ONGC wins arbitration appeal

The Bombay High Court has set aside the arbitral award in the dispute between ONGC and Interocean Shipping (India). ONGC had given a contract to the shipping company for maintenance of its vessels. Disputes arose over payment and the arbitration tribunal accepted 2:1 the claims of the shipping company against which ONGC moved the high court. It said the majority finding rendered by the tribunal that there was no breach of agreed procedure was “totally perverse and patently illegal”. The court stated that there was not only breach of agreed procedure but also violation of natural justice and principles of evidence. Moreover, the procedure was modified without the consent of ONGC. The shipping company had produced 11 volumes of documents, the authenticity of which was disputed by ONGC. But the tribunal dispensed with proof of such documents. Since arbitration was going on for some 18 years, the records of banks regarding payments were also not available.