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Court Should Not Interfere If the Arbitration Is Done After Considering All Facts: Calcutta High Court

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Case- Madan Kumar Saha Vs. Indian Oil Corporation Limited


In an appeal filed under Arbitration and Conciliation Act, 1996 the High Court of Calcutta upheld the decision by the Arbitrator. The decision by the Arbitrator was, although not binding, the court decided not to interfere.


The company Indian Oil Corporation Limited (IOCL) wanted its dealers to appoint a financial working partner. So the Petitioner, who is a dealer of the company appointed one and a power of attorney got executed in favour of him. The company was aware of the agreement, despite that the Respondent initiated a Vigilance Inquiry followed by a show-cause notice for conducting the affairs of petrol pump contrary to the terms of the contract. Hence the Petitioner applied for Arbitration which favoured the Respondent. 

Arguments of the Petitioners’

The Learned Counsel argued that the Arbitrator based his findings on a Vigilance Report which was not produced by IOCL. They also claimed that Respondents deliberately chose not to disclose the Vigilance Report. It is further submitted that the Award was based on conjecture and surmise because the finding of the Arbitrator is being premised on the word “perhaps”. Counsel also assails the Award as being devoid of reasons. Moreover, the deed of partnership had nothing to do with the dealership.

Arguments of the Respondents

The Respondent argued that the Petitioner failed to obtain prior written approval from IOCL before entering into the Partnership Deed which was a breach of contract. For years they had no information on the admission of a new partner and there was no proof that the company had prior knowledge of the same.

Court’s Opinion 

The High Court opined that an Award should not be overturned only because any opinion on the reality or interpretation of the contract is conceivable, and a Court should not intervene or defer to the Arbitrator’s decision unless logic considered was flawed. The court is of the view that the Award contains sufficient and clear reasons for coming to the conclusions and that a definite and intelligible link exists between the factual findings and the conclusions, the Award must be sustained. Hence the Appeal stands off dismissed.


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