.85 Crores and inclusive of interest of 10% p.a. for the period of 2021- 2022) of any nationalised bank on or before March 18, 2021, the enforcement of the impugned award shall stand stayed.

(49) nmcd 1165.2019.doc

7(ii) In the event the Petitioner opts to furnish a bank guarantee, the same shall be kept alive by having the same renewed / reissued every year by the Petitioner until further orders. The said reissued bank guarantee shall be inclusive of interest at the rate of 10% per annum for the entire fnancial years from the date of furnishing the bank guarantee till it's encashment."

4. It is clarifed that the rest of the order shall remain

unchanged. The aforesaid correction / substitution shall be

carried out in the original order as well as in the copy uploaded

on the server.

5. List the above Arbitration Petition for admission on

30th March 2021.

6. This order shall be digitally signed by the Private

Secretary/Personal Assistant of this Court. All concerned shall

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

order.

Digitally signed by Vina A.

Vina A.   Khadpe
Khadpe    Date:                                                 B.P. COLABAWALLA, J.
          2021.03.15
          18:27:54
          +0530





                                                          (49) nmcd 1165.2019.doc

The corrected order dated 27th January, 2021 reads

thus :-

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

Essar Oil & Gas Exploration ] & 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'

(49) nmcd 1165.2019.doc

with the year '2018' is granted. Amendment to be carried out

forthwith.

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

operation and effect 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

14th 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

(49) nmcd 1165.2019.doc

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 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

(49) nmcd 1165.2019.doc

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 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

(49) nmcd 1165.2019.doc

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 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 Hon'ble

Court a sum of Rs.1.85 Crores or furnishes a bank

guarantee for a sum of Rs.2,03,50,000/- (i.e. Rs.1.85

(49) nmcd 1165.2019.doc

Crores and inclusive of interest of 10% p.a. for the

period of 2021-2022) of any nationalised bank on or

before March 18, 2021, 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 by having the

same renewed / reissued every year by the Petitioner

until further orders. The said reissued bank guarantee

shall be inclusive of interest at the rate of 10% per

annum for the entire fnancial years 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.

(49) nmcd 1165.2019.doc

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 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.

(49) nmcd 1165.2019.doc

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.) Digitally signed by Vina A.

Vina A.   Khadpe
Khadpe    Date:
          2021.03.15
          18:28:08
          +0530