Summary
The arbitral award for coal-price escalation was restored because its contractual interpretation was possible and plausible, and the High Court could not substitute another view. Extension of supply commencement for delayed clearances had not correspondingly changed the escalation terms. However, setting aside the ₹78 crore fixed-cost award and the escrow-refund award was upheld because the former conflicted with the evidence and the latter disregarded the agreed mine-closure funding arrangement.
Issues
- Whether the High Court could substitute its interpretation of the price-escalation clauses.
- Whether the fixed-cost and escrow awards could stand on the record.
Held
- Contractual construction primarily belongs to the arbitrator. A reasonable possible interpretation survives review; the court does not act as an appellate fact-finder or replace it merely because another view is available. (¶ 9–10)
- Supply commencement was extended because of delayed forest and environmental clearances, but the escalation clauses were not correspondingly amended and no agreement fixed the old un-escalated price for later supply. The arbitrator’s retention of 2011–12 as the escalation base was plausible. (¶ 11.1)
- Apart from a chartered accountant’s certificate, the claimed actual loss lacked supporting proof, while the purchaser had lifted more than the stipulated quantity. The ₹78 crore fixed-cost award was contrary to the record. (¶ 11.2)
- The appellant had consented to escrow funding through coal-bill deductions under the mine-closure arrangement. Returning the fund would defeat its purpose, making the contrary arbitral conclusion perverse or irrational. (¶ 11.3)
Result
Appeal partly allowed. Award on claim 1, price adjustment/escalation, restored. High Court’s setting aside of claim 2, fixed costs, and claim 3, escrow account, affirmed. No costs.