SOUTH EAST ASIA MARINE ENGINEERING AND CONSTRUCTIONS LTD. Vs. OIL INDIA LIMITED
LAWS(SC)-2020-5-12
SUPREME COURT OF INDIA (FROM: GAUHATI)
Decided on May 11,2020

South East Asia Marine Engineering And Constructions Ltd. Appellant
VERSUS
OIL INDIA LIMITED Respondents


Referred Judgements :-

CHANDLER VS. WEBSTER [REFERRED TO]
CANTIARE SAN ROCCO SA (SHIPBUILDING COMPANY) VS. CLYDE SHIPBUILDING AND ENGINEERING CO. LTD [REFERRED TO]
FIBROSA SPOLKA AKCYJNA VS. FAIRBAIRN LAWSON COMBE BARBOUR LTD [REFERRED TO]
SATYABRATA GHOSE VS. MUGNEERAM BANGUR AND CO [REFERRED TO]
MCDERMOTT INTERNATIONAL IN VS. BURN STANDARD CO LTD [REFERRED TO]
SUMITOMO HE AVY INDUSTRIES LIMITED VS. OIL AND NATURAL GAS COMMISSION OF INDIA [REFERRED TO]





JUDGEMENT

N.V.RAMANA, J. - (1.)The present appeal arises out of impugned judgment and order dated 13.12.2007 in Arbitration Appeal No. 11 of 2006 passed by the Gauhati High Court, wherein the High Court allowed the appeal preferred by the Respondent under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter the "Arbitration Act"), and set aside the arbitral award dated 19.12.2003.
(2.)Brief facts necessary for the disposal of this case are as follows: appellant was awarded the work order dated 20.07.1995 pursuant to a tender floated by the Respondent in 1994. The contract agreement was for the purpose of well drilling and other auxiliary operations in Assam, and the same was effectuated from 05.06.1996. Although, the contract was initially only for a period of two years, the same was extended for two successive periods of one year each by mutual agreement, and finally the contract expired on 04.10.2000.
(3.)During the subsistence of the contract, the prices of High-Speed Diesel ("HSD"), one of the essential materials for carrying out the drilling operations, increased. Appellant raised a claim that increase in the price of HSD, an essential component for carrying out the contract triggered the "change in law" clause under the contract (i.e., Clause 23) and the Respondent became liable to reimburse them for the same. When the Respondent kept on rejecting the claim, the Appellant eventually invoked the arbitration clause vide letter dated 01.03.1999. The dispute was referred to an Arbitral Tribunal comprising of three arbitrators.
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