MMTC LTD. versus M/S VEDANTA LTD. on 18 February 2019

[2019] 3 S.C.R. 1023

MMTC LTD.

v.

M/S VEDANTA LTD.

(Civil Appeal No. 1862 of 2014)

FEBRUARY 18, 2019

[MOHAN M. SHANTANAGOUDAR AND

VINEET SARAN, JJ.]

Arbitration and Conciliation Act, 1996: s.34, 37 – Scope ofinterference with an arbitral award in India – Pre and Postamendment made to s.34 in 2015, position explained.

Arbitration and Conciliation Act, 1996: s.34, 37 – In terms ofArbitration agreement dated 14.12.1993, the appellant wasappointed as a consignment agent from whom respondent couldavail services such as storage, handling and marketing of the copperrods produced by the respondent – Appellant used to raise invoicesin the name of customers and remit the sum received to the respondentafter deducting its services charges – The agreement was alteredlater, and the amendment enabled appellant to supply goods tocustomers against the letter of credit and it was total responsibilityof the appellant to credit the sale proceeds to the respondent –Dispute in the instant matter pertains to supplies made by theappellant to Hindustan Transmission Products Ltd. (HTPL) afterthe amendment of the arbitration agreement – Since the paymentwas not made by HTPL to appellant and who also subsequently didnot make payment for the supplied goods to the respondent, therespondent invoked the arbitration clause under agreement dated14.12.1993 – Arbitral tribunal passed award in favour of therespondent which was confirmed by the High Court – In the instantappeal, the case of the appellant was that it used to supply thegoods of the respondent to customers as per agreement dated14.12.1993 only – However, the appellant had to make deviationfrom this procedure at the request of the respondent by allowing thecustomers arranged by the respondent to lift its goods stored in theappellant’s godown and in such case, the appellant was not boundby the contract since such contract was independent from theagreement dated 14.12.1993 – Held: It is evident from the subsequent

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Aagreement between HTPL and the respondent that a direct agreementexisted between them – However, the appellant received itscommission in its entirety for the HTPL transaction, and thus clearlywas a beneficiary of the agreement between the respondent andHTPL – Series of correspondences amongst appellant, respondentand HTPL also revealed that the appellant was also actively involvedBin the transaction in question entered into between the respondentand HTPL, and as such was a beneficiary under their agreement –The issuance of letters of credit in the name of the appellant withrespect to the HTPL transaction was similar to the practice adoptedin case of letters of credit or demand drafts issued in all otherCtransactions, whether directly negotiated by the respondent, orprocured through the appellant, which suggested that it was theduty of the appellant in this case as well to ensure that letter ofcredits issued were bona fide, and in case of stand-by letters ofcredit, that they were negotiated in time in case of failure of payment on the due date, in terms of agreement dated 14.12.1993 – In thisDview of the matter, it is not open to the appellant to argue that theagreement between the Respondent and HTPL was independent ofthe agreement dated 14.12.1993 between the appellant and therespondent and that the latter did not apply to such transaction –Thus, there was no reason to disturb the award on the ground thatEthe subject matter of the dispute was not arbitrable.

Dismissing the appeal, the Court

Conclusion

HELD: 1.1 Interference with an arbitral award may beundertaken in terms of Section 34 or Section 37 of the Arbitrationand Conciliation Act, 1996. While the former deals with challengesFto an arbitral award itself, the latter, inter alia, deals with appealsagainst an order made under Section 34 setting aside or refusingto set aside an arbitral award. As regards Section 34, the Courtdoes not sit in appeal over the arbitral award and may interfereon merits on the limited ground provided under SectionG34(2)(b)(ii), i.e. if the award is against the public policy of India.Prior to the amendments to the 1996 Act in 2015, a violation ofIndian public policy, in turn, includes a violation of the fundamentalpolicy of Indian law, a violation of the interest of India, conflictwith justice or morality, and the existence of patent illegality inthe arbitral award. Additionally, the concept of the “fundamentalH

policy of Indian law” would cover compliance with statutes andjudicial precedents, adopting a judicial approach, compliance withthe principles of natural justice, and Wednesbury reasonableness.Furthermore, “patent illegality” itself has been held to meancontravention of the substantive law of India, contravention ofthe 1996 Act, and contravention of the terms of the contract. It isonly if one of these conditions is met that the Court may interferewith an arbitral award in terms of Section 34(2)(b)(ii), but suchinterference does not entail a review of the merits of the dispute,and is limited to situations where the findings of the arbitratorare arbitrary, capricious or perverse, or when the conscience ofthe Court is shocked, or when the illegality is not trivial but goesto the root of the matter. An arbitral award may not be interferedwith if the view taken by the arbitrator is a possible view basedon facts. [Paras 10, 11][1031-C-H; 1032-A]

