Law reporters caused confusion over the Supreme Court’s Constitution Bench ruling on whether courts can modify arbitral awards, the Madras High Court recently observed. [VOC port v. Flemingo Duty Free]
A Bench of Justices GR Swaminathan and MD Sumathi said that the continuous numbering of paragraphs in the majority and partly dissenting opinions in Gayatri Balasamy v ISG Novasoft Technologies Limited had led many readers to treat the final paragraph as the answer to the reference.
"In view of the continuous numbering of the paragraphs of the judgements of both the majority judges as well as that of His Lordship K.V.V.J, many of us went by the final paragraph as the answer to the reference. We did wonder that it was not in tune with what the majority expressed. We would request the law reporters to ensure that such confusions are not caused in the future."
The observation came while the High Court was deciding appeals arising from a dispute between VO Chidambaranar Port Trust and Flemingo Duty Free Shop over the Tuticorin-Colombo ferry service. The service was launched in June 2011 following an India-Sri Lanka initiative to improve economic ties. Flemingo was part of the consortium selected to operate it. However, operations came to an abrupt end in November 2011.
The dispute went to arbitration. The tribunal rejected most of Flemingo’s claims but directed refund of the bank guarantee encashed by the Port Trust with 13 per cent interest. It also rejected the Port Trust’s counterclaim.
The Principal District Court at Thoothukudi later awarded Flemingo an additional ₹68.40 lakh as liquidated damages with 18 per cent interest, even though the arbitral tribunal had rejected that claim.
The High Court set aside this part of the district court’s order.
Referring to Gayatri Balasamy, it said that courts have only a limited power to modify an arbitral award. They cannot re-appreciate evidence and grant a relief which the tribunal itself had refused. The district judge had therefore “virtually rewritten the award” by granting liquidated damages, the High Court held.
The Bench, however, declined to reduce the 13 per cent interest awarded on refund of the bank guarantee.
The VO Chidambaranar Port Trust was represented by Additional Advocate General B Saravanan, assisted by Advocate A Arivuchandran.
Flemingo Duty Free Shop was represented by Senior Advocate C Mani Shankar, briefed by Vast Law Associates.
The Delhi High Court also recently frowned upon the practice of legal resource websites like Manupatra and SCC Online changing paragraphs numbers and other grammatical aspects of court judgments.
[Read Judgment]