Mr. Neeraj Yadav, Adv v. ADVANTAGE INDIA LOGISTICS PVT LTD

Judgment

3. This is a petition filed under section 34 of the Arbitration and Conciliation Act, 1996 (“1996 Act”) challenging the Arbitral Award dated 23.06.2022 passed by the learned Arbitrator in Arbitration Case bearing No. DIAC/2879/01-21 titled as “M/s Advantage India Logistics Pvt. Ltd. vs. M/s Asahi India Glass Pvt. Ltd.”. For the sake of brevity, the petitioner before this Court was the respondent in the arbitration proceedings and the respondent herein was the claimant therein. The facts are that the petitioner is an integrated glass and window Digitally Signed By:DEEPANSHU MALASI Signing Date:18.08.2025 15:02:12 O.M.P. (COMM) 462/2022 solution company in India, manufacturing international quality automotive safety glass, float glass and other glass products. The respondent is engaged in the business of delivering wide range of transport and customer-specific logistic services.

4. The petitioner engaged respondent for transporting the float glass, mirror and reflective glass manufactured by the petitioner from its plants/ warehouses to its different plants/ warehouses as well as to its customers’ plants/ warehouses or any other designated locations. For this purpose, the parties entered (2) Agreements Transportation of Goods (“the Agreements”), one dated 11.04.2017 (Roorkee, Uttarakhand) and other dated 25.04.2017 (Taloja, Maharashtra). The tenure of the Agreements was 3 years commencing from 11.04.2017 to 31.03.2020 and 25.04.2017 to 24.04.2020, respectively. The Agreements contains the arbitration clause being Clause No. 12, which is extracted below:- “12. Governing Law & Dispute Resolution (a) This agreement shall be governed and construed in accordance with Laws of India including without limitation, the relevant central / state acts and the rule, regulations and notification issued and amended there under from time to time or enacted / promulgated. (b) The courts and tribunals at Delhi shall have exclusive jurisdiction over the subject matter of this agreement. *** (e) In case of any dispute or difference arising out of or from this agreement, the same shall be referred to Digitally Signed By:DEEPANSHU MALASI Signing Date:18.08.2025 15:02:12 O.M.P. (COMM) 462/2022

arbitration to Mr. Sanjay Ganjoo, C.O.O (float) of the company, whose decision in this regard shall be final and binding on both the parties.” In terms of the Agreements, various Work Orders were issued by the petitioner in favor of the respondent for carrying out the transportation of goods. Since there were disputes between the parties, the respondent invoked arbitration. Thereafter, this Court vide Order dated 25.01.2021 passed in ARB. P. 283/2020 appointed the Sole Arbitrator and observed that the arbitration proceedings to be held under the aegis of Delhi International Arbitration Centre (DIAC). Consequently, the learned Sole Arbitrator entered reference, and on the basis of pleading of the parties framed the following issues vide order dated 25.08.2021, which is extracted below: -

7. “On the basis of the pleadings of the parties and the documents on record, following issues are framed:

1. Whether the claimant is entitled to Rs.28,90,156/- from the respondent for the services rendered and not paid? OPC

2. Whether the respondent illegally and unlawfully terminated the agreements of transportation of goods dated

11.04.2017 and 25.04.2017? If so, its impact. OPC

3. Whether the claimant is entitled to Rs.2,60,61,183/- being losses suffered due to termination of the agreements? OPC

4. Whether the Statement of Claim has not been filed, instituted and verified properly? If so, its effect. OPR

5. Whether the Statement of Claim has not been filed by duly Digitally Signed By:DEEPANSHU MALASI Signing Date:18.08.2025 15:02:12 O.M.P. (COMM) 462/2022 authorized person? If so, its effect. OPR

6. Relief.”

8. By way of the impugned Award, the learned Sole Arbitrator partially allowed the claims of the respondent and granted the following reliefs in favor of the respondent and against the petitioner: - “In light of findings arrived at above, following Award is made:

1. The Claimant shall be entitled to Rs. 7,96,491/- under Issue No. 1.

2. The Claimant shall be entitled to Rs. 14,32,785/- under Issue No. 3.

3. The Claimant shall be entitled to proportionate costs of arbitration.

4. The Claimant shall be entitled to interest @8% on Rs.7,96,491/-from the date of filing of the claim petition till the pronouncement of the Award.

5. The entire award amount shall be paid to the claimant within 30 days, falling which it shall entail interest @8% per annum from the date of Award till its realization.” 9. Mr. Yadav, learned counsel for the petitioner, challenges the impugned Award primarily the findings given on issue Nos. 2 and 3. As regards issue No. 2, the learned Sole Arbitrator held that the termination of the Agreements by the petitioner was not illegal or unlawful, but the respondent was entitled for damages suffered by it due to non-service of the mandatory written notice of 30 days. 10. Learned counsel for the petitioner further states that the learned Sole Digitally Signed By:DEEPANSHU MALASI Signing Date:18.08.2025 15:02:12 O.M.P. (COMM) 462/2022 Arbitrator exceeded his jurisdiction by granting relief for matters outside the scope of reference, specifically awarding amounts based on invoices relating to the Agreement of Roorkee plant when the arbitration concerned only the Taloja plant Agreement.

