The Delhi High Court imposed a cost of Rs.1 lakhs on Indian Oil Corporation for taking inconsistent stance in section 34 Arbitration and Conciliation Petition.

 
The Delhi High Court set aside the arbitral award while imposing a cost of Rs.1 Lakhs on Indian Oil Corporation in proceedings under section 34 of the Arbitration and Conciliation Act, 1996.  
The matter pertained to contracts which were executed pursuant to tenders floated by the Respondent, Indian Oil Corporation, for supply, installation and commissioning of Retail Visual Identity Elements at its retail outlets all over the country. The contracts were similar in all respects, except that they related to different State offices of the Respondent. Disputes under the three contracts were heard together with the consent of learned counsel for the parties, and disposed of by a common award dated 13.08.2020. Thereafter, the Petitioner approached the Delhi High Court and filed an application under Section 34 of the Arbitration and Conciliation Act, 1996 challenging the arbitral award.

The Petitioner asserted claims totalling approximately Rs.8.1 crores against the Respondent. These claims primarily revolved around alleged delays in the implementation of the contracts. Additionally, the Petitioner sought redress for the refund of liquidated damages deducted by the Respondent, loss of business opportunity, and price escalation. However, the arbitral award did not delve into the merits of these claims and instead, it concluded that the claims were discharged through accord and satisfaction, implying a resolution through a mutual agreement resulting in a full and final settlement between the parties.

The High Court held thus:

“These inconsistent positions taken by the respondent from time to time have made the task of the Court all the more difficult and fortify the conclusion that the impugned award, based only upon accord and satisfaction without consideration of the merits of the petitioner’s contention, ought not to prevail. It is of paramount significance that the respondent has neither been able to show, upon evidence, the petitioner’s concurrence to the alleged full and final settlement, nor to establish that, even if there was a full and final settlement, payment was made in those terms.”

M/S. Fiberfill Engineers Vs M/S. Indian Oil Corporation Limited