Case: Jajodia (Overseas) Private Limited Vs. Industrial Development Corporation Oforissa Limited Andvice

were framed by the arbitrator, obviously in consultation with the parties and arising upon the pleadings. There were several hearings. It is, in these circumstances, inconceivable that the issues would not have reflected the referred dispute between the parties. It is also significant that the pleadings before the Subordinate Judge, Bhubaneshwar, and the statement of claim and the counter filed before the arbitrator were not produced before us by IDCO so that we could determine whether the statement of claim filed by JOPL before the arbitrator raised claims different from those contained in the pleadings before the Subordinate Judge, Bhubaneshwar . It was submitted that the award of damages was based on no evidence or material. The submission was based on the finding that the originals of the foreign sale contracts entered into by JOPL in respect of the goods under the agreement had not been sent to IDCO. That these original agreements had not been sent does not ipso facto lead to the conclusion that the arbitrator had no material before him upon which he could find that JOPL had suffered damage and assess the same in monetary terms.This brings us to the question of the inconsistencies found by the High Court upon the face of the award. The issues and the answers to which the High Court referred are issue Nos. 6, 7(b) and 9(a). 11. In our view, it is necessary to repro duce the issue nos. 6, 7, 9, and 10 and their answers in extenso. "Issues 6. Did the claimant fulfil their obligations under the terms and conditions of the agreement. Answers JOPL fulfilled their obligations under the agreement in question. 7.(a) Did the respondent ac- IDC accepted or affirmed or affirm the claimants the JOPLs order for supply order for supply of 4000 ton of 4000 tonnes. as mentioned -nnes as mentioned in para 4 of the statement of the claim ? (b) Did t he claimant send JOPL did not send the original the foreign sale contracts foreign sale contracts to originalnal foreign sale I.D.C. contractsto the respondent. 9.(a) Were the acts mentioned The agreement provided inpara 10 of the counter-state for JOPL sending the orig- ment covered by the agreement nal foreign sale contracts to the respondent at a certain stage. Reference to para 10 of the counter statement IDC. (b) Were the acts mentioned in The agreement provided para 11 of the counter-state- that JOPL would arrange ment covered by the agree- for export license, (Refer- ment. ence to para 11 of the counter-statement of IDC. (c) Were the acts mentioned The agreement provided that in para-12 of the counter- JOPL would procure orders statement covered by the for e xport of 5000 metric agreeement?(JOPL) tonnes of MS rounds within 3 months from the date of acceptance of the IDCs offer and they would follow up th indents placed by the respondent(IDC) for supply of billets and arrange for export licences, letter of authorisation from the Iron the Iron and Steel Controller in time (Ref. to para 12 of counter statement of IDC). 239 (d) Were the acts mentioned in The act s mentioned in para 13 of the counter-state para 13 of the counter-ment covered by the statement by IDC are cov- agreement. red by the previous three paragraphs(10, 11 and 12) of that statement and they have been already dealt/with under sub issues. (a), (b) above. If s o, did the party concer- The party concerned that ned perform such Acts? is the JOPL performed their part of the work as was necessary under the agreement at relevant stage. 10. Was the respondent jus- IDC was not justified in tified in cancelling the cancelling the agreement". agreement? 12. It will be seen that the award says that the agreement provided for JOPL sending the original foreign sale contracts to the respondent at a certain stage." It also says that "JOPL fulfilled their obligations under the agreement in question" and that "JOPL performed their part of the work as w as necessary under the Agreement at relevant Stage" On the other hand, it says that JOPL did not send the original foreign sale contracts to I.D.C. The award then finds that "IDC was not justified in canceling the agreement". (Emphasis supplied). Reading these issues and answers together and harmoniously, it is apparent that the agreement provided that JOPL should send to IDCO the original foreign sale contracts at a certain point of time and that it is found that JOPL had not sent the original foreign sale contracts to IDCO. It is also apparent that it is found that at the point of time at which IDCO purported to cancel the agreement, JOPL had performed all its obligations under the agreement. The conclusion is, there- fore, that upto that point of time JOPL had not been obliged to send the foreign sale contracts to IDCO. So read, in our view, there are no inconsistencies upon the face of the award as can be characterised as errors that vitiate the award. An award has to be read as a whole and harmoniously. The grounds upon which an award can be set aside are limited. The courtshould be very circumspect about setting aside an award reached by an arbitrator for parties have agreed t hat the disputes that may arise or have arisen between them should be resolved not by a court of law but by arbitration. Mr. Patnaik pointed out that the Orissa High Court had recognised that the malady of the racket of arbitration" affected i ts State of Orissa v. Gangaram ahapolia, (1983) 5 OLJ 214 and that this had been taken note of by this court in State of Orissa v. Dandasi Sahu. The court said: "In our opinion, the evidence of such state of affairs should make this court scrutinise the award carefully in each particular case but that does not make the court declare that all high amounts of awards would be bad per se." 13.