11. It is further submitted that the impugned Award travels beyond the pleadings and relies on documents that were neither produced nor proved during the proceedings, including a late filed “Profit Margin Summary” showing a 12.02 % margin which formed the basis of the Award under issue No. 3.

12. He draws my attention to prayer No. (b) of the Statement of Claim (“SOC”) filed by the respondent, which reads as under:- “b. Pass an award in favour of the Claimant and against the Respondent, granting the Claimant a sum INR 2,60,61,183/- [Indian Rupees Two Crores Sixty One Thousand One Hundred Eighty Three Only] as compensation towards the huge losses suffered by the Claimant owing to the substantial investments made in machinery, vehicles and related equipment and expenditure incurred on manpower (drivers and workmen) to effectively execute the Agreements No.1 & No.2 and the Work Contract which were illegally and unlawfully terminated by the Respondent; and”

13. The pleadings in support of the said prayer No. (b) are found in paragraph Nos. 5.48 to 5.53 of the SOC, which read as under:- “5.48. The Claimant has suffered huge losses owing to the illegal and unlawful termination of the Agreements No.1 & No.2 and the Work Contract. The estimated loss that has Digitally Signed By:DEEPANSHU MALASI Signing Date:18.08.2025 15:02:12 O.M.P. (COMM) 462/2022 been suffered by the Claimant owing to the substantial investments made in machinery, vehicles and related equipment and expenditure incurred on manpower (drivers and workmen) to effectively execute the Agreements No.1 & No.2 and the Work Contract; is equivalent to INR 2,60,61,183/- [Indian Rupees Two Crores Sixty Lakhs Sixty One Thousand One Hundred Eighty Three Only). Hence therefore, the Respondent is liable to pay the aforesaid sum of INR 2,89,51,339/- [Indian Rupees Two Crores Eight Nine Lakhs Fifty One Thousand Three Hundred and Thirty Nine] [INR 2,60,61,183 + 28,90,156].

5.49. The Petitioner made substantial investments in machinery, vehicles man power, equipment in order to fulfil its obligations under the Agreement 1, Agreement 2 and the Work Contract. The Petitioner scaled up the transportation services as large share of existing resources and additional resources were deployed to fulfil the obligations under the Agreement 1, Agreement 2 and the Work Contract. The tables mentioned below indicate the value of the monthly invoices that were raised to the Respondent company under the Agreement 1, Agreement 2 and the work Contract. Digitally Signed By:DEEPANSHU MALASI Signing Date:18.08.2025 15:02:12 O.M.P. (COMM) 462/2022 Digitally Signed By:DEEPANSHU MALASI Signing Date:18.08.2025 15:02:12 O.M.P. (COMM) 462/2022

5.50. The above tables indicate that the Petitioner raised invoices amounting to INR 13,36,76,498.07 /- [Indian Rupees Thirteen Crores Thirty Six Lakhs Seventy Six Thousand Four Hundred and Ninety Eight] in the financial year 2017-2018 and invoices amounting INR 14,81,82,818.00/- [Indian Rupees Fourteen Crores Eighty One Lakhs Eighty Two Thousand Eight Hundred and Eighteen] in the financial year 2018-2019. Digitally Signed By:DEEPANSHU MALASI Signing Date:18.08.2025 15:02:12 O.M.P. (COMM) 462/2022

5.51. The Petitioner raised invoices amounting to INR 28,18,59,316.10/- [Indian Rupees Twenty Eight Crores Eighteen Lakhs Fifty Nine Thousand Three Hundred and Sixteen and Ten Paise] during the subsistence of Agreement 1, Agreement 2 and the Work Contract. Thus the Petitioner raised average monthly invoices of INR 1,17,44,138.17/- [Indian Rupees One Crore Seventeen Lakhs Forty Four Thousand One Hundred and Thirty Eight and Seventeen Paise] to the Respondent under Agreement 1, Agreement 2 and Work Contract.

5.52. The Agreement 1 and Agreement 2 were illegally and unlawfully terminated by way of email dated 12.09.2018. The Agreement 1 were to be valid from 11.04.2017 to

31.03.2020 and Agreement 2 were to be valid from

25.04.2017 to 24.04.2020.

5.53. The illegal and unlawful termination on 12.09.2018 denied the Petitioner an approximate revenue of INR 14,09,29,658/- [Indian Rupees Fourteen Crores Nine Lakhs Twenty Nine Thousand Six Hundred and Fifty Eight] under Agreement 1 and Agreement 2 for the period 1.04.2019 to

31.03.2020.”

