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THE HONOURABLE Ms. JUSTICE P.T. ASHA O.P.Nos.200 of 2011 and 774 of 2012 Sterlite Technologies Limited Rep by Chief Manager K.Sundar case In the above circumstances, since the award suffers from a patent illegality the award is liable to be set aside.
[2/11, 15:12] Sekarreporter: O.P.Nos.200 of 2011 and 774 of 2012 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 11.12.2019 C O R A M THE HONOURABLE Ms. JUSTICE P.T. ASHA O.P.Nos.200 of 2011 and 774 of 2012 Sterlite Technologies Limited Rep by Chief Manager K.Sundar, Regional Office at Logix Techno Park, Tower B, 1st Floor, Sector 127, Noida – 201 301 … Petitioner in O.P.No.200 of 2011 M/s.BSNL rep by Chief General Manager, Southern Telecom Projects, 25, Greenways Lane, Raja Annamalaipuram, Chennai 600 028 …Petitioner in O.P.No.774 of 2012 -Vs.- Bharat Sanchar Nigam Limited, Rep by Managing Director, Harish Chandra Mathur Lane, Janpath, New Delhi 110 001. and also having its Office at Office of the Chief General Manager, Southern Telecom Projects, No.25, Greenways Salai, Chennai 600 028 Shri N.Janardhana Rao, Arbitrator, General Manager (NP) CFA, BSNL, Karnataka Telecom Circle, Bangalore 560 008 … Respondents in O.P.No.200 of 2011 1/53 [2/11, 15:12] Sekarreporter: O.P.Nos.200 of 2011 and 774 of 2012 M/s.Sterlite Optical Technologies Ltd (SOTL), E1, Waluj MIDC Industrial Area, Waluj District, Aurangabad – 431 136 Maharashtra, India. Shri N.Janardhana Rao, Arbitrator, General Manager (NP) CFA, BSNL, Karnataka Telecom Circle, Bangalore 560 008 … Respondents in O.P.No.774 of 2012 P rayer in O.P.No.200 of 2011: Original Petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 praying to set aside the Arbitral Award dated 22.11.2010 passed by the Arbitrator / 2nd respondent and consequently allow the claim petition of the petitioner and to direct the respondent to pay the cost of the petition. Prayer in O.P.No.774 of 2012: Original Petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 praying to set aside the award passed in Order No.NJR/SOTL/Arb/2009/33 dated 22.11.2010 passed by the sole Arbitrator Mr.N.Janardhana Rao, General Manager, NP-CFA. For petitioner … Mr.P.C.Harikumar in O.P.No.200 of 2011 for M/s.P.C.Harikumar & Asso. For petitioner in O.P.No.774 of 2012 … Mr.K.Anbarasan For Respondent-1 2/53 [2/11, 15:12] Sekarreporter: O.P.Nos.200 of 2011 and 774 of 2012 in O.P.No.200 of 2011 … Mr.K.Anbarasan For Respondents in O.P.No.774 of 2012 … Mr.P.C.Harikumar for M/s.P.C.Harikumar & Asso. COMMON ORDER These two petitions arise out of a common award passed by the Arbitral Tribunal on 22.11.2010 in a dispute that has arisen between the claimant, M/s.Sterlite Optical Technologies Ltd and the respondent, Bharat Sanchar Nigam Ltd. The parties are referred to as “Sterlite” and “BSNL” respectively. O.P.No. 200 of 2011 has been filed by the ”Sterlite” and O.P.No.774 of 2011 by the “BSNL”. The facts in brief preceeding the filing of the above petitions by the respective parties are as follows: (i) “Sterlite” which is a Public Limited Company had bid for a tender floated by “BSNL” for the supply of 24F of cable for its Southern Telecom Project on 01.10.2005. The case of “Sterlite” was that in or about July/August 2005, “BSNL” has circulated a letter bearing No.F.No.3-2/2004-MMT/PT-III dated 01.08.2005 informing 3/53 [2/11, 15:15] Sekarreporter: O.P.Nos.200 of 2011 and 774 of 2012 interest, that will now be executed between the parties.” This was also a case where the Honorable Supreme Court exercised its power under Article 142 of the Constitution of India. A conspectus of the Judgments prior to the amending Act 3 of 2016 would indicate that Courts can modify the Award, however, to a very limited extent relating to interest, reduction of damages granted etc, without moving out of the confines of Section 34. With the dicta laid in the recent Judgment in Ssangyong Engineering Vs. National Highways Authority [2019 (8) SCALE 41], where the Hon’ble Supreme Court has held that “Under no circumstance can any Court interfere with an arbitral award on the ground that Justice has not been done in the opinion of the Court” the power to modify becomes negligible. After the 1996 Act had come into effect though the power to modify was being exercised to a limited extent the power to correct as provided under Section 15 of the 1940 Act ceased to be exercised by the Courts in view of the language of Section 34 of the 1996 Act. It is for this reason that in cases similar to the case on hand despite setting aside the award on the ground of perversity and 51/53 [2/11, 15:16] Sekarreporter: O.P.Nos.200 of 2011 and 774 of 2012 patent illegality this Court is unable to correct the award by allowing the claim as it would amount to reversing the award. In the above circumstances, since the award suffers from a patent illegality the award is liable to be set aside. Consequently O.P.No.200 of 2011 is allowed and O.P.No.774 of 2012 stands dismissed. The parties therefore revert to the pre-arbitration status. In the light of the discussion in Paragraphs 9 to 39 supra regarding the restricted scope for interference by the Courts in a Section 34 application to modify or remit or correct the award which in given cases, results in the object of the Act not being achieved, this Court is of the considered opinion that the Law Commission should revisit the power to modify or correct the award in the light of the recommendation contained in the 76th Law Commission Report. 11.12.2019 Internet: Yes/No Index:Yes/No Speaking/Non-Speaking srn/kan/mps 52/53
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