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Cochin Shipyard Ltd. v. M/s Apeejay Shipping Ltd.

Civil Appeal · Neutral citation not assigned (Civil Appeal No. 9187 of 2015)Decided 6 Nov 2015
Civil Appeal No. 9187 of 2015
Justice Dipak Misra · Justice Prafulla C. Pant

Background

Cochin Shipyard, a government undertaking, agreed in 1980 to build a cargo ship for Apeejay Shipping. A dispute went to arbitration, and the arbitrator's award in 2009 was in favour of the shipyard. Apeejay challenged the award in court on the ground of legal misconduct by the arbitrator, and asked to examine the arbitrator and its own General Manager as witnesses. The trial court refused, but the High Court allowed the General Manager to give evidence.

Decision Breakdown

The Supreme Court allowed the appeal in part and removed the permission to examine witnesses in court. It held that legal misconduct under Section 30 of the 1940 Act must be manifest from the arbitral proceedings and record, so oral evidence cannot be used to prove it. A court hearing an objection to an award does not sit as an appeal, re-appraise evidence or substitute its own view. The civil court was directed to call for the arbitral records, and Apeejay may argue misconduct from those records. The Court expressly expressed no view on whether any misconduct occurred in this case.

Lesson Learnt

A party challenging an arbitral award must prove its grounds from the arbitration record itself, not by bringing in new witnesses. Courts do not re-hear the dispute when reviewing an award.

Official source (sci.gov.in)View Judgment (PDF)

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