Delhi High Court
Aptec Advanced Protective … vs Union Of India on 13 January, 2025
Author: Navin Chawla
Bench: Navin Chawla
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 20.12.2024
Pronounced on: 13.01.2025
+ FAO(OS) (COMM) 227/2024 & CM APPL. 59210/2024
APTEC ADVANCED PROTECTIVE TECHNOLOGIES AG
.....Appellant
Through: Mr.Ashish Dholakia, Sr. Adv.
with Mr.Akash Panwar,
Mr.Subhoday Banerjee,
Ms.Ananya Narain &
Mr.Rohan Chawla, Advs.
versus
UNION OF INDIA .....Respondent
Through: Mr. Vikram Jetly, CGSC with
Ms. Shreya Jetly, Adv.
CORAM:
HON'BLE MR. JUSTICE NAVIN CHAWLA
HON'BLE MS. JUSTICE SHALINDER KAUR
JUDGMENT
NAVIN CHAWLA, J.
1. This appeal has been filed by the appellant under Section
13(1A) of the Commercial Courts, Act, 2015 read with 37 of the
Arbitration and Conciliation Act, 1996 (in short, „A&C Act‟),
challenging the Judgment dated 20.08.2024 (hereinafter referred to as
„Impugned Judgment‟) passed by the learned Single Judge of this
Court in O.M.P. (COMM) 216/2020 titled APTEC Advanced
Protective Technologies Ag v. Union Of India (hereinafter referred to
as „Section 34 Petition‟), whereby, the learned Single Judge has
dismissed the petition filed under Section 34 of A&C Act by the
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appellant herein, holding that the decision dated 18.11.2010 of the
learned Sole Arbitrator dismissing the four applications, bearing no.
Nos. 1, 2, 3 and 4 of 2009, filed by the appellant herein inter alia
seeking discovery of certain additional documents from the
respondent, was not an „Award‟ and therefore, petition filed under
Section 34 of the A&C Act to challenge the same was not
maintainable.
2. The appellant had challenged the decision dated 18.11.2010 of
the learned Sole Arbitrator vide Section 34 Petition before the learned
Single Judge of this Court, contending therein that the decision dated
18.11.2010 of the learned Sole Arbitrator is an interim Award and
hence subject to the challenge under Section 34 of the A&C Act.
3. The learned Single Judge, vide the Impugned Judgment,
dismissed Section 34 Petition filed by the appellant herein by
observing that the decision dated 18.11.2010 of the learned arbitrator
is not an interim Award, but is only an order on the applications that it
disposes of, and therefore, not subject to challenge under Section 34 of
the A&C Act.
Brief background of facts:
4. To understand the controversy involved, a brief background of
facts, shorn of details, is given as under:
4.1 The appellant herein, a company incorporated in
Switzerland, is engaged in the business of developing,
manufacturing and marketing Mountaineering Boots.
4.2 The appellant received an Order for supply of boots forSignature Not Verified
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the Defence Forces from the respondent herein through Contract
Purchase Order bearing No. 21(4)/98 – D(0-I) dated 01.07.1999
(hereinafter referred to as „CPO‟).
4.3 It is the case of the appellant that the appellant supplied
12,000 pairs of Model- A Boots and 5700 pairs of Model-B
Boots, in five consignments, to the Respondent‟s nominated
agent at Graz Airport, Austria, on 30.09.1999, 08.10.1999,
27.10.1999, 04.11.1999 and 12.11.1999. Each of the
consignments was inspected by the Inspectors of the Ministry of
Defence / AHQ within 30 days of arrival, in terms of Clause 6 of
Annexure III of the CPO, and on being satisfied that the boots
met the qualitative requirement specified in Annexure V of the
CPO, the respondent made payments to the tune of 90% of the
the invoices raised by appellant herein, however, did not make
any payment qua the remaining 10% of the invoice amount.
4.4 The respondent, vide Letter dated 09.11.2000, issued a
“Provisional Warranty Claim-cum-Performance Notice” on the
appellant, alleging that the Model-A Boots supplied by the
appellant herein had been found to be of substandard and
defective. The appellant herein denied the aforesaid claim of the
respondent and called upon the respondent to produce one pair of
Model-A Boots for scientific testing.
4.5 On 26.02.2001, the respondent encashed the “Warranty
Guarantee” furnished by the appellant. The appellant protested
against the said encashment and demanded that the losses caused
due to non-payment/ delayed payment of balance 10% of theSignature Not Verified
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invoice value and wrongful encashment of bank guarantee be
immediately compensated.
4.6 The appellant, thereafter, invoked arbitration by serving
upon the respondent the notice invoking arbitration.
4.7 The Supreme Court vide its order dated 29.08.2006
passed in Arb. Petition 5 of 2006 titled Aptec Advanced
Tech.Protective Tech.AG v. Union of India Th. Secretary, M/O
Defence, appointed the learned Sole Arbitrator to adjudicate the
disputes between the parties.
4.8 On completion of the pleading of the parties, the
following final issues were framed in the arbitration proceedings,
vide Order dated 29.09.2008:-
“Issues in Claim
1. Whether the Statement of Claim is properly
signed, verified and instituted?
2. Whether the Claims of the Claimant are
within limitation?
3. Whether the Respondent committed breach
of its obligations with regard to payments to
the Claimant as per the contract?
4. Whether there was delay on the part of the
Respondent in issuing Arrival Certificates to
the Claimant? If so, was the delay justified?
