In an important decision, the Bombay High Court, led by Justice Sandeep V. Marne, overturned a decision made by a group of arbitrators in the case between Hindustan Petroleum Corporation Limited (HPCL) and Om Constraction, a joint venture with Nice Projects Ltd. The court found several problems with how the arbitrators handled the procedures and evidence.
The disagreement started from a contract given by HPCL to the joint venture for building work at an Ethanol Bio-Refinery in Bathinda. The contract was originally given on July 15, 2021, with a planned finish in 10.5 months. However, due to many delays and problems, HPCL ended the contract on August 26, 2022.
Dishonesty and Misleading Information: The court noted that Nice Projects Ltd. was going through a Corporate Insolvency Resolution Process (CIRP) since February 12, 2021, which was not revealed during the bidding process. This lack of disclosure was seen as hiding important information.
Problems with Procedures: Justice Marne criticized the arbitrators for treating emails as formal requests and stopping HPCL from making proper objections under Section 16 of the Arbitration Act.
No Spoken Evidence: The decision to award claims without spoken evidence was a major issue. The court stressed that claims for damages and compensation need believable evidence, which was missing.
Claims of Unfairness: Although the court did not focus much on the claims of unfairness, it noted the procedural actions that could lead to such views.
The court decided that the arbitrators' findings were unreasonable and lacked a careful approach. It canceled the decision, allowing for the chance of new arbitration proceedings where all issues, including whether the contract was valid, can be fully examined with proper evidence.
This decision highlights the need for honesty and fairness in arbitration, especially in cases involving large amounts of money and claims of dishonesty.
