Container Corporation Of India ... vs Texmaco Limited
2009 Latest Caselaw 2255 Del

*          IN THE HIGH COURT OF DELHI AT NEW DELHI


                                                      Date of Reserve: May 12, 2009
                                                         Date of Order: May 25, 2009

+OMP 255/2009
%                                                              25.05.2009
    Container Corporation of India Ltd.                 ...Petitioner
    Through : Mr. B. Datta, Sr. with Mr. M.M. Kalra, Advocates

      Versus

      Texmaco Limited                                   ...Respondent
      Through: Mr. T.K. Ganju, Sr. Adv. with Ms. Roopa Dayal, Advocates


      JUSTICE SHIV NARAYAN DHINGRA

1.    Whether reporters of local papers may be allowed to see the judgment? Yes.

2.    To be referred to the reporter or not?                                           Yes.

3.    Whether judgment should be reported in Digest?                                   Yes.


      JUDGMENT

1. This petition is under Section 34 of Arbitration & Conciliation Act, 1996

(for short, "the Act") with a prayer of setting aside the order passed by the

learned Arbitral Tribunal on 1st May 2009 whereby the Arbitral Tribunal

rejected the application made by petitioner under Section 23 of the Act.

2. It is contended by counsel for the petitioner that the petitioner had filed

a written statement to the claim filed by the respondent before the Arbitral

Tribunal. In the written statement, the petitioner had taken the stand that the

liquidated damages were rightly imposed by petitioner corporation and

besides that the petitioner had also suffered losses on account of serious

delays in making delivery as per the contract. The petitioner in the written

statement inadvertently did not make the counter claim of the losses suffered

to the tune of Rs.9,60,32,652/- although the petitioner annexed Annexure-R-I

OMP 255/2009 Container Corp. of India Ltd. v. Texmaco Ltd. Page 1 Of 4 with the written statement giving details of the losses suffered. During

hearing of the matter before the Arbitral Tribunal, petitioner moved an

application seeking amendment of its written statement so as to include the

counter claim of Rs.9,60,32,652/-. This application was dismissed by learned

Arbitral Tribunal without issuing notice to the respondent and without

deciding the application on merits. It is contended that by dismissing the

application, the Arbitral Tribunal in fact has rejected the counter claim of the

petitioner and, therefore, the order passed by the Arbitral Tribunal is to be

considered as an interim award which can be challenged under Section 34 of

the Act and therefore this petition under Section 34 was maintainable.

3. A perusal of the order dated 1st May 2009 passed by the learned

Arbitral Tribunal shows that the Tribunal dismissed the application for

amendment of written statemnet on the ground that it was made at the stage

when the final arguments were being addressed before the Tribunal. The

claimant had already concluded its arguments and the respondent had partly

argued the matter and the matter was posted for hearing of remaining

arguments on 28th April 2009 when it could not be taken up and was posted

on 1st May 2009 when an application under Section 23 of the Act was filed by

the petitioner for amendment of written statement so as to include a counter

claim. The Tribunal dismissed the application having regard to the gross delay

in making application and did not consider it appropriate to allow the prayer

made in the application.

4. The Arbitral Tribunal has wide discretion to allow or dismiss

applications for amendment of claim or written statement filed before it

during the proceedings. There is no provision under the Act for approaching

OMP 255/2009 Container Corp. of India Ltd. v. Texmaco Ltd. Page 2 Of 4 the Court against an order of allowing or dismissing the amendment

application. The issue pressed for by petitioner is whether dismissing of an

application of amendment of the written statement so as to include the

counter claim amounts to giving an interim award which can be challenged

under Section 34.

5. An interim award is in the nature of a decision of the Arbitral Tribunal

on some of the claims of the parties. Occasionally, the Arbitral Tribunal is

called upon to give a part award particularly when a part of the claim of the

claimant stands admitted by the opposite party either in the pleadings or

otherwise. The act does not define an interim award. Section 2(c) of the Act,

however provides that an arbitral award included an interim award. Generally

an interim award is like a preliminary decree within the meaning of Section 2

(2) of the Civil Procedure Code or it is like a decree based on the admissions

of parties as envisaged under Order 12 Rule 6 CPC. However, in any case, an

interim award must make a provisional arrangement by the Arbitral Tribunal

during the proceedings pending before it, but before passing the final award.

6. I consider that dismissing of an application for amendment of the

written statement whereby the petitioner was not allowed to include the

counter claim at a belated stage cannot be termed as an interim award so as

to allow challenging such order under Section 34. The petitioner would be at

liberty to assail the final award and can take all the ground of challenge as

available under law as and when final award is passed by the learned Arbitral

Tribunal. The petitioner cannot be allowed to challenge dismissal of its

application for amendment as an interim award. One of the purposes of

enactment of Arbitration & Conciliation Act, 1996 was to minimize the

OMP 255/2009 Container Corp. of India Ltd. v. Texmaco Ltd. Page 3 Of 4 intervention of the courts during arbitral proceedings and that is why Section

5 of the Act prohibits the Courts from interfering in the arbitration process.

The judicial intervention during arbitral proceedings is not permissible unless

it is specifically provided by Part-I of the Act. The effect of non-obstantive

clause in Section 5 is that the provisions of Part-I of the Act will prevail over

any other law for the time being in force in India. This provision recognizes

minimum role of judicial intervention in arbitral proceedings. It clearly brings

out the object of the Act i.e. to minimize the judicial intervention and to

encourage speedy and economic resolution of disputes by the arbitral

tribunal, in case where the disputes are entered by the arbitration agreement.

7. In view of foregoing discussion, I find that this petition is not

maintainable and is hereby dismissed. No orders as to costs.

May 25, 2009                                            SHIV NARAYAN DHINGRA J.
rd




OMP 255/2009   Container Corp. of India Ltd. v. Texmaco Ltd.          Page 4 Of 4