Associate Builders v. DDA (2015) 3 SCC 49 ; ONGCLtd. v. Saw Pipes Ltd. (2003) 5 SCC 705 : [2003] 3SCR 691 ; Hindustan Zinc Ltd. v. Friends CoalCarbonisation, (2006) 4 SCC 445 ; McDermottInternational v. Burn Standard Co.Ltd. (2006) 11 SCC181 : [2006] 2 Suppl. SCR 409 – relied on 1.2 After the 2015 amendments to Section 34, the positionstood modified. Pursuant to the insertion of Explanation 1 toSection 34(2), the scope of contravention of Indian public policywas modified to the extent that it now means fraud or corruptionin the making of the award, violation of Section 75 or Section 81of the Act, contravention of the fundamental policy of Indian law,and conflict with the most basic notions of justice or morality.Additionally, sub-section (2A) was inserted in Section 34, whichprovided that in case of domestic arbitrations, violation of Indianpublic policy also included patent illegality appearing on the faceof the award. The proviso to the same stated that an award shallnot be set aside merely on the ground of an erroneous applicationof the law or by re-appreciation of evidence. [Para 11][1032-B-D]

1.3 Interference under Section 37 with an order made underSection 34 cannot travel beyond the restrictions laid down underSection 34. In other words, the Court cannot undertake an AB

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Aindependent assessment of the merits of the award, and mustonly ascertain that the exercise of power by the Court underSection 34 has not exceeded the scope of the provision. Thus, incase an arbitral award is confirmed by the Court under Section34 and by the Court in an appeal under Section 37, this Courtmust be extremely cautious and slow to disturb such concurrentBfindings. [Para 12][1032-D-F]

2. While interpreting the terms of a contract, the conductof parties and correspondences exchanged would also be relevantfactors and it is within the arbitrator’s jurisdiction to considerthe same. The majority of the arbitral tribunal as well as the CourtsCfound upon a consideration of the material on record, includingthe agreement dated 14.12.1993, the correspondence betweenthe parties and the oral evidence adduced, that the agreementdoes not make any distinction within the type of customers, andfurthermore that the supplies to HTPL were not made inDfurtherance of any independent understanding between theAppellant and the Respondent which was not governed by theagreement dated 14.12.1993. It is evident from the agreementdated 28.07.1994 between HTPL and the respondent that a directagreement existed between them. However, the appellantreceived its commission in its entirety for the HTPL transaction,Eand thus clearly was a beneficiary of the agreement between therespondent and HTPL. Moreover, in this regard, in the MajorityAward, the appellant could not show under what separateagreement it was entitled to commission from such sales otherthan the agreement dated 14.12.1993, and for what services, ifFits only role in the transaction was to allow HTPL to lift goodsfrom its godowns. [Paras 14-16][1033-C-F]

Pure Helium India (P) Ltd. v. ONGC (2003) 8 SCC 593: [2003] 4 Suppl. SCR 561 ; D.D. Sharma v. Union ofIndia (2004) 5 SCC 325 : [2004] 1 Suppl. SCR 767 –Grelied on 3.1 The issuance of letters of credit in the name of theappellant with respect to the HTPL transaction was similar tothe practice adopted in case of letters of credit or demand draftsissued in all other transactions, whether directly negotiated by H

the respondent, or procured through the appellant, which suggeststhat it was the duty of the appellant in this case as well to ensurethat usance letter of credits issued were bona fide, and in case ofstand-by letters of credit, that they were negotiated in time incase of failure of payment on the due date, in terms of theagreement dated 14.12.1993. The Courts also rightly relied uponthe communication dated 06.12.1995 from the Respondent to theAppellant adverting to the terms and conditions of the contractbetween the parties and referring to the fact that in respect ofthe sales made to HTPL in the period of April, May and July1995, an amount of Rs. 9.2 crores together with interest was stillto be received. This communication clearly demonstrated theduty of the appellant to recover the dues from HTPL and forwardthe same to the respondent. [Paras 19, 20][1034-E-H; 1035-A]