5. Whether the Claimant is entitled to any
amount from the Respondent on account of the
alleged delay in issuing arrival certificates or
alleged delay/non-payment of 10% of invoice
value and in particular
a) Whether the Claimant is entitled to
recover CHF 138,369.00 from the
Respondent towards non-payment of 10%
of Invoice Amount of 3rd Consignment
together with interest @ 18% per annum
from 29.11.1999 till date of realization?
b) Whether the Claimant is entitled to
recover CHF 12,587.08 from theSignature Not Verified
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Respondent towards delayed payment of
10% of Invoice Amount of the 1st
Consignment?
c) Whether the Claimant is entitled to
recover CHF 9,839.14 from the Respondent
towards delayed payment of 10% of Invoice
Amount of the 2nd Consignment?
d) Whether the Claimant is entitled to
recover CHF 2,759.54 from the Respondent
towards delayed payment of 10% of Invoice
Amount of the 4th Consignment?
e) Whether the Claimant is entitled to
recover CHF 3,218.95 from the Respondent
towards delayed payment of 10% of Invoice
Amount of the 5th Consignment?
6. Whether the Model A Boots supplied by the
Claimant under the Contract were defective
and sub-standard?
7. Whether the Claimant committed breach of
its warranty obligations under the Contract?
8. Whether the Warranty Claim dated
9.11.2000 of the Respondent was
unsustainable?
9. Has the Warranty Bond been illegally
invoked by the Respondent?
10. Whether the Claimant is entitled to any
amount on account of encashment of the
Warranty Bond by the Respondent? And in
particular, whether the Claimant is entitled to
recover CHF 402,210.00 from the Respondent
for unlawful encashment of Bank Guarantee
together with interest @ 18% per annum from
26.02.2001 till date of realization?
Issues in Counter-claim
1. Whether the Counter-claim is outside the
scope of reference of the present proceedings
and not maintainable?
2. Whether the Counter Claimant
(Respondent) is entitled to Warranty Claims?
3. Whether there was delay in making supplies
by the Claimant? If so, whether the Counter
Claimant (Respondent) is entitled to liquidated
damages under the contract as a consequence
of the said delay by the Claimant?
4. Whether the Respondent is entitled to the
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Counter Claims in prayer clauses (2) to (g) of
the Counter Claim?
5. Whether the Counter Claimant
(Respondent) is entitled to interest, damages
as claimed or in any other amount?
6. Whether the counter claim is barred by
limitation?
Common Issue
What is the relief, including facts, to be
granted in favour or against the Claimant or
Respondent in the claim and Counter-claim
put together?”
4.9 The appellant filed the affidavit of evidence of its first
witness, who was cross-examined by the respondent.
4.10 The appellant then filed four applications before the
learned Sole Arbitrator seeking discovery of documents, applying
the principles of Order XI Rules 12 & 14 of the Code of Civil
Procedure, 1908 (in short, „CPC‟). The learned Sole Arbitrator
dismissed the said applications vide its decision dated
18.11.2010.
4.11 The appellant challenged the decision dated 18.11.2010
of the learned Sole Arbitrator vide Section 34 Petition before the
learned Single Judge of this Court, contending therein that the
decision dated 18.11.2010 of the learned Sole Arbitrator is an
interim Award and hence subject to the challenge under Section
34 of the A&C Act.
4.12 The learned Single Judge has summarised the application
and findings of the learned Sole Arbitrator on the same as under:-
“3. A summary of the 04 applications bearing
I.A. Nos. 1, 2, 3 and 4 of 2009 filed by the
petitioner before the learned Arbitrator,Signature Not Verified
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including the documents sought by the
petitioner, the respondent’s response thereto
and the Tribunal’s findings thereon, may be
summarized as follows:
I.A. No. Document Respondent Tribunal's findings
sought by the 's response
claimant
(petitioner)
from the non-
claimant
(respondent)
1 of 2009 filed Document No. Document Document No. 1 does not
on 07.04.2009 1: not exist since the boots were
Acceptance Test available inspected visually.
Procedures with the Therefore, not possible to
adopted as per respondent call for production of
SOP-Standard document No. 1.
Operating
Procedures of
DGQA specific
to Multipurpose
Mountaineering
Boots and Joint
Receipt
Inspection
Reports - Nov
1999 to Jan
2000
Document No. Document Documents Nos. 2 and 3
2: supplied had already been filed by
Defect the respondent in
Investigation Volume-II of their
Report and documents.
Scientific The competent authority
Laboratory Test under the R.T.I. Act has
Methodology already furnished full text
with List of of the report sought for
Applicable as Document No. 4.
Standards for Hence, no further orders
Model „A‟ Boot necessary.
purported to
have been
defective with
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regard to „sole
erosion‟ - Nov
2000 to June
2002
Document No. 3: Document
Defect Investigation supplied
Report and Scientific
Laboratory Test
Methodology with List
of Applicable
Standards for
comparative testing of
Model „A‟ (purported
to be defective) and
Model „B‟ (accepted)
with regard to „sole
erosion‟ - Nov 2000 to
June 2002
Document No. 4: Relevant
Reports of the visit of pages of
DGQA Team to Units document
under XIV Corps c/o supplied
56 APO - In under RTI -
connection with remaining
purported defect of part of the
Boot Koflach being report
used in Siachen claimed to
Glacier area plus be
other items like confidential
Crampons, Gloves, and
Ice Pick, Ice Pitons, sensitive
Jummar, Rope
Climbing etc. -
2nd Feb to10th Feb
2001
2 of 2009 filed Production of Respondent A copy of the Report was
on 17.06.2009 Field Trial had produced by the
Report of supplied the respondent before the
December, 1998 document to Tribunal; and the
pertaining to the the Tribunal found that the
Model „A‟ Boot Tribunal for respondent had
considerati conducted Trial test on
on only 3 sets of Boots.
The Tribunal noted that it
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was stated in the report
that the tests were done
on the 03 pairs of shoes,
which was on a limited
scale which did not
represent the exhaustive
view of users to the
meagre number of
samples given for users
trials.
For this reason, the
Tribunal was of the
opinion that the Field
Test Reports, 1998 need
not be supplied to the
claimant.
