Delhi High Court
Oil And Natural Gas Corporation ... vs Amtek Geophysical Pvt. Ltd. on 25 August, 2015
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Decided On: 25.08.2015
+ FAO(OS) No.454/2014
OIL & NATURAL GAS CORPORATION LTD. ..... Appellant
Through: Mr. Tushar Mehta, ASG with Mr. Ameet
Singh, Mr. Suvesh Kumar and Mr. Sandeep Singh,
Advocate.
Versus
AMTEK GEOPHYSICAL PVT. LTD. ..... Respondent
Through: Mr. Samrat Nigam, Advocate.
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MR. JUSTICE DEEPA SHARMA
MR. JUSTICE S. RAVINDRA BHAT (OPEN COURT)
%
1. Vide this appeal, a judgment and order of learned Single Judge
dated 11.10.2012 in OMP No.15/2007 and a subsequent order of
12.02.2014 disposing of Review Petition No.159/2013 have been
challenged.
2. The appellant (hereinafter referred to as "ONGC") awarded two
contracts to the respondent (hereinafter referred to as "AMTEK").
The work volume in each work was 600 LKM. Both works were for
acquiring seismic data in the upper Assam (Assam Contract) and in
the Cambay Basin in Gujarat (Cambay Contract). The total value of
FAO(OS) No.454/2014 Page 1
the Assam Contract was `7,28,98,000/- which included 14 days
experimental work and 14 days of standby charges. AMTEK claimed
that while work was in progress in Assam, there was an intrusion in its
site by terrorists on 22.11.1992 and later they addressed a
communication demanding the handing over of the explosives used by
it for its work. This was reported and signed by all parties. Some
correspondence ensued between AMTEK and ONGC; the former had
claimed that the developments constituted a force majeure condition
under which it was entitled to standby charges. It was only on
21.07.1993 that the ONGC assured AMTEK full protection necessary
for the work. After all these developments, disputes arose between the
parties and on 08.06.1995, a common deed of settlement was executed
by the parties. In terms of this deed, the ONGC agreed to release the
net amount of `31,79,971/- for the Assam Contract and `6,03,641/- in
respect of the Cambay Contract. The disputes which were not covered
by the deed included the claim for standby charges for 88 days. These
88 days comprised of 66 days' suspension of work due to extremist
activities and non-availability of armed guards and 22 Sundays when
operations were prohibited by the militants.
3. AMTEK invoked the arbitration clause which is a part of the
contract with respect to the Assam Contract on 19.01.1998. The
applicability of the Arbitration Act, 1940 became the subject matter of
another dispute. On 22.11.2001, the Division Bench of this Court held
that the Arbitration & Conciliation Act, 1996 alone was applicable.
ONGC's SLP to the Supreme Court failed and ultimately on
22.11.2002, a new Arbitral Tribunal was constituted under the
FAO(OS) No.454/2014 Page 2
Arbitration and Conciliation Act, 1996. After considering the
pleadings and hearing the parties, the Arbitral Tribunal made its award
on 04.09.2006 stating, inter alia, that claims prior to the deed of
settlement could not be reopened, and that the scope of the arbitral
proceedings included the claim for standby charges of 88 days. The
Tribunal finally held that AMTEK was entitled to 65 days of standby
charges for which the award amount was of `165.10 lakhs and 1 day
was reduced from 66 on account of Christmas. The claim for 22
Sundays' standby charges was rejected. On the second head, i.e., for
experimental work (claim No.3.2.1), the award for `7,62,000/- with
simple interest @ 6% per annum from 23.05.1996 was granted.
Likewise as against `6,52,000/- under claim No.3.2.2, a sum of
`3,19,087/- with simple interest @ 6% from 02.03.1997 was awarded.
So far as the claim with respect to wrongful invocation of bank
guarantee, i.e., `14.58 lakhs was concerned, AMTEK was awarded
`10.00 lakhs with simple interest @ 6% from 28.10.1996 to the date
of the award. A post-award interest of 18% per annum was directed
till the date of actual payment.
4. The learned Single Judge upon a consideration of the award - in
the objections preferred by the ONGC held that the Tribunal's
decision that terrorist threats were the cause for stoppage of 66 days'
work, was clearly covered by clauses 8.5 and 8.6 of the contract, and
did not require interference. Only modification directed was that of
reduction of one day on account of Republic Day from the number of
days for which standby charges had to be paid, i.e., finally 64 days.
The learned Single Judge held that there was no illegality in regard to
FAO(OS) No.454/2014 Page 3
the award as against claim No.3.2.1 for experimental work, i.e.,
`7,62,000/-. Likewise, the award in respect of the claim No.3.2.2 and
3.4.2, for `3,19,087/- and `10.00 lakh (bank guarantee) was found to
be in order.
5. By the review order, the learned Single Judge modified the
direction so far as the post-award interest was concerned by stating
that from the date of award, ONGC was to pay to AMTEK 9% simple
interest if the payments were to be made within eight weeks from
12.02.2014 and in the event of default, the post-award interest was to
be 12% per annum for the period of delay.
6. The ONGC has urged several grounds contending that the
Arbitral Tribunal's observations with respect to claim for standby
charges were untenable. It was submitted besides that the
interpretation of clauses 8.5 and 8.6 as opposed to the overriding
nature of clause 11.1 was plainly contrary to the terms of the contract.
Similarly, with respect to the other claims, i.e., experimental charges
and claim No.3.2.2 and 3.4.2, learned counsel argued that these were,
ex facie, unsustainable.
7. This Court has carefully considered the submissions. It cannot
be disputed that the jurisdiction to interpret the terms of the contract is
within the exclusive domain of an arbitrator. In the present case, the
Arbitral Tribunal took into consideration not only clauses 8.5 and 8.6,
but also the material in the form of 15 letters which, spanned the
period between 22.11.1992 to 26.02.1993. These letters were
addressed by AMTEK to ONGC indicating temporary shifting of
explosives; and letters were also written to the Inspector General of
FAO(OS) No.454/2014 Page 4
Police and COY Commander. Besides these, communications were
addressed to the Village Council Chairman, Bhandari. Having regard
to all these, the Court is satisfied that AMTEK was prevented from
carrying on the work on account of the disturbed nature of the locality
or area and the threats extended by terrorists. The claim granted by
the Tribunal was 65 days' standby charges (which was later reduced
by the Single Judge to 64 days) as against 88 days which had been
originally made by AMTEK. Considering that the questions related to
pure findings of fact and an interpretation of contract which can by no
means be called as patently illegal or contrary to public policy, this
Court discerns no ground to interfere with the impugned judgment and
order.
8. As far as the confirmation of the other claims, i.e., Nos. 3.2.2
and 4.3.2, etc. is concerned, no infirmity amounting to a patent
illegality resulting in the award being opposed to public policy was
made out during the hearing. Furthermore, we notice that the post-
award interest was, in fact, reduced in the review proceedings.
9. For all the above reasons, this Court is of the opinion that this
appeal has no merit. The FAO(OS) No.454/2015 with all pending
applications are consequently dismissed.
S. RAVINDRA BHAT
(JUDGE)
DEEPA SHARMA
(JUDGE)
AUGUST 25, 2015
FAO(OS) No.454/2014 Page 5
