The Division Bench of the Delhi High Court in the case of Concept Communications Ltd. vs Bharat Sanchar Nigam Ltd. consisting of Justices Vibhu Bakhru and Amit Mahajan noted that decision of the Arbitral Tribunal would not warrant any interference u/s 34 of the Arbitration and Conciliation Act, 1996 (“the A&C Act”) unless the same is ex facie erroneous.
Facts
This appeal was filed u/s 37(1)(c) of the A&C Act impugning an order (“the impugned order”) passed by the learned Single Judge, whereby CCL’s application u/s 34 of the A&C Act, seeking to set aside an arbitral award (“the impugned award”), was rejected.
The respondent (“BSNL”) had issued a notice inviting Expression of Interest to empanel agencies for its Out-of-Home (OOH) Media and Advertising activities. CCL, amongst other agencies, submitted its bid. The bids were evaluated and as CCL emerged as the successful bidder, BSNL issued a Letter of Intent (LOI) in its favor. Thereafter, the parties entered into an agreement (“the Agreement”), whereby the appellant was empanelled to provide OOH advertising services in several Territorial Circles in India, comprising of various Secondary Switching Areas (SSAs). Thereafter, BSNL issued a Release Order and awarded the work of PCO Sign Boards to CCL. BSNL issued a letter to various Head Offices of the concerned Territorial Circles indicating circle wise allocation of the PCO Sign Boards. Disputes arose between the parties regarding the Agreement and the Release Order.
Procedural History and Contentions Made
It was CCL’s case that the respective offices of the Territorial Circles were antagonistic towards it and had created various hurdles and impediments in executing the work contracted to it. Performance of the Agreement / Release Order was delayed, and CCL had also sought extension of time for completing the same. CCL claimed that it finally completed the task assigned and installed the PCO Sign Boards. CCL stated that it raised bills for installing the PCO Sign Boards from time to time. Whilst some payments were made a large-invoiced amount was withheld. According to CCL an amount of ₹13,04,14,219.95 remained unpaid. CCL invoked the Arbitration Agreement and sought reference of the said disputes to arbitration. Before the Arbitral Tribunal, CCL filed a Statement of Claim claiming an amount of ₹13,04,14,219/- along with interest at the rate of 24% per annum till the date of payment. CCL also claimed an amount of ₹10,00,00,000/- (Rupees Ten Crores) towards loss and damages suffered by it and in addition, costs of the legal proceedings.
BSNL claimed that a substantial number of PCO Sign Boards, claimed to have been installed by the appellant, were not available on verification. BSNL had paid the amount for PCO Sign Boards, which were found to be installed on verification, after deducting liquidated damages in terms of the Agreement.
The Arbitral Tribunal evaluated the material and evidence produced by the parties and rejected the contentions advanced on behalf of the appellant.
Observations of the Court
The Bench noted that the Arbitral Tribunal’s decision on a question of fact is final. The same would not warrant any interference in a proceedings u/s 34 of the A&C Act unless it is proved that the same is ex facie erroneous and vitiates the arbitral award on the ground of patent illegality or on the ground of conflicting with the Public Policy of India.
It concurred with the decision of the Arbitral Tribunal and found that the impugned award was based on the material produced before the Arbitral Tribunal, so there was no ground to interfere with it in a proceeding u/s 34 of the A&C Act.
It was submitted on behalf of CCL that the impugned award is vulnerable as the Arbitral Tribunal had discarded a vital piece of evidence, a Status Report of installation of “PCO Sign Boards”, for which the Bench noted that an Arbitral Tribunal would not be bound by the Indian Evidence Act, 1872. So, its decision to evaluate material placed before it cannot be faulted.
Judgment
The Bench upheld the Arbitral Tribunal’s decision, and the appeal was dismissed.
Case: Concept Communications Ltd. vs Bharat Sanchar Nigam Ltd.
Citation: FAO(OS) (COMM) 156/2022 & CM APPL. 28207/2022
Bench: Justice Vibhu Bakhru, Justice Amit Mahajan
Decided on: 3rd June 2022
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(With input from news agency language)
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