Section 37 Appeal - The Legal Chamber

No Waiver Without Clear Intent: Supreme Court Sets Aside Arbitral Award for Violating ‘No Oral Modification’ Clause

27Nov

By The Legal ChamberNo Comments

Supreme Court

No Waiver Without Clear Intent: Supreme Court Sets Aside Arbitral Award for Violating ‘No Oral Modification’ Clause

This Supreme Court judgment underscores the narrow scope of judicial intervention under Sections 34 and 37 of the Arbitration and Conciliation Act, 1996. It affirms that an arbitral award can be set aside if it violates the fundamental policy of Indian law, principles of natural justice, or the terms of the contract, or if it exhibits patent illegality or perversity that shocks the conscience of the court. The Tribunal must adjudicate within the contractual framework and cannot rewrite the agreement. Facts Of The Case: The dispute arose between SEPCO Electric Power Construction Corporation, an EPC contractor, and GMR Kamalanga Energy Ltd., the project owner, concerning the construction of thermal power plants in Odisha. Following delays and disagreements, SEPCO demobilized from the site ...

No Interest on Delayed Payment Clause: Supreme Court Explains Its Limits

This Supreme Court judgment clarifies that a contractual clause merely barring interest on delayed or disputed payments does not, by itself, expressly or by necessary implication prohibit an arbitral tribunal from awarding pendente lite interest. The power to award such interest under Section 31(7)(a) of the Arbitration and Conciliation Act, 1996, is only denuded if the agreement contains a clear and comprehensive bar. Facts Of The Case: The dispute arose from an arbitral award dated 21.11.2004, which directed the appellant, Oil and Natural Gas Corporation Ltd. (ONGC), to pay a total sum of USD 6,56,272.34 to the respondent, M/s G & T Beckfield Drilling Services Pvt. Ltd., for outstanding invoices and other claims. The arbitral tribunal rejected ONGC's preliminary objection to the ma...

Supreme Court Rules: Consent Decree Based on Arbitration Must Be Honored, Estoppel Applies

The Supreme Court held that a party cannot raise a plea of estoppel against law after its own conduct induced the other party to alter its position to its detriment. The doctrine of election and estoppel by conduct precludes a party from approbating and reprobating, thereby preventing it from challenging the validity of a compromise decree it had previously accepted. Facts Of The Case: The respondents, claiming the appellants had been removed as trustees, filed a suit for a perpetual injunction to restrain them from entering a school run by Guru Tegh Bahadur Charitable Trust. The Trial Court rejected the plaint under Order VII Rule 11 CPC, holding the suit was barred by Section 92 CPC. During the pendency of the respondents' appeal against this order, the parties mutually appointed a sol...