3 of 2009 filed Document No. Not Prayer for production of
on 07.07.2009 1: available Documents Nos. 1 and 2
Field Trial with the is rejected as they are in
Directive for respondent the nature of fishing and
Boot Crampon as the roving enquiry.
with Straps - document Documents Nos. 3 and 4
1990 to 1991 was very are privileged since they
old pertain to supplies to the
Document No. 2: Not Army. Since the Army
Field Trial Report of available considers that details of
Boot Crampons with with the such equipment cannot
Straps - respondent be divulged, the Tribunal
December 1990 as the cannot deviate from the
document opinion of the concerned
was very authority.
old Further no case of
Document No. 3: Confidentia incompatibility of
Contract Purchase l document crampons is made-out.
Order placed on M/s. entered into
JAMDPAL of France by the
for supply of 10,000 respondent
Pairs of Boot with a
Crampons with Straps third-party;
- June to July 1999 and not
relevant for
the
proceedings
.
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Document No. 4: Confidentia
Acceptance Test l
Procedures adopted information
as per SoP-Standard , with direct
Operating Procedures bearing on
of DGQA specific to the defence
Boots Crampons with and security
Straps and Joint of the
Receipt Inspection country.
Reports of Boot
Crampons with Straps
Qty 10,000 Pairs
supplied by M/s.
JAMDPAL of France
- June 1999 to
January 2000
4 of 2009 filed Details of Not pleaded The application is
on 19.08.2009 investigation by the belated and liable to be
carried-out by claimant dismissed in view of
AHSP judgment of the Delhi
pertaining to High Court in Bhatia
Crampons Plastics v. Peacock
pursuant to Industries Ltd., AIR 1995
report of DGQA Del 144
team based on The production of these
its visit between documents cannot be
02.02.2001 and allowed since the
10.02.2001 to application is in the form
Units under XIV of a fishing and roving
Corps c/o 56 inquiry.
APO and
complete
correspondence
on subject
matter as well
as action
undertaken by
CQA after
10th Feb 2001
Photographs of Boot Not pleaded
Crampons with straps by the
procured from M/s. claimant
JAMDPAL of France
(manufacturer M/s.
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Camp, Italy) - June
1999 to Jan 2000.
4.13 The learned Single Judge, vide the Impugned Judgment,
dismissed Section 34 Petition filed by the appellant herein,
observing that the decision dated 18.11.2010 of the learned Sole
Arbitrator is not an interim Award, but is only an order on the
applications that it disposes of, and therefore, not subject to
challenge under Section 34 of the A&C Act. The learned Single
Judge held as under:-
“15. Upon considering the rival arguments
made, this court is of the view, that though
while deciding the four applications seeking
discovery and inspection of documents, the
learned Arbitrator has gone into a detailed
discussion on several aspects of the disputes
between the parties and appears to have
drawn inferences and conclusions therefrom,
at the same time the learned Arbitrator has
also expressly clarified that his decision on the
four applications is not a decision on the
merits of the disputes pending in arbitration.
Though it may be said that the manner in
which the impugned decision is phrased does
create an impression that the learned
Arbitrator has expressed a final view as
regards the quality of the crampons and their
compatibility with the boots, to allay any
apprehension that the petitioner may entertain
in that behalf, the learned Arbitrator has also
specifically recorded in order/minutes of
meeting dated 05.04.2011, that he has only
passed orders in relation to the discovery and
inspection of documents and has not passed
any „award‟ on the dispute between the
parties.
*****
17. It is also noticed that in the impugned
decision, the learned Arbitrator has, in soSignature Not Verified
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many words, acknowledged that the main issue
in the arbitration proceedings, namely Issue
No. 6 on whether the boots supplied by the
petitioner were defective or sub-standard has
been specifically framed and is yet to be
answered. There is nothing in the impugned
decision to indicate that by the said decision,
the learned Arbitrator has disposed-of Issue
No.6, which is central to the arbitral
proceedings. Accordingly, the impugned
decision is an order which “does not finally
settle a matter at which the parties are at
issue” and accordingly does not qualify even
as an interim award.
18. In the above view of the matter, and taking
on record the specific observations of the
learned Arbitrator as contained in impugned
decision dated 18.11.2010 and in
order/minutes dated 05.04.2011, this court is
of the opinion that the impugned decision
dated 18.11.2010 is not an interim award, but
is only an order on the applications that it
disposes-of. Accordingly, the present petition
under section 34 of the A&C Act challenging
the impugned decision, is not maintainable.”
Submissions of the learned senior counsel for the appellant:
5. The learned senior counsel for the appellant submits that the
learned Single Judge has erred in his conclusion that the decision
dated 18.11.2010 of the learned Sole Arbitrator is not an interim
Award and is, therefore, not capable of being challenged by way of a
petition under Section 34 of the A&C Act. He submits that the learned
Sole Arbitrator has conclusively and finally decided that the appellant
had not raised an issue of incompatibility of the Crampons and defects
thereof. He submits that the learned Sole Arbitrator has in fact, held
that there were no defects in the Crampons and that this issue does notSignature Not Verified
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arise in the arbitration proceedings. He submits that the decision dated
18.11.2010 of the learned Sole Arbitrator therefore, finally decided the
issues of substance between the parties and was an interim Award. In
support, he places reliance on the Judgments of this Court in
Cinevistaas Ltd. v. Prasar Bharti, 2019 SCC OnLine Del 7071, and
MBL Infrastructure Ltd. v. Rites Limited & Anr., 2023 SCC OnLine
Del 2736.
6. The learned senior counsel for the appellant submits that the
learned Single Judge has, however, based only on the self-certification
of the learned Sole Arbitrator in the Impugned decision dated
18.11.2010 and the subsequent Order dated 05.04.2011, held that the
Impugned decision decides only the applications and not the
controversy in the arbitration proceedings and is therefore, not an
Arbitral Award. He submits that this finding of the learned Sole
Arbitrator is totally erroneous and cannot be sustained.