Court's decision (1 = petition accepted / positive for appellant, 0 = rejected / negative): 0

Reasoning from the judgment:
0[ds]arbitrator merely referred to the fact that parties had "filed their statements" before him and that he had given "careful consideration to all the written statements, documents and evidence and the arguments".s is not such a reference as can be said to incorporate the pleadings before him in the award.Reference was made to issue No.2 and its answer and it was contended that the arbitrator had thereby made a specific reference to the agreement and it must, therefore, be held that the agreement was incorporated in the award. Issue No. 2 and the answer to it read thus:Was the said agreement a commission agency or export agency agreemente agreement was not a commission agency or export agreement."In the first place, the pleadings before the Subordinate Judge, Bhubaneshwar and the order of reference made by him are not placed by IDCO before us. If it was IDCOs case that no issue of law had specifically been referred to the arbitrator, it was its obligation so to show. But we shall proceed on the basi s that a specific question of law was not referred.e submission on IDCOs behalf was that the arbitrator misconstrued theagreement and, therefore, the court was entitled to look into the agreement and determine whether the award was correct. We do not think that this broad submission is correct. It would appear that the arbitrator construed only such clause of the agreement as was relevant to decide whether the agreement was, as contended by IDCO, a commission or export agency agreement. Such clause alone would be incorporated in the award and could be looked at by the court to determine whether the arbitrator misconstrued it. We cannot accede to the submission that, by reason of the answer to issue no. 2, the entire agreement became incorporated in the award and that it was, therefore, open to the court to look into the entirety of the dispute in the arbitration proceedings and determine whether the award was correctEven assuming the incorporation of the agreement, an error apparent upon the face of the award had to be shown. We may refer with advantage to this courts judgment in Bungo Steel Furniture Pvt. Ltd. v. Union of India.e court quoted the well-known passag e from the judgment of Lord Dunedin inIt went on to observe: An award may be set aside by the court on the ground of an error of law apparent on the face of the award but an award is not invalid merely because by a process of inference and argument it may be demonstrated that the arbitrator has committed some mistake in arriving at his conclusion."It was argued on behalf of IDCO before the High Court that the pleadings before the Subordinate Judge, Bhubnesh war and the order of reference to the arbitrator made by him were not before the arbitrator and that, therefore, the arbitrator had acted without jurisdiction.e High Court rejected that contention and made reference to the order of the Sub ordinate Judge, which we have quoted above, which showed that if directed that the copy of the pleadings and of itself should be sent by, . the Court to the arbitrator. Before us it was submitted that these pleadings and order had not been considered by the arbitrator, because he had not mentioned them in the award. Issues were framed by the arbitrator, obviously in consultation with the parties and arising upon the pleadings.e were several hearings. It is, in these circumstances, inconceivable that the issues would not have reflected the referred dispute between the parties. It is also significant that the pleadings before the Subordinate Judge, Bhubaneshwar, and the statement of claim and the counter filed before the arbitrator were not produced before us by IDCO so that we could determine whether the statement of claim filed by JOPL before the arbitrator raised claims different from those contained in the pleadings before the Subordinate Judge, Bhubaneshwar . It was submitted that the award of damages was based on no evidence or material.e submission was based on the finding that the originals of the foreign sale contracts entered into by JOPL in respect of the goods under the agreement had not been sent to