3.2 Another important communication rightly relied uponby the Courts is the Appellant’s letter dated 24.01.1996 to theRespondent, informing it about the institution of a suit for damagesby HTPL with respect to the quality of the goods supplied. Thiscorrespondence refers to HTPL as a customer introduced to theAppellant by the Respondent. It was addressed in terms of theagreement dated 14.12.1993, which amounts to a clear admissionthat the sales made to HTPL were in terms of the said agreement.In this view of the matter, it is not open to the Appellant to arguethat the agreement between the Respondent and HTPL wasindependent of the agreement dated 14.12.1993 between theappellant and the respondent and that the latter did not apply tosuch transaction. Moreover, the oral evidence of the officers ofthe appellant indicates that the appellant did not make any effortto ensure that the letters of credits pertaining to the suppliesmade to HTPL were honoured, pointing towards grossnegligence on the part of the Appellant. The view taken in theMajority Award, as confirmed by the High Court in the exerciseof its powers under Sections 34 and 37 of the 1996 Act, is a possibleview based upon a reasonable construction of the terms of theagreement dated 14.12.1993 between the Appellant and theRespondent and consideration of the material on record. Thedispute was covered under the agreement between the Appellantand the Respondent dated 14.12.1993, and as such the dispute is AB

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Agoverned by the arbitration clause under the said agreement.Thus, there is no reason to disturb the Majority Award on theground that the subject matter of the dispute was not arbitrable.[Paras 21, 22 and 23, 24][1035-B-F]

DFrom the Judgment and Order dated 09.02.2009 of the HighCourt of Judicature of Bombay in Appeal No. 949 of 2002.

Shyam Divan, Sr. Adv., Ms. Surekha Raman, Purushottam KumarJha, Ms. Remya Raj, Advs. for the Appellant.

ESanjay R. Hegde, Sr. Adv., Anil Kumar Mishra-I, Pranjal Kishore,Ankit Dhawan, Advs. for the Respondent.

The Judgment of the Court was delivered by MOHAN M. SHANTANAGOUDAR, J.

1. This civil appeal arises out of the judgment and final orderFdated 09.02.2009 passed by a Division Bench of the High Court ofJudicature at Bombay in Appeal No. 949 of 2002, affirming the judgmentand order dated 05.08.2002 of the Learned Single Judge whereby theAppellant’s Objections Petition challenging the Majority Award dated27.06.2001 had been disallowed. Vide the Majority Award, the Appellant Ghad been directed to pay certain amounts to the Respondent under theiragreement dated 14.12.1993.

2. The brief facts leading to the instant appeal are as follows:

M/s Sterlite Industries (India) Ltd., (renamed M/s Vedanta Ltd.,the Respondent herein) was a manufacturer of continuous Cast CopperH

Rods. Vide the agreement dated 14.12.1993, MMTC Ltd. (the Appellantherein), a government company, was appointed as a consignment agentfrom whom the Respondent could avail services such as storage, handlingand marketing of the copper rods produced by the Respondent. Suchrods were to be stored at various godowns of the Appellant. Theagreement dated 14.12.1993 contained an arbitration clause.

3. Importantly, under the aforementioned agreement, the Appellantraised its own invoices in the name of the customers of the products soldand delivered. Goods were to be sold only against payment of 100%advance by the customer to the Appellant, who then had to remit thesame to the Respondent after deducting service charges (i.e. commission)at the rate of Rs. 500/- per metric tonne.

4. The aforementioned agreement was materially altered for thefirst time on 06.01.1994, in terms of a Memorandum of Understandingbetween the parties. This amendment enabled the Appellant to supplygoods to customers against a letter of credit (usance or stand-by), i.e.without advance payment, while maintaining that it was the “totalresponsibility” of the Appellant to ensure the bona fides of the letter ofcredit furnished and that the principal and interest were paid on the duedate for the supplies made against the letter of credit. In case of a stand-by letter of credit, it was further specified that it was the Appellant’sresponsibility, in the event of non-payment by the due date, to negotiatethe stand-by letter of credit in a timely way and credit the sale proceedsto the Respondent. Interest was fixed at 18.25% per annum.

5. A further revision to the above terms was undertaken vide ameeting between the parties on 20.01.1994, the minutes of which indicatethat the Appellant could thereafter extend credit to customers on its ownterms and responsibility, and in case of credit being extended, paymentto the Respondent was to be effected by the Appellant upon delivery ofthe copper rods to the customer.