7. At this stage, we must also note that the learned senior counsel
for the appellant also made submissions on the merits of the decision
dated 18.11.2010 of the learned Sole Arbitrator. However, as these
were not gone into or tested by the learned Single Judge, given the
finding that the petition under Section 34 of the A&C Act was not
maintainable, we also refrain ourselves from commenting on the same.
Any observation made by us in our Judgment is only for the purpose
of considering whether the decision dated 18.11.2010 can be termed
as an interim Award and can be subjected to a challenge by way of a
petition under Section 34 of the A&C Act.
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Submissions of the learned counsel for the respondent:
8. On the other hand, the learned counsel for the respondent
submits that the learned Sole Arbitrator, vide the decision dated
18.11.2010, has merely decided the four applications filed by the
appellant. The learned Sole Arbitrator has, on more than one occasion
in the decision dated 18.11.2010 itself, as also in the Order dated
05.04.2011, clarified that any observations made in the decision dated
18.11.2010 are only for the purposes of deciding the applications and
should not be considered as a final expression of opinion on the merits
of the arbitration dispute. He submits that, therefore, the learned
Single Judge has rightly held that the decision dated 18.11.2010 does
not amount to an interim Award and, therefore, cannot be challenged
by way of a petition under Section 34 of the A&C Act. In support, he
places reliance on the Judgment of this Court in Rhiti Sports
Management Pvt. Ltd. v. Power Play Sports & Events Ltd., 2018
SCC OnLine Del 8678, and in Goyal MG Gases Pvt. Ltd. v. Panama
Infrastructure Developers Pvt. Ltd. & Ors., 2023 SCC OnLine Del
1894.
9. The learned counsel for the respondent also tried to make
submissions on the merits of the controversy involved in the
applications filed by the appellant before the learned Sole Arbitrator
as also on the dispute in the arbitration proceedings, however, as noted
hereinabove, given the limited nature of issue to be determined by this
Court in the present appeal, that is, whether the decision dated
18.11.2010, of the learned Sole Arbitrator, is an interim Award or a
mere order deciding the applications filed by the appellant, we refrain
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ourselves from making any observation on the merits of the decision
dated 18.11.2010.
Analysis & findings:
10. We have considered the submissions made before us by the
learned counsels for the parties.
11. From the above, it would be apparent that the issue before us is
as to whether the Sole Arbitrator‟s decision dated 18.11.2010 is an
„Award‟ or is merely an order on the applications filed by the
appellant. It needs no emphasis that a petition under Section 34 of the
A&C Act is maintainable only against an „Arbitral Award‟.
12. The A&C Act itself does not give us much guidance on the
issue in hand. Section 2(1)(c) of the A&C Act states that the term
„arbitral award‟ shall include an interim Award, however, the A&C
Act has not defined an interim Award.
13. At the same time, Section 31(6) of the A&C Act states that any
time during Arbitral proceedings, Arbitral Tribunal may make an
interim Award on any matter on which it can make a final Award.
This, therefore, gives guidance of what constitutes an interim Award.
Section 31(6) of the A&C Act reads as under:
“31.Form and contents of arbitral award.
*****
(6) The arbitral tribunal may, at any time
during the arbitral proceedings, make an
interim arbitral award on any matter with
respect to which it may make a final arbitral
award.”
14. The Supreme Court, in the case of IFFCO Ltd. v. Bhadra
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Products, (2018) 2 SCC 534, while interpreting the term „interim
Award‟, held that the Arbitral Tribunal can make an interim arbitral
Award on any matter with respect to which it may make a final
Award; and the term “matter” in Section 31(6) of the A&C Act
includes any point of dispute between the parties which has to be
answered by the Arbitral Tribunal. We may quote from the said
Judgment as under:
“7. As can be seen from Section 2(c) and
Section 31(6), except for stating that an
arbitral award includes an interim award, the
Act is silent and does not define what an
interim award is. We are, therefore, left with
Section 31(6) which delineates the scope of
interim arbitral awards and states that the
Arbitral Tribunal may make an interim
arbitral award on any matter with respect to
which it may make a final arbitral award.
8. The language of Section 31(6) is advisedly
wide in nature. A reading of the said sub-
section makes it clear that the jurisdiction to
make an interim arbitral award is left to the
good sense of the Arbitral Tribunal, and that
it extends to “any matter” with respect to
which it may make a final arbitral award.
The expression “matter” is wide in nature,
and subsumes issues at which the parties are
in dispute. It is clear, therefore, that any
point of dispute between the parties which
has to be answered by the Arbitral Tribunal
can be the subject-matter of an interim
arbitral award. However, it is important to
add a note of caution. In an appropriate case,
the issue of more than one award may be
necessitated on the facts of that case.
However, by dealing with the matter in a
piecemeal fashion, what must be borne in mind
is that the resolution of the dispute as a whole
will be delayed and parties will be put to
additional expense. The Arbitral Tribunal
should, therefore, consider whether there isSignature Not Verified
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any real advantage in delivering interim
awards or in proceeding with the matter as a
whole and delivering one final award, bearing
in mind the avoidance of delay and additional
expense. Ultimately, a fair means for
resolution of all disputes should be uppermost
in the mind of the Arbitral Tribunal.”
(Emphasis Supplied)
15. The Supreme Court further considered Section 32(1) of the
A&C Act, which reads as under:-
“32. Termination of proceedings.–
(1) The arbitral proceedings shall be
terminated by the final arbitral award or by an
order of the arbitral tribunal under sub-
section (2).”
16. Considering the above, the Supreme Court in the said Judgment
emphasised that while the arbitration proceedings can be terminated
only by way of a final Award, there can be one or more interim
Awards before the final Award, which conclusively and finally
determine some of the issues between the parties, finally leading upto
the final Award. We may quote from the judgment, as under:-
“9.To complete the scheme of the Act, Section
32(1) is also material. This section goes on to
state that the arbitral proceedings would be
terminated only by the final arbitral award, as
opposed to an interim award, thus making it
clear that there can be one or more interim
awards, prior to a final award, which
conclusively determine some of the issues
between the parties, culminating in a final
arbitral award which ultimately decides all
remaining issues between the parties.
