The Court perused the contract and the impugned award and observed as follows.
When no opportunity is given to deal with an argument that goes to the root of the case or findings based on evidence which goes behind the back of the party, it is a denial of justice to the prejudice of the party and the same amounts to a violation of the principle of natural justice.
In the present case, the petitioner had raised objections to the Final Payment Certificate by filing various documents showing discrepancies in the certificate. Therefore, the finding of the Tribunal that no challenge has been made to the certificate depicted a contrary situation.
And even though the learned Tribunal appreciated the submissions advanced by the petitioner with regard to discrepancies and fallacies in the certificate, the Tribunal failed to adjudicate upon the same. This conduct of the Tribunal is in violation of the rights of the petitioner, and therefore, the said situation is a clear violation of the principle of natural justice.
The term ‘public policy’ has been given a broader meaning by the Hon’ble Supreme Court in a catena of judgments and non-adherence to the principles of natural justice is a violation of the public policy.
The Court held that the operative part of the impugned award suffers from illegality which goes to the root of the matter.
The Court also touched upon the contention of the petitioner that the same Tribunal has not been consistent with its findings based on the same agreement and has taken a different view in another dispute which is exactly contrary to the one taken in the impugned award, especially in the following instances:
A. The learned Tribunal held that the claim of the petitioner is time-barred and dismissed the same on the issue of limitation in the impugned award, a finding exactly opposite to the one given in a different award; and
B. In the different arbitration, the same Tribunal held the same certificate was held to be not a Final Payment Certificate but rather an interim one, and therefore held that the petitioner was not to be liable to make any payment on the basis of a certificate that has not attained finality.
The Court did not rely upon the findings of the learned Tribunal in the award passed in the different Arbitration. However, it opined that the application of principles in the impugned award makes it evident that the learned Tribunal has committed serious errors and wrongly interpreted the contract, thereby, committing a clear violation of the fundamental policy of this country.
The Court held that the findings arrived at by the learned Tribunal in the impugned award are incorrect and in complete violation of the principles of natural justice.
The Court held that the petitioner has made out a case to prove that the impugned award suffers from illegality as the same is against the public policy of this country, inter alia on the following grounds:
a. the Tribunal erroneously directed the payment of the due amount on the basis of a payment certificate despite holding that the same was not a final payment certificate in a different arbitration, a conclusion contrary to its own findings;
b. the non-adjudication of the contentions raised by the petitioner is a clear violation of the principles of natural justice; and
c. the contrary opinions given by the same Tribunal in similar factual scenarios create a bizarre situation and the same cannot be permitted under the law.
The Court set aside the award, calling it a contravention of the settled position of law and, therefore, against the public policy of the country and remanded the dispute back to the Arbitral Tribunal for fresh adjudication.
Source: Barandbench