6. The dispute in the instant matter pertains to supplies of theRespondent’s copper rods made by the Appellant to HindustanTransmission Products Ltd. (in short, “HTPL”) after April 1995. Paymentfor the same were not made by HTPL to the Appellant, who alsosubsequently failed to make payment for the supplied goods to theRespondent. Hence, the Respondent invoked the arbitration clause underthe agreement dated 14.12.1993 and the dispute was referred to a three-member arbitral tribunal.

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A7. The majority of the arbitral tribunal found in favour theRespondent, and vide its award dated 27.06.2001, inter alia directed theAppellant to pay to the Respondent a sum of Rs. 15,73,77,296/- withinterest at the rate of 14% p.a. from 05.02.1997 till the date of the awardand at the rate of 18% p.a. thereafter, as well as an amount of Rs. 2.25crores as interest on overdue payment up to 05.02.1996. The said awardBwas confirmed by the learned Single Judge of the High Court of Bombayas well as the Division Bench thereof.

8. There were several grounds of challenge raised by the Appellantbefore the learned Single Judge of the High Court; however, before theDivision Bench as well as before this Court the main ground raisedCconcerns the arbitrability of the dispute under the arbitration clause underthe agreement dated 14.12.1993. This ground encompasses all otherarguments raised by the Appellant. To elaborate, it is the case of theAppellant that it used to supply the goods of the Respondent to customersarranged by the Appellant as per the Agreement dated 14.12.1993 only.DHowever, sometimes, the Appellant had to make a deviation from thisprocedure at the request of the Respondent, i.e. M/s Vedanta Ltd., byallowing customers arranged by M/s Vedanta Ltd. to lift its goods storedin the Appellant’s godowns. It is further the case of the Appellant thatwhenever it made this deviation, the Appellant was not bound by thecontract between the Respondent and the relevant customer, inasmuchEas such contract was independent of and totally different from theagreement dated 14.12.1993. Whenever there was a direct agreementbetween the Respondent and its customers (not arranged through theAppellant), the payment was to be made directly by the customers tothe Respondent for which the Appellant would not be responsible.FHowever, if the transaction took place pursuant to the agreement dated14.12.1993, i.e. if the Appellant was supplying the Respondent’s goodsto customers booked through the Appellant, the Appellant would beresponsible for collecting the sale consideration from the customers, andto remit the same to the Respondent by deducting commission as agreed.Therefore, the direct agreement between the Respondent and its customerGHTPL in the instant case would not be binding on the Appellant, andconsequently could not have been subjected to the arbitration proceedingsthat led to the arbitral award dated 27.06.2001.

9. On the contrary, the case of the Respondent is that there is nosuch distinction within the nature of transactions undertaken by theAppellant on behalf of the Respondent. Moreover, it is submitted thatthough there was an agreement between the Respondent and HTPL,the terms of such agreement were communicated to the Appellant, uponwhose acceptance of such terms the agreement dated 14.12.1993 stoodmodified to such extent.

10. Before proceeding further, we find it necessary to briefly revisitthe existing position of law with respect to the scope of interferencewith an arbitral award in India, though we do not wish to burden thisjudgment by discussing the principles regarding the same in detail. Suchinterference may be undertaken in terms of Section 34 or Section 37 ofthe Arbitration and Conciliation Act, 1996 (for short, “the 1996 Act”).While the former deals with challenges to an arbitral award itself, thelatter, inter alia, deals with appeals against an order made under Section34 setting aside or refusing to set aside an arbitral award.

11. As far as Section 34 is concerned, the position is well-settledby now that the Court does not sit in appeal over the arbitral award andmay interfere on merits on the limited ground provided under Section34(2)(b)(ii), i.e. if the award is against the public policy of India. As perthe legal position clarified through decisions of this Court prior to theamendments to the 1996 Act in 2015, a violation of Indian public policy,in turn, includes a violation of the fundamental policy of Indian law, aviolation of the interest of India, conflict with justice or morality, and theexistence of patent illegality in the arbitral award. Additionally, the conceptof the “fundamental policy of Indian law” would cover compliance withstatutes and judicial precedents, adopting a judicial approach, compliancewith the principles of natural justice, and Wednesbury reasonableness.Furthermore, “patent illegality” itself has been held to mean contraventionof the substantive law of India, contravention of the 1996 Act, andcontravention of the terms of the contract.