*****
13. In Satwant Singh Sodhi v. State of Punjab
[Satwant Singh Sodhi v. State of Punjab,
(1999) 3 SCC 487] , an interim award inSignature Not Verified
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respect of one particular item was made by the
arbitrator in that case. The question before the
Court was whether such award could be made
the rule of the Court separately or could be
said to have been superseded by a final award
made on all the claims later. This Court held:
(SCC p. 491, para 6)
“6. The question whether interim award
is final to the extent it goes or has effect
till the final award is delivered will
depend upon the form of the award. If
the interim award is intended to have
effect only so long as the final award is
not delivered it will have the force of the
interim award and it will cease to have
effect after the final award is made. If,
on the other hand, the interim award is
intended to finally determine the rights
of the parties it will have the force of a
complete award and will have effect
even after the final award is delivered.
The terms of the award dated 26-11-
1992 do not indicate that the same is of
interim nature.”
On the facts of the case, the Court then went
on to hold: (Satwant Singh case [Satwant
Singh Sodhi v State of Punjab, (1999) 3 SCC
487] , SCC p. 493, para 11)
“11. This Courtn in Rikhabdass v.
Ballabhdas [Rikhabdass v. Ballabhdas,
AIR 1962 SC 551 : 1962 Supp (1) SCR
475] held that once an award is made
and signed by the arbitrator, the
arbitrator becomes functus officio. In
JuggilalKamlapat v. General Fibre
Dealers Ltd.[JuggilalKamlapat v.
General Fibre Dealers Ltd., AIR 1962
SC 1123 : 1962 Supp (2) SCR 101] this
Court held that an arbitrator having
signed his award becomes functus officio
but that did not mean that in no
circumstances could there be further
arbitration proceedings where an award
was set aside or that the same arbitrator
could never have anything to do with the
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award with respect to the same dispute.
Thus, in the present case, it was not open
to the arbitrator to redetermine the
claim and make an award. Therefore,
the view taken by the trial court that the
earlier award made and written though
signed was not pronounced but
nevertheless had become complete and
final, therefore, should be made the rule
of the court appears to us to be correct
with regard to Item 1 inasmuch as the
claim in relation to Item 1 could not
have been adjudicated by the arbitrator
again and it has been rightly excluded
from the second award made by the
arbitrator on 28-1-1994. Thus the view
taken by the trial court on this aspect
also appears to us to be correct.
Therefore, the trial court has rightly
ordered the award dated 28-1-1994 to
be the rule of the court except for Item 1
and in respect of which the award dated
26-11-1992 was ordered to be the rule of
the court.”
It is, thus, clear that the first award that was
made that finally determined one issue
between the parties, with respect to Item 1 of
the claim, was held to be an interim award
inasmuch as it finally determined Claim 1
between the parties and, therefore, could not
be re-adjudicated all over again.”
17. A learned Single Judge of this Court, in Cinevistaas (supra),
applied the principle of Shah Babulal Khimji v. Jayaben D. Kania &
Anr., (1981) 4 SCC 8, to hold that while determining whether the
order passed by the Arbitral Tribunal can be considered to be an
„interim Award‟, regard should be had to whether the order determines
substantial rights of the parties. It was held, as under:
“35. Arbitral proceedings are not meant to be
dealt with in a straightjacket manner. ArbitralSignature Not Verified
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proceedings cannot also be conducted in a
blinkered manner. There could be various
situations wherein, due to inadvertent or other
errors, applications for
amendments/corrections may have to be
moved. So long as the disputes fall broadly
within the reference, correction and
amendments ought to be permitted and a
narrow approach cannot be adopted. The
principles of Shah Babulal Khimji (supra)
would have greater application in arbitral
proceedings as the said judgment lays down
the principle, that the substantive rights
affected ought to be seen, while determining
what kind of orders are challengeable. An
interim order of the present kind rejecting a
large number of additional amounts/claims
would constitute an interim award under
Section 2(1)(c) of the Act.
36. In the facts of this case, it is clear that the
quantification of claims was done correctly in
the notice invoking arbitration, in the
application under Section 11 as also in the
writ petition filed by the Petitioner. The
rejection of the additional claims has in fact
resulted in greater delay rather than
expeditious disposal. The bona fides of the
Petitioner are not in question. Rejection of
additional claims by the impugned order have
all the trappings of an award and hence the
Section 34 petition is clearly maintainable.
On the basis of the tests laid down in Shah
Babulal Khimji (supra), the rejection of the
application to add or expand the amounts
claimed under certain heads results in a
conclusive determination that the said claims
cannot be adjudicated. Thus, there is not just
formal adjudication but in fact a final
rejection of the said claims. This constitutes a
dismissal of the claims and hence would
constitute an award within the meaning of
Section 2(1)(c) of the Act.”
(Emphasis Supplied)
18. In MBL Infrastructure Ltd. (supra), a Division Bench of this
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court, reiterated the above principle, in the following words:
“45.In our view, the extract from the judgment
of the Supreme Court in IFFCO case (supra)
is clear and categoric. A decision of an
Arbitral Tribunal which brings a quietus to an
issue before it and is an order which the
Arbitral Tribunal is empowered to pass at the
final stage would constitute an interim award
within the meaning of Section 31(6) as also
Section 34 of the Act.”