14. Learned counsel for the petitioner relying on the above paragraphs submits that the respondent led no evidence to establish that any loss of profit was suffered, yet the learned Sole Arbitrator awarded the same without there being any supporting evidence or pleadings. He further argues that, since the Agreements were validly terminated, Digitally Signed By:DEEPANSHU MALASI Signing Date:18.08.2025 15:02:12 O.M.P. (COMM) 462/2022 there arises no question of awarding losses for the 30-days period during which prior notice was not served.

15. He further states that the only material indicating alleged loss of profit was a table forwarded to the learned Sole Arbitrator via email dated

24.03.2022, after the respondent’s evidence had concluded. Since this was submitted subsequently, the petitioner had no opportunity to rebut it, and therefore it ought not to have been considered. In support of this submission, he relies on the judgment of Bachhaj Nahar vs. Nilima Mandal & Ors., (2008) 17 SCC 491.

16. Per contra, Mr. Bawa, learned counsel for the respondent states that once the learned Sole Arbitrator found that for the termination of the Agreements the contractual 30-days prior notice was not given, the Award of loss of profit naturally followed. He further states that a comprehensive reading of the SOC shows that the respondent’s case throughout was that the Agreements were wrongfully terminated, thereby entitling it to loss of profit. The respondent emphasises that averments regarding investments made, and manpower employed are clear indicators of such loss, and that the claimed loss of revenue was in fact duly admitted by the petitioner. I have heard learned counsels for the parties.

17. 18. The principles with regard to limited scope of interference by a Court under section 34 of 1996 Act against the Arbitral Award have been reiterated time and again by the Hon’ble Supreme Court and this Court. Reliance is placed on Consolidated Construction Consortium Limited vs. Software Technology Parks of India, 2025 INSC 574, wherein the Hon’ble Supreme Court observed as under: - Digitally Signed By:DEEPANSHU MALASI Signing Date:18.08.2025 15:02:12 O.M.P. (COMM) 462/2022 “23. Scope of Section 34 of the 1996 Act is now well crystallized by a plethora of judgments of this Court. Section 34 is not in the nature of an appellate provision. It provides for setting aside an arbitral Award that too only on very limited grounds i.e. as those contained in sub-sections (2) and (2A) of Section 34. It is the only remedy for setting aside an arbitral Award. An arbitral Award is not liable to be interfered with only on the ground that the Award is illegal or is erroneous in law which would require re-appraisal of the evidence adduced before the arbitral Arbitrator. If two views are possible, there is no scope for the court to re-appraise the evidence and to take the view other than the one taken by the arbitrator. The view taken by the arbitral Arbitrator is ordinarily to be accepted and allowed to prevail. Thus, the scope of interference in arbitral matters is only confined to the extent envisaged under Section 34 of the Act. The court exercising powers under Section 34 has perforce to limit its jurisdiction within the four corners of Section 34. It cannot travel beyond Section 34. Thus, proceedings under Section 34 are summary in nature and not like a full-fledged civil suit or a civil appeal. The Award as such cannot be touched unless it is contrary to the substantive provisions of law or Section 34 of the 1996 Act or the terms of the agreement.”

19. It is a well settled law that the Court in a petition under Section 34 of the 1996 Act cannot sit in appeal and is not required to reappreciate or Digitally Signed By:DEEPANSHU MALASI Signing Date:18.08.2025 15:02:12 O.M.P. (COMM) 462/2022 re-evaluate the evidence.1 The Arbitral Tribunal is the sole judge of the quality and quantity of the evidence. In the absence of any ground under Section 34 of the 1996 Act, it is not possible to re-examine the facts to find out whether a different decision can be arrived at.2 20. The operative portions of the impugned Award dated 23.06.2022 passed by the learned Sole Arbitrator read as under:- “40. In the instant case, no categorical evidence has been produced by the claimant if there was breach of Agreement by the respondent by engaging services of Mis Inland Logistics. No credible evidence has been produced by the claimant, as to, to what extent the respondent had engaged the services of Mis Inland Logistics and how it had affected the claimant's business. As per claimant's own case, in the financial year 2018-19, the invoices raised by him were to the tune of Rs.14,81,82,138.17/-, which exceeded the invoices issued in the financial year 2017-18 which were amounting to Rs.13,36,76,498.07/-. The claimant had no authority under the contract to direct the respondent to change its policy and to agree to the suggestions given by it regarding availing the services of Mis Inland Logistics and to provide truck load of 25 tons instead of 19.5 tons. The claimant acted in a hurry and did not try to resolve the issues amicably after having meaningful consultations with the respondent. Since the respondent was unable to acceed