AFCONS INFRASTRUCTURE LTD Vs. STATE OF WEST BENGAL

JUDGEMENT

(1.) DISPUTES between the parties are ordinarily resolved through legal process. The parties are free to approach the Court of law for resolution of dispute. The parties would also be free to resolve their dispute in a domestic forum by adopting the process of alternate dispute resolution. Arbitration is one of the procedures that parties may avail, deciding to resolve the issue through arbitration without approaching the Court of law. Once the parties would decide that they would resolve their dispute through arbitration and would appoint arbitrator the Arbitral Tribunal would rule on its jurisdiction within the scope of the contract under which they are appointed. Any travel beyond the scope would automatically make their award vitiated by illegality. The Tribunal is the Master of its own procedure. The procedural law including the law of evidence is strictly not applicable in the process of arbitration. The Arbitral Tribunal would decide on the dispute in the way they would feel fit and proper. Their decision would be final and binding on the parties. Earlier the award would require to be followed by a rule of Court by passing a formal decree on the same. With the introduction of Arbitration and Conciliation Act, 1996 the award is final and binding on the parties and is available for execution as a decree through Executing Court after three months of publishing the award. The aggrieved party is entitled to challenge the award. Such challenge is restricted to the limited scope i.e. (a) fundamental policy of Indian law; or (b) the interest of India; or (c) justice or morality, or (d) in addition, if it is patently illegal ".

(2.) WHEN the parties would decide that persons having technical expertise should resolve their dispute, the award published by the experts would not be available for challenge merely because it lacked legal articulation. A passage from Russell on Arbitration (23rd Edition) being apt, is quoted below:

(3.) HE distinguished the cases cited by Mr. Mitra. HE referred to paragraph-28 of the decision in the case of H.P. State Electricity Board Vs. R.J. Shah & Company reported in 1999 Volume-IV Supreme Court Cases page-214 wherein the Apex Court relied on one of its observations in a precedent, the arbitrator cannot act arbitrarily, irrationally, capriciously or independently of the contract. Relying on such observation the learned Advocate General contended that the Tribunal must travel within the contract, any stepping outside, would make the award vitiated by illegality. The other four decisions cited by Mr. Mitra were not applicable as those cases decided civil action that would make the proposition outside the scope and purview. In the English case, experts did not have the legal background. They decided question involving technical issue whereas in the present context clauses referred to above would require appropriate interpretation that would never depend upon any technical expertise. Citing an example, the learned Advocate General contended, when there was any dispute as to quality of a particular material or equipment that would certainly involve technical expertise. However, a non-legal person would not decide any question of law. The present contract was for a fixed amount and the Tribunal did not have any scope to consider any additional claim.