19. In Goyal MG Gases Pvt. Ltd. (supra), though on facts the
Division Bench held that a decision of the learned Arbitrator
dismissing an application filed under Order I Rule 10 of the CPC does
not amount to an interim Award, reiterated the principles applicable to
determine if an order amounts to an interim Award or not, in the
following words:
“20.It is reflecting that an order would said to
be an award or interim award when it decides
a substantive dispute which exists between the
parties. It is essential before an order can be
understood as an award that it answers the
attributes of the decision on the merits of the
dispute between the parties or accords in
conclusively settling a dispute which pertains
to core issue. Therefore to qualify as an award
it must be with respect to an issue which
constitutes a vital aspect of the dispute. As
held in the case of Rhiti Sports the order
passed by the arbitral tribunal would have the
attributes of an interim award when same
decides the „matters of moment‟ or disposes of
a substantive claim raised by the parties.
Accordingly, an order passed by the Arbitral
Tribunal rejecting the application for
impleadment neither decides the substantive
question of law nor touches upon the merits of
the case. The impugned order, as such, has not
travelled the distance to answer the attributes
of determination of an issue.”
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20. In Rhiti Sports Management Pvt. Ltd. (supra), a learned Single
Judge of this Court reiterated that for an order to qualify as an Award,
whether final or interim, it must settle a dispute on which the parties
are at issue; any procedural order that does not settle a matter on
which the parties are at issue, will not qualify to be termed as an
Award.
21. In the present case, the summary of the applications has been
given hereinabove. In determining these applications, the learned Sole
Arbitrator framed the following issues for consideration:
“1) Whether there is any truth in the
allegation of the Respondent that the Claimant
has started filing I.As in order to get over the
evidence of its witness CW-1 by shifting its
stand from whether the Model ‘A’ Boot’s were
not defective, to a new case that the Crampons
used by the Respondent were “incompatible”?
(2) Whether I.A.3 filed on 17-7-1999 for
discovery, after the completion of the evidence
of CW1 on 23-2-1999 is very much belated
and is liable to be dismissed?
(3) Whether the I.A. is in the nature of a
fishing and roving enquiry, particularly in the
light of the submissions of the learned counsel
for the claimant in respect of Documents 1 and
2 in the I.A. (The Field Trial Directive for
Boot Crampon 1990-91, and Dec, 1990) and is
liable to be dismissed?
(4) Whether Ex.P.3 filed along with the
Rejoinder in the 1.A.3 r/w the DGQA Report
supplied under the RTI Act prove that
Crampons were supplied to the Respondent by
the M/s. JAMDPAL & CO, haring been
manufactured by M/s. Camp & Co?
(5) Whether I.A.3/2009 for discovery
documents 3 and 4 relating to M/S.JAMOPAL
& co is maintainable, in the absence of any
allegations in the Claim statement and theSignature Not Verified
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Rejoinder to the Defence statement that the
said company supplied the Crampons to the
respondent and that they were ‘incompatible’?
(6) Whether, assuming that the Crampons
(manufactured by Camp & Co.,) were
supplied by M/s. JAMDPAL & Co., there is
any material or basis set out in I.A. 3 of 2009
for contending that the Crampons used by the
Respondent were ‘incompatible’? Whether
consequentially the application for the
discovery of Documents 3 & 4 in the I.A. is
not maintainable?
7) Whether the principle contended for by the
learned counsel for claimant “that evidence
led on a question though not specifically
covered by an issue, such evidence cannot be
eschewed or ignored”, is applicable in respect
of Documents 3 and 4 in the L.A.?
(8) Whether the points raised by the Claimant
in its Written submissions dt. 14.4.2010 and
31.8.2010 are correct?
(9)Whether the documents 3 & 4 in the I.A.
cannot be directed to be produced by the
Respondent in view of the Reply of the
Respondent that they deal with facts relating
to the ‘affairs of State’ or because disclosure
could be detrimental to interest of the
Government of India and also being against
public interest?”
(Emphasis Supplied)
22. The learned Sole Arbitrator, in answering issue no. 6 framed by
him, held as under:-
“Points: 6:
Under this point, the question is whether,
assuming that the Crampons(manufactured
by Camp & Co.,) were supplied by M/s.
JAMDPAL & Co., there is any material or
basis set out in I.A. 3 of 2009 for contending
that the Crampons used by the Respondent
were ‘incompatible’? Whether consequentially
the application for the discovery of Documents
3 & 4 in the I.A. is not maintainable?.
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*****
I may make it clear that though I am
compelled to go into question as to whether
any material is filed to prove the non-
compatibility or otherwise of the Crampons
used by the respondents because of the
allegations in the I.A., my finding on Point
No.5 continues to hold good that it is not open
to the claimant to make these allegations in the
I.A. when no such allegation was made in the
clairn statement, the rejoinder of the claimant
and no issue was sought as to whether the
Crampons used by the respondent were
incompatible. As already stated, the only issue
6 related to the question whether the Model
‘A’ Boots were defective or substandard.
******
From the above material before the Arbitral
Tribunal, it is clear that there is evidence that
the Crampons supplied by M/s. JAMDPAL &
Co., to the respondent were satisfactory and
that there is no basis or material to the
contrary and hence the allegation in
I.A.3/2009 that the Crampons supplied by
JAMDPAL & Co., and used by the
respondent were ‘incompatible’, is not
correct.
(Emphasis Supplied)
23. From the reading of the above findings, it is evident that the
learned Sole Arbitrator has given a final finding on the issue whether
the Crampons supplied by JAMDPAL & Co. were defective or not,
thereby, giving a final adjudication on one of the defences which the
appellant tried to raise in the arbitration proceedings. The question
whether the appellant could at all be allowed to raise this defence,
given the pleadings and the issues framed, is different from the
conclusion reached by the learned Sole Arbitrator that from the
material placed on record in the arbitration proceedings it was proved
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that the “Crampons supplied by M/s. JAMDPAL & Co., to the
respondent were satisfactory and that there is no basis or material to
the contrary and hence the allegation in I.A.3/2009 that the Crampons
supplied by JAMDPAL & Co., and used by the respondent were
‘incompatible’, is not correct.”
