S.C. Gupte, J. - (1.) THIS group of arbitration petitions challenges the awards passed by the Sole Arbitrators appointed in the matters, under Section 34 of the Arbitration and Conciliation Act, 1996 ('Act'). Submissions made at the bar were mainly advanced in Arbitration Petition No.729 of 2011. These submissions were adopted in other matters and only the distinguishing features of these other matters were argued separately. The issues arising under these petitions for the consideration of this Court, as also submissions advanced by either sides being common, these petitions are being disposed of by this common order. For the purposes of this common order, the facts are taken from Arbitration Petition No.729/2012. Wherever there are distinguishing features or facts and additional submissions were advanced to that extent, these have been considered separately in relation to the particular arbitration petitions in which they were advanced.
(2.) THE facts of the Petitioners' case may be briefly stated as follows : (a) The Petitioners are manufacturers of cylinders which are used by the oil industry for LPG cylinders. The Respondents along with Indian Oil Corporation and Hindustan Petroleum Corporation constitute nearly 99% of the cylinder purchasers in the country. In 1980s and till 1992, a single tender was floated by the three Petroleum Corporations including the Respondents herein for purchase of cylinders from manufacturers of cylinders. The Petitioners established their factory in 1982 for manufacture of cylinders. (b) By their purchase order dated 1 May 1999, the Respondents placed an order for supply of 27509 cylinders of 14.2 kg. at a provisional price with effect from 1 April 1999 of Rs.678.77. The terms and conditions of this purchase order inter alia envisage a formula for price escalation / de -escalation according to which the final price would be fixed by the Respondents and communicated to the Petitioners. This formula was said to have been approved by the Ministry of Petroleum & Natural Gas of Govt. of India ('MOPNG'). The purchase order also contained a risk purchase clause by which the Respondents, upon failure of the Petitioners to supply cylinders as per the schedule of delivery, could procure similar cylinders from other manufacturers at the Petitioners' risk, cost and responsibility. The purchase order contained an arbitration clause. The Petitioners supplied cylinders to Respondents under this purchase order from time to time. (c) By their communication dated 28 June 1999, the Respondents informed the Petitioners and other cylinder manufacturers that the price of LPG cylinders, based on the MOPNG approved escalation formula, needed to be reviewed and study in that regard was being conducted. The circular inter alia informed the Petitioners and others that in view of various circumstances referred to therein, the price of LPG cylinders would be kept provisional from 1 July 1999 and the manufacturers would be advised of the firm price on completion of the review by the Industry Task Force. The provisional price fixed on 1 April 1999 was amended by a letter dated 30 July 1999 issued by the Respondents. (The two communications, namely, the circular of 28 June 1999 and the letter of 30 July 1999, have a material bearing on the controversy between the parties and will be discussed in detail later.) Following this letter, by another letter dated 2 August 1999, the Respondents informed the cylinder manufacturers including the Petitioners about the revised procedure for issuing invoices for 14.2 and 19 kg. LPG cylinders. The Petitioners claim to have completed the contract to the fullest satisfaction of the Respondents. (d) On 29 March 2000, the Respondents issued another purchase order of 28125 gas cylinders at a provisional price of Rs.699.29 per cylinder for the period between 1.4.2000 to 30.6.2000. The purchase order contained similar terms and conditions as the earlier purchaser order in reference inter alia to the formula for the price escalation / de -escalation , risk purchase clause and arbitration clause referred to above. The purchase order was expressly stipulated to be read in conjunction with the abovementioned communication dated 28 June 1999. (e) The controversy between the parties arose when the Respondents issued letter / circular dated 31 October 2000 that pending determination of the final price by the Industry Task Force after obtaining a report from their consultants M/s.Price Waterhouse Coopers ('PWC'), the Respondents had decided to revise the provisional basic price of 14.2 kg. cylinders to Rs.645/ -with effect from 1 July 1999 and that the differential amount, namely, the difference between the provisional price indicated so far and Rs.645/ - per cylinder would be recovered from the pending bills of the Petitioners and other cylinder manufacturers. The Respondents further informed the manufacturers that final adjustment would be made after finalization of the cylinder price. (f) The final report of PWC was received and the Task Force finalized the price of the cylinders. The price for 14.2 kg. cylinders was fixed at Rs.645/ - per cylinder and communicated to the Petitioners and others, whereas price of 19 kg. cylinders was fixed at Rs.765/ - per cylinder and communicated to the manufacturers by a communication dated 31 January 2001. The Respondents effected recoveries from the Petitioners and other manufacturers on the basis on the respective prices fixed for the LPG