Avadh Behari Rohatgi. J. - (1.) JUDGMENT
(2.) THIS arbitration has been a long drawn out affair. By a contract dated 12-2-1964 between the Fertilizer Corporation of India (the Corporation) and Girdler Corporation, later known as C.I. Girlder Inc. (the contractor), the contractor agreed to erect and instal a Methanol Plant at the Corporation's Trombay Division at Bombay of the description and on the terms set out in the said contract. The plant was supplied on a turn-key basis. It was to have a capacity to produce 100 metric tons of Methanoi per continuous day of 24 hours with either refinery gas or petroleum naptha as the feed stock. The contractor was to be paid 45 million rupees as the price of the plant. Article XIV of the said contract contained an arbitration clause which is as follows: "All disputes and differences between the Contractor and the Corporation shall be referred to arbitration, each party appointing an Arbitrator, and the Two Arbitrators nominating an Umpire, as the first step before consideration of any specific issue referred to them. The decision arrived at unanimously by the two Arbitrators, or on their failure to reach unanimous decision the award of the Umpire shall be accepted as final and binding upon both the parties. The provisions of the Indian Arbitration Act, 1940 shall govern the said arbitration proceedings. The venue of the Arbitration shall be New Delhi. The parties hereby expressly submit to the jurisdiction of the courts at New Delhi for all disputes arising out of the Agreement, the Arbitration proceedings and the enforcement of any award that may be made therein." The plant was ready for commissioning on December 29, 1965. The performance of the plant was eratic and unsatisfactory. It did not produce the required quantity of hundred metric tons of Methanoi per day. This was the main complaint of the Corporation. They said that the Catalyst installed in the Reformer Furnace which was specifically guaranteed under the contract to function satisfactorily for a period of one year had repeatedly failed to perform its function, there being repeated failures and shut downs in the plant. There was considerable correspondence between the parties. On February 16,1967 the contractor notified the Corporation that performance test would be carried out by February 19, 1967. Performance test was given accordingly. As a result of various discussions and negotiations that took place between the parties certain understandings were arrived at which were recorded in a letter of March 21, 1967 (the March Agreement). In this agreement the outstanding disputes between the parties were defined. The case of the Corporation is that despite the assurances given by the contractor there was a failure of the Catalyst in operation and the performance of the plant was far from satisfactory. It is alleged that there being something basically wrong with the Reformer Furnace, which was a vital part, the plant was not capable of giving sustained production of 100 metric tons per day. As the contractor failed to remedy the defects in the plant the Corporation terminated the contract and took "juridical possession" of the plant by its letter dated July 8, 1967. In or about 1967 disputes and differences arose between the Corporation and the contractor and in accordance with the said Article XIV the Corporation duly appointed Mr. B. Sen as an arbitrator and the contractor duly appointed Mr. J. Russell Wilson as an arbitrator and the two arbitrators on February 7,1969 nominated Lord Deviin as Umpire. By a supplemental agreement between the parties made on 1-3-1973 it was provided that the disputes and differences aforesaid should be considered as having always been referred to Lord Deviin, Mr. Russell Wilson and Mr. B. Sen as the three arbitrators, that Lord Deviin should act as the Chairman of the Arbitral Tribunal and that the award or awards should be made in the manner provided in section 10(2) of the Indian Arbitration Act. This was an eminent Tribunal of Aribtration consisting of members of three countries. Mr. Russell Wilson is a patent attorney of the United States. Mr. B. Sen is a senior advocate of India. Lord Deviin was a law lord in England. They held various sessions between 1971 and 1974. The cost of the arbitration assessed by the Tribunal ran into twelve lacs, parties own expenses being separate. On October 3, 1969 the Corporation filed a request for arbitration which concluded with four claims (hereinafter called claims I, II, III and IV). On March 14, 1970 the contractor filed the reply which concluded with four claims (hereinafter called counter-claims I, II, III and IV counter-claims III and IV being in the alternative). In the course of the arbitration proceedings IDI Management, the respondent to this appeal, succeeded to all the rights and liabilities of the contractor under the contract. The Arbitral Tribunal held 33 sessions on and between May 24, 1971 and March 3, 1973, to take evidence. They required the parties to submit their arguments in writing and also heard oral arguments. On March 3, 1973 the parties agreed that the Tribunal should make an interim award or awards on certain disputes which were specified in the order dated March 3,1973 made with the consent of the parties. Accordingly the Tribunal made an interim award on August 21, 1973. The material portion of the award is as under : "AND WHEREAS we have considered all the evidence put before us and the arguments addressed to us and have deliberated thereon AND WHEREAS we have decided to "hear oral arguments on Claim HAND WHEREAS a majority of us are agreed upon an award in relation to Claim I and counterclaim I and in the premises Counterclaims III and IV do not arise. Now we Petrick Devlin and J. Russell Wilson Hereby Award and Declare as follows : (1) The Claimants are not entitled underclaim I to a sum to be assessed in respect of lost production and. (2) The respondents are entitled under counterclaim I to be paid such sum not exceeding $ 302, 740, 53 as may be shown to be the outstanding balances due to them under the said Contract in dollars as well as in Indian currency. IN WITNESS HEREOF we have subscribed our signatures as on the 21st day of August one thousand nine hundred and seventy three. sd/- Lord Devlin. sd/- J. Russell Wilson" It will be seen from the interim award that the claim of the Corporation which was the subject matter of the interim award was the loss of production. They claimed Rs. 471.45 lakhs as damages on account of lost production during the period 9-3-1967 to 31-12-67 and additional period of 18 months, that is, 1-1-68 to 30-6-69 during which the plant failed to give the rated capacity of 100 metric tons of Methanol per day The majority rejected this claim of the Corporation in its entirety. The counter-claim of the contractor was that, though they had been paid 95 per cent of the price of the plant, the remaining five per cent of the price was not being released to them inspite of the fact that they had done all that was required of them under the contract. The majority allowed this claim of the contractor. In substance this was the decision of the majority in their interim award. Mr.B.Sen did not concur with the majority and therefore did not sign the award.