24. In addition to the above, in deciding point no. 3 framed by the
learned Sole Arbitrator for I.A. 4 of 2009 filed by the appellant herein,
the learned Sole Arbitrator discussed at length the DGQA report, and
observed as under:
“I do not propose to comment on para
5.1 of the Report which deals with the defects
in the Boots Multipurpose Model ‘A’ in as
much as that is a matter which has to be gone
into the under Issue No.6 in the main
Arbitration Case.
But, the discussion in this I.A. 4 of 2009
in regard to para 5.3, and 5.7 of the DGQA
Report will be the same as in I.A. 3 of 2009. As
stated in I.A. 3 of 2009, what is of importance
is the detailed report on Crampons contained
in para 5.3 rather than the single sentence in
para 5.7 and in fact, both paragraphs have to
be read together. If that is done, it is clear
from para 5.3 that the soldiers, the training
school, the DGQA team, and the Head
Quarters XIV Corps all unanimously observed
that the Crampons manufactured by M/s.
Camp & Co. (which according to claimant
were supplied by M/s.JAMDPAL & Co to the
Respondent) were good and their procurement
should he continued in future. But so far as the
Crampons supplied by M/s.Stubai, Austria
were concerned, they sated that the said
Crampons should be discontinued and
whatever balance of Crampons that were
supplied by that company remained, they
should be used in the training school only. If
the crampons manufactured by M/s.Camp &Signature Not Verified
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Co. (which were, according to claimant, were
supplied by M/s.JAMDPAL & Co.) were
“incompatible”, it is obvious that the soldiers,
the training school, the DGOA team which
actually observed the use of Crampons and the
Head Quarters of XIV Corps would not have
recommended that the procurement thereof
should be continued in future also.
As stated in I.A. 3 of 2009, it is because
of the above facts contained in para 5.3 of the
GOA Report, the claimant has conveniently
not referred to the said para in I.A.4/2009 and
has straight away gone to para 5.7 which is in
a single line in which it was stated that
“Crampons do not fit in all sizes of Boots
Multipurpose* and proceeded to state that
para 5.7 contained an “admission” that the
Crampons used by the Respondent on the
Boots were “incompatible”. However, as
pointed out above, there is no such admission
either in para 5.3 or 5.7 and in fact, on the
other hand, para 5.3 contains a
recommendation for continuing the
procurement of the Crampons manufactured
by M/s. Camp & Co., (which according to the
claimant were supplied by M/s.JAMDPAL &
Co to Respondent) and obviously those
Crampons were not reported by the soldiers or
the training school to be incompatible. Indeed
if the said Crampons were “incompatible”, the
team would not have recommended their
future procurement. It is also important notice
that the recommendation in para 5.3 is both by
the soldiers and by the training school. In para
5.7 the training school cannot be contradicting
itself in para 5.7, what it had stated in the
elaborate observations made by it in para 5.3.
Thus the allegation in the discovery
application I.A.4/2009 that para 5.7 of the
DGOA Report contained an admission by the
respondent that the Crampons used by the
respondent were “incompatible” has no basis
and the claimant has wrongly arrived at that
inference by straight away going to single
sentence in para 5.7 and by deliberatelySignature Not Verified
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omitting to refer elaborate report on the
Crampons that were actually used by troops,
as contained in para 5.3 of the report. If the
assumption of the claimant that there is an
admission in para 5.7 of the DGQA Report is
therefore wrong for the reasons given above,
the request for discovery of the investigation
by the concerned AHSP and further
correspondence on the subject, cannot be
accepted.”
25. The learned Sole Arbitrator then proceeded to answer point no.
4 framed by him and, in answering to the same, again observed as
under:
“So far as the present documents sought for in
this I.A.4/2009 are concerned, here also, there
is no material produced to show that the
Crampons were ‘incompatible’. The claimant
wants to go for a fishing and roving enquiry.
Once para 5.3 specifically deal with the
Crampons manufactured by M/s. Camp &
Co., (supplied by M/s. JAMDPAL & Co.) are
fully satisfactory for the soldiers, the Siachen
Training School, the DGQA team and Hq
Corps XIV, and they wanted that those
Crampons to be procured in future also. The
matter should end there. So far as the para
5.7 is concerned, all that the Siachen Training
School stated was that “Crampons do not fit in
all the sizes of Boots multipurpose. It was
suggested that matter will be investigated by
concern AHSP and further correspondence all
the subject will follow”. This general remark
does not specifically refer to the Crampons
manufactured by M/s. Camp &Co. which had
been used and which were found to be
satisfactory and the training school had also
recommended, along with the soldiers, that
those specific Crampons should be further
procured in future.”
(Emphasis Supplied)
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26. From a reading of the above extracts of the decision dated
18.11.2010 of the learned Sole Arbitrator, it would be evident that
apart from dismissing the applications filed by the appellant on the
ground of them being belated or as being in the nature of a fishing and
roving inquiry, the learned Sole Arbitrator has gone ahead and
considered whether there was any truth in the claim of the appellant
that the Crampons used by the respondent were incompatible with the
boots supplied by the appellant or were in any manner defective. The
learned Sole Arbitrator, in answering the same, has discussed in detail
the DGQA reports and other material and concluded, based thereon,
that there was evidence supporting the fact that the Crampons supplied
by M/s. Camp & Co. / M/s JAMDPAL & Co. to the respondent were
satisfactory and, on the contrary, there was no material to show that
these were incompatible. In our view, this is a final finding of fact by
the learned Sole Arbitrator. Whether this finding was necessary to be
given by the learned Sole Arbitrator or not for the decision on the
applications filed by the appellant, is not relevant to determine
whether the decision dated 18.11.2010 of the learned Sole Arbitrator
can be termed as an „Award‟ or not. What is relevant is that the
learned Arbitrator‟s findings conclusively decide the issue of whether
the Crampons supplied by M/s. Camp & Co./ M/s JAMDPAL & Co.
were not satisfactory or were incompatible, against the appellant. This
finding is conclusive and binding on the parties to the arbitration.