It is only if one of these conditions is met that the Court mayinterfere with an arbitral award in terms of Section 34(2)(b)(ii), but suchinterference does not entail a review of the merits of the dispute, and islimited to situations where the findings of the arbitrator are arbitrary,capricious or perverse, or when the conscience of the Court is shocked,or when the illegality is not trivial but goes to the root of the matter. Anarbitral award may not be interfered with if the view taken by the arbitrator AB

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Ais a possible view based on facts. (See Associate Builders v. DDA,(2015) 3 SCC 49). Also see ONGC Ltd. v. Saw Pipes Ltd., (2003) 5SCC 705; Hindustan Zinc Ltd. v. Friends Coal Carbonisation, (2006)4 SCC 445; and McDermott International v. Burn Standard Co. Ltd.,(2006) 11 SCC 181).

BIt is relevant to note that after the 2015 amendments to Section34, the above position stands somewhat modified. Pursuant to the insertionof Explanation 1 to Section 34(2), the scope of contravention of Indianpublic policy has been modified to the extent that it now means fraud orcorruption in the making of the award, violation of Section 75 or Section81 of the Act, contravention of the fundamental policy of Indian law, andCconflict with the most basic notions of justice or morality. Additionally,sub-section (2A) has been inserted in Section 34, which provides that incase of domestic arbitrations, violation of Indian public policy also includespatent illegality appearing on the face of the award. The proviso to thesame states that an award shall not be set aside merely on the ground ofDan erroneous application of the law or by re-appreciation of evidence.

12. As far as interference with an order made under Section 34,as per Section 37, is concerned, it cannot be disputed that suchinterference under Section 37 cannot travel beyond the restrictions laiddown under Section 34. In other words, the Court cannot undertake anEindependent assessment of the merits of the award, and must onlyascertain that the exercise of power by the Court under Section 34 hasnot exceeded the scope of the provision. Thus, it is evident that in casean arbitral award has been confirmed by the Court under Section 34 andby the Court in an appeal under Section 37, this Court must be extremelycautious and slow to disturb such concurrent findings.F

13. Having noted the above grounds for interference with an arbitralaward, it must now be noted that the instant question pertains todetermining whether the arbitral award deals with a dispute notcontemplated by or not falling within the terms of the submission toarbitration, or contains decisions on matters beyond the scope of theGsubmission to arbitration. However, this question has been addressed bythe Courts in terms of the construction of the contract between theparties, and as such it can be safely said that a review of such aconstruction cannot be made in terms of re-assessment of the materialon record, but only in terms of the principles governing interference withan award as discussed above.H

14. It is equally important to observe at this juncture that whileinterpreting the terms of a contract, the conduct of parties andcorrespondences exchanged would also be relevant factors and it iswithin the arbitrator’s jurisdiction to consider the same. (See McDermottInternational Inc. v. Burn Standard Co. Ltd. (supra); Pure HeliumIndia (P) Ltd. v. ONGC, (2003) 8 SCC 593, D.D. Sharma v. Union ofIndia, (2004) 5 SCC 325).

15. We have gone through the material on record as well as theMajority Award, and the decisions of the learned Single Judge and theDivision Bench. The majority of the arbitral tribunal as well as the Courtsfound upon a consideration of the material on record, including theagreement dated 14.12.1993, the correspondence between the partiesand the oral evidence adduced, that the agreement does not make anydistinction within the type of customers, and furthermore that the suppliesto HTPL were not made in furtherance of any independent understandingbetween the Appellant and the Respondent which was not governed bythe agreement dated 14.12.1993.

16. The Appellant has highlighted before us severalcorrespondences addressed to it from the Respondent that refer to thefact that sales to HTPL had been made under the Respondent’s contractwith HTPL. Indeed, it is evident from the agreement dated 28.07.1994between HTPL and the Respondent that a direct agreement existedbetween them. However, as is undisputed, the Appellant received itscommission in its entirety for the HTPL transaction, and thus clearlywas a beneficiary of the agreement between the Respondent and HTPL.Moreover, in this regard, it was rightly observed in the Majority Awardthat the Appellant could not show under what separate agreement itwas entitled to commission from such sales other than the agreementdated 14.12.1993, and for what services, if its only role in the transactionwas to allow HTPL to lift goods from its godowns.

