Section 34 of The Arbitration Act IV / Arbitral Award Dissent

Mr. Peter Leaver [Queen’s Counsel], Justice V.K. Gupta [Retd.] and Mr. Anthony Houghton [Senior Counsel] delivered their International Arbitral Award in New Delhi, on 12.05.2014. Majority Award [Mr. Peter Leaver and Mr. Anthony Houghton] was in favor of Anglo American Metallurgical Coal Pty Ltd. and Dissenting Award [Justice V.K. Gupta] dismissed the claim of Anglo American Metallurgical Coal Pty Ltd. in its entirety. Majority Award was upheld by Learned Single Judge of the High Court of Delhi, on 10.07.2015, and set aside by Division Bench of the High Court of Delhi, on 02.03.2020.

When the plain language of a document is otherwise unmeaning in reference to how particular words are used in a particular sense, given the entirety of the correspondence, evidence may be led to show the peculiar sense of such language. When proviso (6) and illustration (f) to Section 92, Section 94 and Section 95 of The Evidence Act, 1872 are read together, the picture that emerges is when there are a number of documents exchanged between the parties in the performance of a contract, all of them must be read as a connected whole, relating each particular document to ‘existing facts’, which include how particular words are used in a particular sense, given the entirety of correspondence between the parties [See, GMR Vemagiri Power Generation Ltd., (2018) 3 SCC 716].

Majority Award referred to the various e-mails and letters exchanged between the parties. To cherry-pick three e-mails out of the entire correspondence and to rest a Judgment on those three e-mails alone would render the Judgment of the Division Bench fundamentally flawed. Majority Award cannot be faulted.

_____

The case has been argued on the basis of the law as it stood before The Arbitration and Conciliation (Amendment) Act, 2015 added two explanations to Section 34(1) and Sub-Section (2A) to Section 34. We, therefore, proceed to consider this case on the pre-existing law, which is contained in the seminal decision of Associate Builders, (2015) 3 SCC 49.

See, National Highways Authority of India, (2015) 14 SCC 21 at Paragraph 24; Centrotrade Minerals & Metal Inc., (2017) 2 SCC 228 at Paragraph 45; Venture Global Engineering LLC, (2018) 1 SCC 656 at Paragraph 85; Sutlej Construction Ltd., (2018) 1 SCC 718 at Paragraph 1; Datar Switchgear Ltd., (2018) 3 SCC 133 at Paragraph 51; GAIL (India) Ltd., (2018) 12 SCC 471 at Paragraphs 18-19; M.P. Power Generation Co. Ltd., (2018) 16 SCC 661 at Paragraph 25 (page 679); Shriram EPC Ltd., (2018) 18 SCC 313 at Paragraph 34 (page 328); HSS Integrated Sdn, (2019) 9 SCC 798 at Paragraph 7; and Ssangyong Engineering & Construction Co. Ltd., (2019) 15 SCC 131 at Paragraphs 20, 34-36.

Majority Award is certainly a possible view based on the oral and documentary evidence led in the case, which cannot be characterized as being either perverse or being based on no evidence.

_____

Vedanta Ltd., (2019) 4 SCC 163; Dyna Technologies Pvt. Ltd., 2019 SCC Online SC 1656; Parsa Kente Collieries Ltd., (2019) 7 SCC 236; South East Asia Marine Engineering & Constructions Ltd., (2020) 5 SCC 164 and Patel Engineering Ltd., (2020) 7 SCC 167 have been decided in a particular way after applying the tests laid down in Associate Builders and its progeny. All turn on their own facts. None of them have an application.

Majority Award is certainly a possible view of the case, given the entirety of the correspondence between the parties.

Hon’ble Justice R.F. Nariman, Anglo American Metallurgical Coal Pty Ltd. v. MMTC Ltd., [Civil Appeal No. 4083 of 2020].

Peter Leaver