27. We must herein itself also note that the learned Sole Arbitrator
had, at least at two places in the impugned decision, cautioned that all
his observations are only prima facie in nature, which, for the sake of
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convenience are reproduced herein below:
“(Note: The under mentioned discussion has
become necessary in this I.A. in view of the
elaborate arguments submitted by the learned
Counsel for the Claimant and also in view of
his written submissions of the Claimant dated
14-4-2010 und Rejoinder written submissions
dt.31-8-2010. My observations herein below
are therefore, to be understood as having
become necessary to answer the various points
raised by the learned counsel for the Claimant
in this I.A. However, observations made by me
in regard to the allegations made by the
Claimant in its Rejoinder in the main
arbitration case are prima-facie observations
to meet the contentions of the Claimant in the
above said written submissions and have to be
dealt with again in the main arbitration case).
xxxxx
Before concluding, I invite the attention of the
parties to the “Note” set out in I.A.3/2009
before starting the discussion on the Points of
that I.A. What I said in that Note applies
equally to the discussion in I.A.4/2009.
Therefore, any observations touching on the
contentions of the parties in the main
pleadings in the arbitration case, have become
necessary in these two I.As 3 and 4/2009 only
to meet the allegations and points raised by
the claimant in these I.As and but for the same,
I would not have made any observations
concerning the allegations in the main
arbitration case. It is made clear that the
allegations in the main arbitration case will be
decided on the basis of the evidence and the
arguments relevant there for in the light of the
issues already framed and that will be done
without reference to any observations in I.As 1
to 4 of 2009.”
28. The learned Arbitrator has further, in his Order dated
05.04.2011, clarified as under:-
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“The above statement of the claimant
requires clarification by the Tribunal. The
statement made by the claimant in the
Application dated 23-3-2011 while seeking
adjournment of the proceedings before the
Tribunal that the Tribunal had passed an
“award” on 18-11-2010, it must be pointed
out, is an incorrect statement. The Tribunal
did not pass any award on 18-11-2010 nor did
it use the word “award” in its said order as
wrongly claimed by the claimant in the said
adjournment Application. The Arbitral
Tribunal had only passed orders on 4 IAs filed
by the claimant seeking to apply Order 11
Rule 12 and 14 of the Code of Civil Procedure,
1908 for discovery and inspection.
It may be that the claimant approached
to the Hon’ble High Court contending that the
Arbitral Tribunal had passed an “award” but
the Tribunal only wants to clarify that it had
not passed any “award” nor used the word
“award” as claimed by claimant in the
Application for adjournment. This clarification
has become necessary lest it may be contended
that the Arbitral Tribunal did not object to its
orders dated 18-11-2010 being described by
the claimant as an “award”.
It is however, for the Hon’ble High
Court to decide whether the application under
Sec.34 is maintainable and whether the
claimant could describe the orders of the
Tribunal dated 18-11-2010 as amounting to an
“award”.”
29. The above cautionary „Note‟ appended by the learned Arbitrator
and his opinion in the subsequent Order dated 05.04.2011, however,
cannot detract from the fact that the learned Sole Arbitrator has given
his final findings on the issue as to whether the Crampons supplied by
M/s JAMDPAL & Co. can be said to be incompatible with the boots
supplied by the appellant herein and therefore, has curtailed the
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defence or a point of attack for the appellant. Though these findings
are given in answer to the applications filed by the appellant seeking
discovery of documents, they are substantial and final findings on
facts determining a dispute and substantive rights of the parties. The
decision dated 18.11.2010 of the learned Sole Arbitrator, therefore, on
merits disposes of a substantive claim of the appellant and would,
therefore, applying the above-extracted principle of law, amount to an
interim Arbitral Award on the said issue.
Conclusion:
30. We, therefore, find that the learned Single Judge has erred in
holding that the decision dated 18.11.2010 of the learned Sole
Arbitrator was not an „Award‟ and, therefore, not amenable to a
challenge under Section 34 of the A&C Act. We hold that the decision
dated 18.11.2010, insofar as it decided the issue as to whether the
Crampons supplied by M/s JAMDPAL & Co. were incompatible with
the boots supplied by the appellant, is an „Arbitral Award‟ and,
therefore, amenable to a challenge under Section 34 of the A&C Act.
We, however, hasten to clarify that we have not discussed nor our
decision should be read as in any manner opining on the merit or
demerit of the challenge of the appellant to the decision dated
18.11.2020 of the learned Sole Arbitrator. The same shall have to be
considered by the learned Single Judge applying the principles that are
applicable to an application filed under Section 34 of the A&C Act.
Directions:
31. Consequentially, the Impugned Judgment dated 20.08.2024
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passed by the learned Single Judge in OMP (COMM) 216/2020 is set
aside. OMP (COMM) 216/2020 titled APTEC Advanced Protective
Technologies Ag v. Union of India, is restored to be adjudicated on
merit by the learned Single Judge of this Court.
32. As OMP (COMM) 216/2020 has been pending adjudication
since 2011, we request the learned Single Judge to expedite the
adjudication of the same on merits. For the said purpose, we direct the
parties to appear before the learned Single Judge on 3rd February,
2025 for further directions.
33. We again reiterate that we have not gone into the merits of the
challenge laid by the appellant to the findings of the learned Sole
Arbitrator, and any observations in that regard made hereinabove
would, in no manner, bind or influence the learned Single Judge while
adjudicating the petition filed under Section 34 of the A&C Act by the
appellant.
34. With the above observations and directions, the appeal, along
with pending application(s) is disposed of.
NAVIN CHAWLA, J
SHALINDER KAUR, J
JANUARY 13, 2025/rv/VS
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