A procedural order needs to be differentiated from an interim award as only the latter can be challenged in the court of law.

[Case Brief] ONGC Petro Additions Limited v/s Tecnimont S.P.A & Ors

Case name ONGC Petro Additions Limited v/s Tecnimont S.P.A & Ors
Case number O.M.P (Comm) 196/2019 and I.A. 7134 of 2019
Court Delhi High Court
Bench Justice Sanjeev Narula
Decided on  July 1, 2019
Relevant Act/Sections Arbitration and Conciliation Act, 1996- Section 2, Section 34 and Section 19
Author of the case brief Lavanya Gupta ([email protected])

 

Brief Facts and Procedural History:

The Petitioner had entered into a contract with the Respondents. After various disputes arising out of the contract, the Respondents issued numerous arbitration notices to the Petitioner. Subsequently, an arbitrator was appointed and an arbitral tribunal was constituted. The procedural timetable for the arbitration was set and re-set and the first statement of claims was filed by Respondent on November 6, 2017. On April 25, 2019, when the Petitioner’s Quantum Expert sought an extension to submit claims and the same was re-iterated by the Respondents’ Quantum Expert, the arbitral tribunal on April 30, 2019, vide an email, stated that “no further evidence was permissible”. However, on the same day, the Petitioner filed an application under Section 19 of the Arbitration and Conciliation Act (“Act”) to produce new documents and witness statements. The aforementioned application of the Petitioner was rejected by the arbitral tribunal and the present application is an appeal against the impugned order.

Issues before the Court of Law:

1) Whether or not the impugned order of the arbitral tribunal is an interim award?

2) Whether or not the impugned order can be challenged under Section 34 of the Act?

Ratio of the Court:

  1. No. An arbitral tribunal can pass a procedural order to determine certain valuable rights of the parties. However, such procedural order does not come under the ambit of Section 2(1)(c) of the Act. In other words, determination of valuable rights of parties is not equivalent to an immediate actionable right. An order/award may be interim and the same is determinable through the factors of ‘finality’ and ‘issue’. If the decision conclusively and finally decides an issue, it would qualify as an interim award. In the present case, the arbitral tribunal vide its order only rejected the Petitioner’s application for placing additional documents on record i.e., it did not conclusively decide on the subject matter of arbitration. Thus, the impugned order does not constitute an interim award.
  2. No. Section 34 of the Act gives the provisions for application for setting aside an arbitral award. However, as stated above, the impugned order does not qualify as an interim award and thus, the same cannot be challenged under Section 34 of the Act.

Decision Held:

In view of Section 19(4) of the Act, the arbitral tribunal rightly exercised its powers and gave a well-reasoned decision to not allow the Petitioner to adduce additional evidence. A procedural order needs to be differentiated from an interim award as only the latter can be challenged in the court of law. An interim award conclusively determines rights of parties with respect to the subject matter of arbitration as opposed to a procedural order. There is no merit in the Petitioner’s application and so the same is dismissed.

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