Arbitral Awards – Trace Your Case

DR. WRITER'S FOOD PRODUCTS V. COSMOS CO-OPERATIVE

Dr. Writer’s Food Products v. Cosmos Co-operative Bank [Bombay HC, 20 September]

Whether the respondent’s motion for correction of the arbitral award, filed on December 29, 2016, was maintainable under Section 33 of the Arbitration Act after the 30-day limitation period from the date of service of the arbitral judgement?
Whether it is possible that the respondent’s late application under Section 33, which was not maintainable, could prolong the time limit for the petitioners to file an arbitration petition under Section 34 challenging the initial arbitral judgement of June 4, 2015?

In India, the Arbitration and Conciliation Act of 1996 oversees the resolution of arbitration issues. Section 34 of the Act addresses the setting aside of an arbitral award, while Section 33 addresses award revision and interpretation.

On June 4, 2015, an arbitral award was rendered, and a copy was immediately served on the petitioners.
The respondent submitted an application for correction of the arbitral award on December 29, 2016, well after the 30-day limitation period stipulated by Section 33(1)(a) of the Arbitration Act.
The petitioners challenged this application and also requested that the respondent’s application be excused for the delay.
The arbitrator repaired the typographical errors pointed out by the respondent and excused the delay in filing the application on February 16, 2017.
On March 2, 2017, the petitioners obtained a copy of this order, and on May 5, 2017, they filed an arbitration petition under Section 34, appealing the original award.

The respondent’s application under Section 33 for correction of the arbitral award, filed on December 29, 2016, was not maintainable since it was filed much after the 30-day limitation period from the date of service of the arbitral judgement.
The respondent’s motion for correction was not maintainable in law because there was no power to excuse the delay in filing an application under Section 33(1)(a) of the Arbitration Act.
Because the respondent’s Section 33 motion was denied, there was no new term of limitation for contesting the original award under Section 34(3) of the Arbitration Act.
As, the period for making an application under Section 34 had already expired when the respondent filed its application under Section 33, the petitioners were not compelled to wait for the respondent’s untimely application under Section 33 to be disposed of.
The petitioners’ referenced case, Ved Prakash Mithal & Sons, was distinguished because the facts were different, and the application under Section 33 in that case was filed within the necessary limitation time.
Invoking Section 33(1) within the limitation period did not have any effect because the limitation period for contesting the original arbitral award had already elapsed. As a result, the arbitration petition appealing the initial award was denied.

Steel Authority of India v. Primetals Technologies India Pvt. Ltd. [(Delhi HC, 12 March]

Whether the petitioner’s challenge under Section 34 of the Arbitration and Conciliation Act, 1996, to the arbitral award dated 15.10.2019, which allowed the respondent’s claims with costs and interest, justified in light of contractual disagreements concerning CENVAT credit and tax reimbursement?
Whether the learned Arbitrator correctly interpret the contract terms regarding the deduction of CENVAT credit and reimbursement of Central Sales Tax, and were the awarded claims, costs, and interest reasonable and in accordance with the petitioner-respondent contract?

The case, which involves a challenge to an arbitral ruling, is governed under the Arbitration and Conciliation Act of 1996. Sections 34 and 33 of the Act, which deal with appealing awards and correction/interpretation, are fundamental to the legal rules. Contract law considerations also apply when interpreting CENVAT credit and tax reimbursement contract conditions.

Steel Authority of India Limited (petitioner) issued a contract to a consortium that comprised the respondent for a steel mill project.
Among the terms stipulated in the contract were the acquisition of commodities and the reimbursement of taxes.
When the response sought recovery for Central Sales Tax (CST) paid by its subcontractors/vendors, disagreements occurred.
The petitioner challenged the reimbursement, claiming inconsistencies in the contract provisions concerning CENVAT credit and tax deductions.
The case was sent to arbitration, and the arbitrator recognised five claims made by the respondent and two counterclaims made by the petitioner.
Arbitration procedures were initiated due to a disagreement over the interpretation of the contract provisions, specifically involving deductions for the shortfall in CENVAT credit and reimbursement of CST.
By ruling dated 14.09.2018 in Arbitration Case(C) No.31/2018, the Hon’ble Supreme Court submitted the matter to a Sole Arbitrator.

The respondent was entitled to CST reimbursement under the contract, subject to a price schedule ceiling.
The arbitrator explained that deductions for the CENVAT credit deficiency could only be made from the gross contract price, not the nett contract price.
The refusal of the petitioner to repay CST paid by subcontractors/vendors was not warranted.
The arbitrator granted the respondent’s claims, including CST reimbursement, as well as actual arbitration costs and interest at 14% per year.
The petitioner’s Section 34 challenge to the arbitral award was dismissed, and the award was confirmed.
The refusal of the petitioner to repay CST paid by subcontractors/vendors was considered unreasonable.
The arbitrator granted the respondent’s claims, including CST reimbursement, as well as actual arbitration costs and interest at a rate of 14% each year.
The petitioner’s Section 34 challenge to the arbitral award was dismissed, and the award was confirmed.