IDCO.t these original agreements had not been sent does not ipso facto lead to the conclusion that the arbitrator had no material before him upon which he could find that JOPL had suffered damage and assess the same in monetarys brings us to the question of the inconsistencies found by the High Court upon the face of the award.e issues and the answers to which the High Court referred are issue Nos. 6, 7(b) and 9(a)In our view, it is necessary to repro duce the issue nos. 6, 7, 9, and 10 and their answers in extenso. "Issues 6. Did the claimant fulfil their obligations under the terms and conditions of the agreement. Answers JOPL fulfilled their obligations under the agreement in question7.(a) Did the respondent ac- IDC accepted or affirmed or affirm the claimants the JOPLs order for supply order for supply of 4000 ton of 4000 tonnes. as mentioned -nnes as mentioned in para 4 of the statement of the claim ? (b) Did t he claimant send JOPL did not send the original the foreign sale contracts foreign sale contracts to originalnal foreign sale I.D.C. contractsto the respondent. 9.(a) Were the acts mentionede agreement provided inpara 10 of the counter-state for JOPL sending the orig- ment covered by the agreement nal foreign sale contracts to the respondent at a certain stage. Reference to para 10 of the counter statement IDC. (b) Were the acts mentioned ine agreement provided para 11 of the counter-state- that JOPL would arrange ment covered by the agree- for export license, (Refer- ment. ence to para 11 of the counter-statement of IDC. (c) Were the acts mentionede agreement provided that in para-12 of the counter- JOPL would procure orders statement covered by the for e xport of 5000 metric agreeement?(JOPL) tonnes of MS rounds within 3 months from the date of acceptance of the IDCs offer and they would follow up th indents placed by the respondent(IDC) for supply of billets and arrange for export licences, letter of authorisation from the Iron the Iron and Steel Controller in time (Ref. to para 12 of counter statement of IDC). 239 (d) Were the acts mentioned ine act s mentioned in para 13 of the counter-state para 13 of the counter-ment covered by the statement by IDC are cov- agreement. red by the previous three paragraphs(10, 11 and 12) of that statement and they have been already dealt/with under sub issues. (a), (b) above. If s o, did the party concer-e party concerned that ned perform such Acts? is the JOPL performed their part of the work as was necessary under the agreement at relevant stage. 10. Was the respondent jus- IDC was not justified in tified in cancelling the cancelling the agreement". agreement?It will be seen that the award says that the agreement provided for JOPL sending the original foreign sale contracts to the respondent at a certain stage." It also says that "JOPL fulfilled their obligations under the agreement in question" and that "JOPL performed their part of the work as w as necessary under the Agreement at relevant Stage" On the other hand, it says that JOPL did not send the original foreign sale contracts to I.D.C.e award then finds that "IDC was not justified in canceling the agreement". (Emphasis supplied). Reading these issues and answers together and harmoniously, it is apparent that the agreement provided that JOPL should send to IDCO the original foreign sale contracts at a certain point of time and that it is found that JOPL had not sent the original foreign sale contracts to IDCO. It is also apparent that it is found that at the point of time at which IDCO purported to cancel the agreement, JOPL had performed all its obligations under the agreement.e conclusion is, there- fore, that upto that point of time JOPL had not been obliged to send the foreign sale contracts to IDCO. So read, in our view, there are no inconsistencies upon the face of the award as can be characterised as errors that vitiate the award. An award has to be read as a whole and harmoniously.e grounds upon which an award can be set aside are limited.e courtshould be very circumspect about setting aside an award reached by an arbitrator for parties have agreed t hat the disputes that may arise or have arisen between them should be resolved not by a court of law but by arbitration.