- (1.) This is an application under S. 34 of the Arbitration and Conciliation Act, 1996. Section 34 of the Act speaks for certain conditions under which the recourse of the Court against an arbitral award may be obtained by way of making an application for setting aside the arbitral award. At the inception it is to be said that unlike the Arbitration Act, 1940, scope and ambit of setting aside the Arbitrator's award under the new Act is very limited. It operates as good as decree. Therefore, the Court would be very slow in interfering with it unless an exceptional circumstances exists which can lead to a position of nullifying the claim. This is settled principle of law that unless and until the award seems to be bad from the fact of it, it should not be interferred with as an appeal from such award to adjudge the mental process of the Arbitrator. Such well settled principle of law practically codified by giving a rigid parameters of consideration under new Act so that the Court may not be unnecessarily burdened with such litigations when the parties themselves choose their own forum.
(2.) The fact remains that by consent of the parties, this Court was pleased to appoint Chairman-cum-Managing Director of the respondent-Company as Arbitrator. From the order of the Court dated 11/05/1998, it appears that the Arbitrator was directed to proceed expeditiously and in summary manner so that there should not be any delay in disposing the matter. The Arbitrator was directed to adjudicate the claims and counter claims to be referred to him by the parties. In turn, when the matter was referred to the Arbitrator, the following issues as settled between the parties, were framed:- 1(a) Was the Claimant asked by the Respondent to bring the dredger at G.R.S.E. (Main) for dredging work three months prior to 12/03/1997. It so, whether any work was allotted to the claimant? 1(b) Is the claimant entitled to Rs. 1,000.00 (Rupees One thousand only) per day during the idle period? 2(a) Whether any or all of the terms and conditions specified in the agreement dated 10/07/1999 are opposed to any statutory law or public policy or hit by principles of unequal bargaining? 2(b) Whether the contract dated 10/07/1997 is legal, valid and binding upon the parties? 3.Whether the minutes of the joint meeting dated 5/12/1997 have been waived or violated by the Respondent? 4(a) Whether the unilateral termination of the contract dated 10/07/1997 by the Respondent was proceeded by a legal and valid notice? 4(b) Whether termination of the contract dated 10/07/1997 by the respondent by issuing letters dated 8th Jan. 1998 and 18/04/1998 are legal and valid? 5. Whether the claimant is guilty of any breach of the terms of the contract dated 10/07/1997? 6. Whether the Respondent is guilty of any breach and/or violation of the terms of the contract dated 10/07/1997? 7. Whether the Respondent is guilty of waiver, acquiescence or any other principles of law and equity? 8. Whether the Claimants are entitled to their claims set out in para (1) to (h) at pages 14 and 15 of their statements of claim or any part thereof? 9. Whether the Respondents are entitled to their claims set out in para 40(a) to 40(d) at pages 16 to 18 of their counter statement of facts and counter claims of any part thereof? 10. To what other reliefs, including interests, the parties are entitled to? 11. Whether the claimant is entitled to interim arbitral award of Rs. 5,85,322.40 and whether the claimant is entitled to withdraw the amount deposited with the Registrar, Original Side, High Court, at Calcutta?
(3.) Out of all the issues, leaving aside the issue No. 2(a) or at best 2(b) as above, all other issues are either relating to question of fact or mixed question of law and fact, which cannot be spelt out by this Court in an application under S. 34 of the Act unlike an appeal. The award is a speaking award. The rest are discussed hereunder : Issue Nos. 2 (a) and 2(b) '2(a) Whether any or all the terms and conditions specified in the agreement dated 10-7-1997 are opposed to any statutory law or public policy or hit by the principles of unequal bargaining? 2(b) Whether the contract dated 10-7-1997 is legal, valid and binding upon the parties?" (a) It is the case of the claimant that the agreement dated 10/07/1997 was drafted and prepared by the Respondent and it contains clauses which are opposed to public policy, particularly clause like 'termination'. It is the further case of the claimant that the agreement contains illegal terms which were not understood by the claimant. In this connection the claimant heavily relied on the evidence of Mr. Dipak Sarkar in answer to questions Nos. 133, 167, 168, 169, 229, 222 and 223 and also the evidence of Mr. G. K. Chowdhury in question Nos. 557, and 558. The Ld. Counsel for the Claimant citing Ss. 21 to 24 of the Indian Contract Act, further argued that the said contract involves reciprocal promises. He also argued that the claimant being an SSI Unit was not in an unequal bargaining position with the respondent. However, while concluding the argument relating to this issue the Ld. Counsel for the petitioner/claimant did not specifically conclude or refer anything as to what should be the fate of such a contract. (b) The Respondent made an elaborate argument in respect of this issue. The officer representing the respondent stated that the issue raised was fortified with legal connotations and provisions of the law. He drew his attention to paragraph 37 of the Statement of claim wherein the Claimant contended that 'the agreement dated 10-7-97 executed between the parties contained clauses which were opposed to public policy, were oppressive, voidable and were prapared by the GRSE authorities exercising, their fiduciary relationship with regard to the present claimant". While arguing, the respondent explained various provisions of the Indian Contract Act, including Ss. 21 to 24 as relied on by the claimant. It was argued that the contract which contains clauses opposed to public policy is void ab initio as per S. 23 of the Indian Contract Act whereas Section 19 of the Indian Contract Act empowers the party which is affected by coersion, fraud, misrepresentation, etc. to avoid the contract being voidable. Hence, the claimant could either avoid the contract under S. 19, whatever might be the reasons or he could have simply declared the contract as void under S. 23 if in his opinion the contract contained clauses which were opposed to public policy. All the provisions from Ss. 19 to 30 of the Indian Contract Act which deal with void or voidable contracts were also explained to him. It was also argued by the said officer that from 12 March, 97 till 28 April, 98 when the contract was finally terminated by the Respondent, the claimant never raised any question with regard to legality or validity of the contract. The Respondent also argued that the claimant being an experienced business organisation had entered into the contract violuntarily and at their own free will and they could not now take a plea that they were not aware of the terms of the contract or the Contract Act as contended by them. In this regard reliance was made on a Division Bench judgment of the Madras High Court, reported in AIR 1998 Madras 9 wherein the Hon'ble Court had observed that 'having signed agreement with eyes open, the party cannot make a grievance that the clauses are unreasonable". It was also argued by the Respondent that there was no power imbalance, the claimant being an expedienced contractor and as such the contract cannot be said to be hit by principle of unequal bargaining. It was also stated that this was not the first contract that the claimant had entered into with the Respondent. (c) In view of the aforesaid submissions and counter submissions by the parties the Arbitrator was unable to hold the view advanced by the claimant that they were forced to enter into a contract which contained clauses oppressive or opposed to public policy. On the contrary, relying on the principles of law settled in AIR 1998 Madras 9 (supra) the Claimant, being an experienced business, should not have signed the contract, if in his opinion the said contract contained oppressive clauses. He was inclined to hold that the argument forwarded by the Claimant is purely an after thought because during the entire period from 10 July, 97 to 28/04/1998, the claimant never raised any objection regarding the legality or validity of the contract. He, therefore found the oral evidence adduced by Mr. Dipak Sarkar in this regard neither reliable nor justifiable as the same are not borne out either from any documentary evidence or corroborated by any other circumstantial evidence. There is thus no substance in the claimant's argument that the contract is not valid or is illegal and as such is not binding upon the parties. The Arbitrator, therefore decided issue No. 2(a) in negative and issue No. 2(b) in affirmative. ;