Summary
The Court upheld a majority arbitral award holding MMTC liable for unpaid copper-rod supplies. The conclusion that the transactions fell under the parties’ consignment agreement and its arbitration clause was a possible view supported by the contract, correspondence, commission payments and conduct. Sections 34 and 37 did not permit a fresh merits assessment merely because MMTC characterised the customer’s direct agreement with the manufacturer as independent.
Issues
- Whether the disputed supplies fell within the agreement and arbitration clause.
- Whether the courts could reassess the contractual and evidentiary merits under Sections 34 and 37.
Provisions considered
- Sections 34 and 37, Arbitration and Conciliation Act, 1996Applied limited award-review and appellate powers, recognising the distinction between the pre-2015 public-policy framework and subsequent amendments. (¶¶ 10, 11, 12, 13, 24)
Held
- A Section 34 court does not sit in appeal on the award. A possible contractual view supported by facts is protected from merits reassessment; Section 37 cannot enlarge those review limits. Concurrent judicial confirmation warrants particular caution before interference. (¶¶ 10, 11, 12, 13)
- Party conduct and correspondence are relevant to contractual interpretation and fall within the arbitrator’s jurisdiction. (¶ 14)
- The contract did not distinguish customers introduced by the manufacturer from those procured by MMTC. MMTC received its full contractual commission, actively participated in the transactions and could identify no separate basis for those services or commission. (¶¶ 15, 16, 17)
- The correspondence and letters of credit supported MMTC’s responsibility to secure and remit payment. Its own communication treated the customer transactions as governed by the consignment agreement, while its officers’ evidence disclosed failure to ensure that the letters of credit were honoured. (¶¶ 18, 19, 20, 21, 22, 23)
- The majority award rested on a reasonable and possible construction. The dispute was within the consignment agreement and arbitration clause, so no ground justified disturbing the award as beyond the submission to arbitration. (¶ 24)
Result
Appeal dismissed; High Court judgment confirming the majority arbitral award affirmed.