(3.) AFTER the Interim Award the Tribunal held six sessions on and between February 5 and 17, 1974 to hear further arguments and to take evidence upon all other claims and matters remaining in the arbitration. The Corporation abandoned Claim IV and were given leave to add three further claims. The contractor abandoned counter-claim No. II. On the remaining disputes the majority made the final award on Febuary 16, 1974. The material portion of the final award is in these terms : "AND WHEREAS we have considered all the evidence put before us and the "arguments addressed to us and have deliberated thereon AND WHERE'S a majority of us are agreed upon an Award or Awards in relation to all the said Claims and matters NOW WE PATRICK: LORD DEVLIN and J. RRSSELL WILSON HEREBY AWARD TO THE CLAIMANTS : (a) In satisfaction of Claim IIA Rs. 1,06,121 with interest thereon from 8 July 1967. (b) In satisfaction of claim IIC Rs. 2,58,069 with interest thereon from 5 August 1967, and (c) In satisfaction of Claim III Rs. 2,35,306 with interest from 31 July 1969. All such interest to be at the rate of 6 per cent, per annum and to run untill the date of the award. AND WE DECLARE that, save as aforesaid, the Respondents are not liable upon any of the Claims. AND WE AWARD to the Respondents in satisfaction of counter claim I US $ 302,600,50 with interest thereon at 6 per cent annum from 8 July 1967 until the date of this award". From this final award it will be seen that the Corporation's claims were allowed in respect of the specific items : Claim IIA for the Quenchoot, claim IIC in respect of Catalyst, Claim III on accounting. In respect of the contractor's claim they were awarded US .$ 3026000.50 with interest. In the Interim Award it was held that the contractor was "entitled under counter claim I to be paid such sum not exceeding $ 302,740.53 as may be shown to be the outstanding balance due to them under the said contract." This counterclaim I was now in the final award quantified as US $ 302,600.50 which the contractor was held entitled to receive from the Corporation. This was in the main the balance 5 per cent of the price of the plant which the Corporation had refused to release on account of unsatisfactory performance of the plant. The final award, as was the interim award, was the decision of the majority consisting of Lord Devlin and J. Russell Wilson. Mr. B. Sen did not agree with the majority. Nor did he sign the interim and the final awards. He issued a dissenting note dated 16-2-1974 giving reasons as to why he did not not agree with the majority awards, interim and final. This note, unlike the majority awards, is a detailed document of 32 pages setting out his reasons why he was not concurring with the majority. In 1974 the contractor made a petition before learned judge on the original side of this court under section 14 of the Arbitration Act 1940 (the Act slating that the award dated 16-2-74 be made a rule of the court. The arbitrators filed both the interim award dated August 21, 1973 and the final award dated 16-2-1974. On notice being given the Corporation on 26-10-74 filed objections to the award, both interim and final, under ss. 30 and 33 of the Act. The Corporation raised a large number of objections to the majority awards. Prithvi Raj J. by his order dated April 14,1978 dismissed the objections of the Corporation. He made the awards-interim as well as final-a rule of the court and passed a decree in terms thereof. From his order the (corporation appeals to this court. (The majority awards are non-speaking awards. In his separate dissenting note dated 16-2-1974. Mr. B. Sen has given his reasons for differing from the majority. The Corporation relies heavily on Mr. B. Sen's note in order to attack the majority awards. On behalf of the Corporation it is contended that the note of Mr. B. Sen dated 16-2-1974 is a minority award and it can be looked at for the purpose of finding the reasons of the majority awards. ;