pvr 1 App 53/08 IN THE HIGH COURT JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION APPEAL NO.53 OF 2008 IN ARBITRATION PETITION NO.187 OF 2007 IN AWARD NO.5 OF 2006 Oil and Natural Gas Corpn.Ltd. ...Appellant vs. Jindal Drilling & Industries Ltd. ...Respondent --- Mr.S.U.Kamdar, Sr.Advocate @ S.A.Bhalwal i/b. Vyas & Bhalwal, for Appellant. Mr.Pradip Sancheti, Sr.Advocate @ Mr.Vishal Shetty i/b. Ruben A.Fernandes, for Respondents. --- CORAM: D.K.DESHMUKH & SMT.R.P.SONDURBALDOTA,JJ. DATED: 7th July, 2010 P.C.: 1. This appeal is directed against the order dated 14.9.2007 passed by the learned Single Judge of this Court, rejecting the objection pvr 2 App 53/08 raised to the Award dated 19.4.2006 by the Arbitral Tribunal under the Arbitration Act,1940. The Oil and Natural Gas Corporation had entered into an agreement with the Jindal Drilling and Industries Ltd. (Hereinafter the Oil and Natural Gas Corporation will be referred to as Claimant and Jindal Drilling & Industries Ltd. will be referred to as Respondent .) 2. Under the contract, the respondent was to hire jack-up rigs for drilling exploratory/development wells in Indian offshore waters. The respondent had to make arrangements to hire the rig in advance so as to mobilise the same for the contract, if awarded. For the purposes of deployment of the Rig, various expenses were incurred by the respondent. It was agreed that upon mobilisation of the rig during the course of operation, if any foreign exchange is to be paid by the respondent for obtaining any goods, equipments or services, then the respondent would be reimbursed by the claimant. pvr 3 App 53/08 It was provided in the contract that if on the date on which the contract is to expire, if any work remains incomplete, that work can be completed and for that purpose extension would be granted on the same terms and conditions. It is an admitted position that the contract as per the original terms came to an end on 21.4.1991. It is also an admitted position that some work was incomplete and for completion of that work, the contract was extended till 4.10.1991 when the work was completed. During the period from 22.4.1991 till 4.10.1991 the respondent was required to avail of equipments and services for the work for which he had to pay foreign exchange. The respondent claimed reimbursement of foreign exchange during the period of extended contract at the exchange rate prevailing during that period. The claimant, however, was agreeable to pay at the exchange rate of Rs.13.17 per US $ and declined to pay at the exchange rate that was actually prevailing. This dispute alongwith the other disputes was referred to the Arbitral pvr 4 App 53/08 Tribunal. The Arbitral Tribunal has made the Award as stated above and accepted the claim made on behalf of the Respondent for reimbursement of foreign exchange expenditure at the prevailing exchange rate during the extended period of contract. The ONGC feeling aggrieved by that Award filed Arbitration Petition no.187 of 2007 under Section 33 of the Indian Arbitration Act, raising objection to the Award. The respondent also felt aggrieved by some part of the Award, therefore, the respondent filed Arbitration Petition no.210 of 2007 raising objection to some part of the Award. Both the petitions were decided by the learned Single Judge by common order dated 14.9.2007. The learned Single Judge dismissed both the petitions. The present appeal is directed against the order of the learned Single Judge rejecting objections to the Award of the Arbitral Tribunal made with reference to claim no.2 before the Arbitral Tribunal as also the Award made in relation to grant of interest. The learned Counsel appearing for the claimant pvr 5 App 53/08 submitted that the original contract came to an end on 21.4.1991. The details of foreign exchange that was required during the extended period of contract, were received by the claimant from the respondent only in the month of May,1991. An application was made by the claimant to RBI on 5.6.1991 for release of necessary foreign exchange and the foreign exchange was released on 4.12.1991 and thereafter, the payment was made. The learned Counsel submits that thus, there was delay in respondent submitting the details, there was also delay on the part of the RBI in sanctioning the release of foreign exchange for which the claimant cannot be held responsible. It was also claimed that awarding of rate of interest at 10% by the Arbitral Tribunal is excessive. The learned Counsel appearing for Respondent submits that the contention that for delay on the part of respondent in submitting the details and for delay on the part of RBI in releasing the foreign exchange, ONGC cannot be penalised, was neither raised before the Arbitral pvr 6 App 53/08 Tribunal nor before the learned Single Judge and therefore, such argument cannot be entertained in the appeal. He further claims that before the learned Single Judge in relation to the interest also contention was not raised that the interest awarded at 10% is excessive. In the light of the rival submissions, we have perused the record. 3. Under clause 7.5 there was an obligation cast on the respondent to supply schedule of details in relation to the foreign exchange requirement. But from the Award it does not appear that it was ever argued before the Arbitral Tribunal that there was delay on the part of the respondent in communicating their requirement of foreign exchange in relation to the expenditure incurred. The judgment of the learned Single Judge also shows that there was no such contention raised before the learned Single Judge. Same is the case in relation to the time taken by the Reserve Bank of India in releasing the foreign exchange. Such a contention, it pvr 7 App 53/08 appears, was neither raised in the written statement nor was it raised before the Arbitral Tribunal. It also does not appear to have been raised before the learned Single Judge. In our opinion, therefore, the learned Counsel appearing for respondent is justified in claiming that such a contention cannot be allowed to be raised for the first time in appeal. Same is the case with the contention raised on behalf of the appellant in relation to the rate of interest. Perusal of the order of the learned Single Judge shows that such a contention was not raised before the learned Single Judge. From the record, we find that the question whether the respondent was entitled to reimbursement of foreign exchange during the extended period of contract at the prevailing market rate or not , is essentially a question of fact and within the jurisdiction of learned Arbitral Tribunal, and the learned Arbitral Tribunal has decided that question on the basis of the material produced on record. Similarly, what should be the reasonable rate of pvr 8 App 53/08 interest that is to be awarded, is also a question within the jurisdiction of the Arbitral Tribunal and if Court finds that the view taken by the Arbitral Tribunal on the basis of the material produced before him, is a reasonable and possible view, then in our opinion, the Court is not justified in interfering with the Award. Same view has been taken by the learned Single Judge by recording finding that the view taken by the Arbitral Tribunal is a possible view on the material on record. Therefore, we do not find that any interference is called for with the order of the learned Single Judge which is impugned in the appeal at the hands of this Court. The appeal is, therefore, rejected. (D.K.DESHMUKH,J.) (SMT.R.P.SONDURBALDOTA,J.) ...