cylinders at Rs.645/ - per cylinder for 14.2 kg cylinders and Rs.765/ - per cylinder for 19 kg. cylinders. (g) This recovery was challenged by the manufacturers of cylinders including the Petitioners herein. The disputes between the parties were referred to arbitration of a sole Arbitrator. The Petitioners herein filed a statement of claim before the learned Arbitrator in the form of a letter claiming refund of the recoveries made on the basis of the statement annexed to the letter. The Respondents filed their reply to the statement of claim. It was specifically urged by the Respondents in their reply that by the communication dated 28 June 1999, the Respondents communicated to cylinder manufacturers including the Petitioners that during the first quarter of following year 1999 -2000, oil companies came to the conclusion that a revised formula was to be determined for the calculation of the cylinder price and that once such decision was taken, the oil companies would intimate the same to all cylinder manufacturers; that by this communication, the manufactures including the Petitioners herein were put to notice that the price of LPG cylinders would be provisional from 1 July 1999 onwards and that the firm price would be advised to cylinder manufacturers including the Petitioners on completion of review by the Industry Task Force; and that the manufacturers including the Petitioners accepted this position and supplied cylinders to the Respondents on that basis. In other words, the case of the Respondents before the Arbitrator was that the original contract contained in the purchase order of 1 May 1999 was varied by a subsequent contract, under which the price of the cylinders to be supplied with effect from 1 July 1999 onwards would be provisional and that the new price would be determined on the basis of a new revised formula to be fixed by the Respondents on completion of review by the Industry Task Force. So also, it was claimed that the subsequent purchase order of 29 March 2000 was issued subject to the understanding recorded in the communication of 28 June 1999. The Petitioners' rejoinder to this reply simply contains a broad denial without specifically dealing with the question of variation of the contract, as claimed by the Respondents. (h) The sole Arbitrator accepted the Respondents' case and rejected the Petitioners' claim for refund of the recoveries made on the basis of final price determined after review by the Industry Task Force. The Sole Arbitrator dealt with the controversy concerning the variation of the contract in the impugned award and held firstly that the Petitioners were put to notice vide letter dated 28 June 1999 that the price of cylinders would be provisional with effect from 1 July 1999 till a firm price was intimated after completion of review by the Oil Industry Task Force. The learned Arbitrator held secondly that after the receipt of this letter, the Petitioners did not protest the variation of the purchase order, but continued to supply cylinders in accordance with the intimation of 28 June 1999. The learned Arbitrator found that similar intimation was also given with the purchase order of 29 March 2000. The learned Arbitrator next found that after receipt of the draft report of the Task Force prepared with the assistance of PWC, the Respondents by their letter dated 31 October 2000 intimated the provisional price of Rs.645/ - per cylinder to be finally adjusted after finalization of the cylinder price upon a final report to the Petitioners and other manufacturers. The learned Arbitrator observed that after receipt of the communication of 31 October 2000, the Petitioners continued to supply to the Respondents cylinders at the rate of Rs.645/ - per cylinder for the cylinders supplied with effect from 1 November 2010. Based on these observations, the learned Arbitrator came to the conclusion that both the Petitioners and the Respondents were clear that the price with effect from 1 July 1999 was to be provisional and that the firm price was to be determined and fixed by the Respondents after completion of the review by the Oil Industry Task Force with the assistance of PWC and the same would be binding on the parties. The learned Arbitrator found that the firm price as determined and fixed by the Respondents for cylinders supplied during the period from 1 July 1999 to 31 March 2000 was fixed at Rs.645/ - per cylinder and for cylinders supplied from 1 April 2000 to 31 March 2001 at Rs.662.20 per cylinder. The learned Arbitrator accordingly rejected the Petitioners' claim for refund of the differential of the amounts recovered in respect of supplies during the period from 1 July 1994 to 31 March 2000 on the basis of the final price fixed at Rs.645/ - per cylinder and for the cylinders supplied with effect from 1 April 2000 to 31 March 2001 at Rs.662.20 per cylinder.
(3.) IN the light of the pleadings of the parties, as also the documents on record referred to above, the conclusion arrived at by the learned Arbitrator is clearly a possible view. The learned Arbitrator has interpreted the letter of 28 June 1999 followed by the conduct of the parties and treated the same to be a variation of the original contract contained in the two purchase orders referred to above. There is nothing on record to show that the learned Arbitrator did not take into account any material document or that his conclusion is perverse in any manner having regard to the pleadings and documents referred to above.;