Delhi High Court The Fertilizer Corporation Of India ... vs I.D.I. Management Incorporation And ... on 7 March, 1984 Equivalent citations: AIR1984DELHI333, 26(1984)DLT149, AIR 1984 DELHI 333, (1984) 26 DLT 149 JUDGMENT Avadh Behari Rohatgi, J. (1) This arbitration has been a long drawn out affair. By a contract dated 1221964 between the Fertilizer Corporation of India (the Corporation) and Girdler Corporation, later known as C.I. Girlder Inc. (the contractor), the contractor agreed to erect and instal a Methanol Plant at the Corporation's Trombay Division at Bombay of the description and on the terms set out in the said contract. The plant was supplied on a turnkey basis. It was to have a capacity to produce 100 metric tons of Methanoi per continuous day of 24 hours with either refinery gas or petroleum naptha as the feed stock. The contractor was to be paid 45 million rupees as the price of the plant. (2) Article Xiv of the said contract contained an arbitration clause which is as follows: "All disputes and differences between the Contractor and the Corporation shall be referred to arbitration, each party appointing an Arbitrator, and the Two Arbitrators nominating an Umpire, as the first step before consideration of any specific issue referred to them. The decision arrived at unanimously by the two Arbitrators, or on their failure to reach unanimous decision the award of the Umpire shall be accepted as final and binding upon both the parties. The provisions of the Indian Arbitration Act, 1940 shall govern the said arbitration proceedings. The venue of the Arbitration shall be New Delhi. The parties hereby expressly submit to the jurisdiction of the courts at New Delhi for all disputes arising out of the Agreement, the Arbitration proceedings and the enforcement of any award that may be made therein." (3) The plant was ready for commissioning on December 29, 1965. The performance of the plant was erotic and unsatisfactory. It did not produce the required quantity of hundred metric tons of Methanoi per day. This was the main complaint of the Corporation. They said that the Catalyst installed in the Reformer Furnace which was specifically guaranteed under the contract to function satisfactorily for a period of one year had repeatedly failed to perform its function, there being repeated failures and shut downs in the plant. There was considerable correspondence between the parties. On February 16,1967 the contractor notified the Corporation that performance test would be carried out by February 19, 1967. Performance test was given accordingly. (4) As a result of various discussions and negotiations that took place between the parties certain understandings were arrived at which were recorded in a letter of March 21, 1967 (the March Agreement). In this agreement the outstanding disputes between the parties were defined. The case of the Corporation is that despite the assurances given by the contractor there was a failure of the Catalyst in operation and the performance of the plant was far from satisfactory. It is alleged that there being something basically wrong with the Reformer Furnace, which was a vital part, the plant was not capable of giving sustained production of 100 metric tons per day. As the contractor failed to remedy the defects in the plant the Corporation terminated the contract and took "juridical possession" of the plant by its letter dated July 8, 1967. (5) In or about 1967 disputes and differences arose between the Corporation and the contractor and in accordance with the said Article Xiv the Corporation duly appointed Mr. B. Sen as an arbitrator and the contractor duly appointed Mr. J. Russell Wilson as an arbitrator and the two arbitrators on February 7,1969 nominated Lord Devin as Umpire. By a supplemental agreement between the parties made on 131973 it was provided that the disputes and differences aforesaid should be considered as having always been referred to Lord Deviin, Mr. Russell Wilson and Mr. B. Sen as the three arbitrators, that Lord Deviin should act as the Chairman of the Arbitral Tribunal and that the award or awards should be made in the manner provided in section 10(2) of the Indian Arbitration Act. (6) This was an eminent Tribunal of Aribtration consisting of members of three countries. Mr. Russell Wilson is a patent attorney of the United States. Mr. B. Sen is a senior advocate of India. Lord Deviin was a law lord in England. They held various sessions between 1971 and 1974. The cost of the arbitration assessed by the Tribunal ran into twelve lacs, parties own expenses being separate. (7) On October 3, 1969 the Corporation filed a request for arbitration which concluded with four claims (hereinafter called claims I, Ii, Iii and IV). On March 14, 1970 the contractor filed the reply which concluded with four claims (hereinafter called counterclaims I, Ii, Iii and Iv counterclaims Iii and Iv being in the a