17. Indeed, it is not the case of the Appellant that it only providedstorage services to the Respondent by allowing the Respondent to storeits goods in the warehouse of the Appellant (i.e. that it only acted as awarehouse for the Respondent). In fact, a series of correspondencesamongst the Appellant, the Respondent and HTPL clearly reveals thatthe Appellant was also actively involved in the transaction in questionentered into between the Respondent and HTPL, and as such was abeneficiary under their agreement, as observed supra. The Appellant AB

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Areleased the Respondent’s goods to HTPL as per the directions of theRespondent without raising any objection, and thereafter engaged incorrespondence in respect of the transaction.

18. It would be appropriate to refer to some such communicationsamongst the Appellant, the Respondent and HTPL for illustrativeBpurposes. For instance, as mentioned by the Respondent in acommunication dated 19.09.1994 addressed to HTPL, the Appellant wasto honour the terms and conditions of the agreement between theRespondent and HTPL. The said communication also referred tonegotiations about issuance of a letters of credit in favour of the Appellant.Additionally, as can be seen from the correspondence from the AppellantCto the Respondent dated 26.08.1994, the Appellant wrote to it to confirmthat credit had to be supplied to HTPL at the discounted interest rate of16.25% p.a., which was affirmed by the Respondent on the same day.At the same time, the correspondence dated 28.03.1995 from theRespondent to the Appellant discloses that a letter of credit issued byDHTPL initially sent to the Respondent was forwarded to the Appellantwith directions to despatch goods after verification of the letter of creditand other related papers.

19. The issuance of letters of credit in the name of the Appellantwith respect to the HTPL transaction was similar to the practice adoptedEin case of letters of credit or demand drafts issued in all other transactions,whether directly negotiated by the Respondent, or procured through theAppellant, which suggests that it was the duty of the Appellant in thiscase as well to ensure that usance letter of credits issued were bonafide, and in case of stand-by letters of credit, that they were negotiatedin time in case of failure of payment on the due date, in terms of theFagreement dated 14.12.1993.

20. The Courts also rightly relied upon the communication dated06.12.1995 from the Respondent to the Appellant adverting to the termsand conditions of the contract between the parties and referring to thefact that in respect of the sales made to HTPL in the period of April,GMay and July 1995, an amount of Rs. 9.2 crores together with interestwas still to be received. The response to the above communication, fromthe Appellant to the Respondent, dated 08.12.1995, stated that theAppellant had taken steps to set the matter right, and that the Appellanthad had certain internal difficulties which had since been resolved andHthe Respondent would have no grounds to complain thereafter. This communication clearly demonstrates the duty of the Appellant to recoverthe dues from HTPL and forward the same to the Respondent.

21. Another important communication rightly relied upon by theCourts is the Appellant’s letter dated 24.01.1996 to the Respondent,informing it about the institution of a suit for damages by HTPL withrespect to the quality of the goods supplied. This correspondence refersto HTPL as a customer introduced to the Appellant by the Respondent.Crucially, it was addressed in terms of the agreement dated 14.12.1993,which amounts to a clear admission that the sales made to HTPL werein terms of the said agreement.

22. In this view of the matter, it is not open to the Appellant toargue that the agreement between the Respondent and HTPL wasindependent of the agreement dated 14.12.1993 between the Appellantand the Respondent and that the latter did not apply to such transaction.

23. Moreover, as noticed in the Majority Award and also by theCourts, the oral evidence of the officers of the Appellant indicates thatthe Appellant did not make any effort to ensure that the letters of creditspertaining to the supplies made to HTPL were honoured, pointing towardsgross negligence on the part of the Appellant.

24. Based upon the above discussion, in our opinion, the viewtaken in the Majority Award, as confirmed by the High Court in theexercise of its powers under Sections 34 and 37 of the 1996 Act, is apossible view based upon a reasonable construction of the terms of theagreement dated 14.12.1993 between the Appellant and the Respondentand consideration of the material on record. We are also of the opinionthat the dispute was covered under the agreement between the Appellantand the Respondent dated 14.12.1993, and as such the dispute is governedby the arbitration clause under the said agreement. Thus, we find noreason to disturb the Majority Award on the ground that the subjectmatter of the dispute was not arbitrable.

25. Appeal is, therefore, dismissed and the order of the High Courtof Judicature at Bombay in Appeal No. 949 of 2002 is affirmed.

Devika Gujral

Appeal dismissed.

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