Home » UHL Power Company Ltd. v. State of Himachal Pradesh

UHL Power Company Ltd. v. State of Himachal Pradesh

Arbitration and Conciliation Act, 1996 – S. 37 – Where two views are possible, the Court cannot interfere in the plausible view taken by the arbitrator supported by reasoning. 

Construction of the terms of a contract is primarily for an Arbitrator to decide unless the Arbitrator construes the contract in such a way that it could be said to be something that no fair-minded or reasonable person could do. A possible view by the Arbitrator on facts has necessarily to pass muster as the Arbitrator is the ultimate master of the quantity and quality of evidence to be relied upon when he delivers his arbitral award.

In the instant case, the interpretation of the relevant clauses of the Implementation Agreement, as arrived at by the learned Sole Arbitrator, are both, possible and plausible. Merely because another view could have been taken, can hardly be a ground for the learned Single Judge to have interfered with the arbitral award. In the given facts and circumstances of the case, the Appellate Court has rightly held that the learned Single Judge exceeded his jurisdiction in interfering with the award by questioning the interpretation given to the relevant clauses of the Implementation Agreement, as the reasons given are backed by logic. We, therefore, uphold the decision of the Appellate Court that has restored the findings returned in the arbitral award dated 05th June, 2005 to the effect that the State of Himachal Pradesh had proceeded to terminate the Implementation Agreement before expiry of the prescribed period which could have been extended up to 24 months, reckoned from the “effective date”. In the instant case, the State of H.P. had terminated the Implementation Agreement five months prior to the stipulated period by adopting a distorted interpretation of Clause 4 of the Implementation Agreement, which was impermissible. In view of the above discussion, Civil Appeal No. 10341 of 2011 preferred by UHL is partly allowed to the extent mentioned in para 6 above, while Civil Appeal No. 10342 of 2011 filed by the State of Himachal Pradesh is rejected in toto. Parties are left to bear their own costs.

Case Law Reference

  1. K. Sugumar v. Hindustan Petroleum Corporation Ltd., (2020) 12 SCC 539
  2. South East Asia Marine Engg. & Constructions Ltd. v. Oil India Ltd., (2020) 5 SCC 164
  3. Dyna Technologies (P) Ltd. v. Crompton Greaves Ltd., (2019) 20 SCC 1
  4. Parsa Kente Collieries Ltd. v. Rajasthan Rajya Vidyut Utpadan Nigam Ltd., (2019) 7 SCC 236
  5. MMTC Limited v. Vedanta Ltd., (2019) 4 SCC 163
  6. Hyder Consulting (UK) Ltd. V. Governor, (2015) 2 SCC 189
  7. Rashtriya Ispat Nigam Ltd. V. Dewan Chand Ram Saran, (2012) 5 SCC 306
  8. State of Haryana v. S.L. Arora and Co., (2010) 3 SCC 690
  9. McDermott International Inc. v. Burn Standard Co. Ltd., (2006) 11 SCC 181

Case Number : Civil Appeal No. 10341 &10342 of 2011; January 07, 2022

Hon’ble Ms.Justice Hima Kohli pronounced the judgment of the Bench comprising Hon’ble the Chief Justice of India, Hon’ble Mr.Justice A.S. Bopanna and Her Ladyship.

For State of H.P. Mr. Abhinav Mukerji, AOR Mrs. Bihu Sharma, Adv. Ms. Pratishtha Vij, Adv. Mr. Akshay C. Shrivastava, Adv. For Respondent(s) Mr. Abhinav Mukerji, AOR For State of H.P. In C.A.10342/11 Mr. Santosh Kumar – I, AOR

Case Link : https://pdf.caselaw.in/sc/2022/01/1146/

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