Arguments Don’t Fall Within Settled Contours Of Order XLVII Rule 1 CPC Relating To Error: SC While Dismissing Review Applications

The Supreme Court has dismissed the review pleas on the ground that the arguments advanced did not fall within the settled contours of Order XLVII Rule 1 of the Civil Procedure Code relating to an error.

The two-Judge Bench of Justice B.R. Gavai and Justice Vikram Nath held, “Each and every argument having been considered by this Court in its judgment dated 10.08.2021, the arguments advanced if accepted would result in expressing a different opinion on the points raised and decided, which we are afraid do not fall within the settled contours of Order XLVII Rule 1 CPC relating to error apparent on the face of record. The other grounds of invoking the review power are neither existing nor have been raised in the present petitions.”

The Bench was dealing with a matter relating to the arbitration for which it had earlier pronounced its judgment in the year 2021.

Senior Advocate Harish N. Salve appeared for the review petitioner while Senior Advocate Shekhar Naphade appeared for the respondent company.

In this case, review petitions were filed praying for a review of the judgment of the Supreme Court passed on August 10, 2021, whereby the civil appeals were dismissed. A Representation Agreement was executed between DMC Management Consultants Limited and Integrated Sales Service Ltd. (respondent company) and under the said agreement, the respondent company was to find customers for DMC on a commission basis. Any dispute between the two companies was agreed to be subjected to the laws of the State of Missouri, USA.

The said dispute was to be referred to a sole Arbitrator upon failure of which the appointment was to be made as per the rules of American Arbitration Association. Hence, a dispute arose and the arbitrator gave an award in favour of the respondent and made the parties jointly and severally liable to pay an amount with interest. The respondent moved an application under Section 47 of the Arbitration and Conciliation Act, 1996, seeking execution of the said award and then the High Court’s Division Bench held the award to be enforceable against the petitioner.

The Supreme Court after hearing the contentions of the senior counsel observed, “… it is evident that a power to review cannot be exercised as an appellate power and has to be strictly confined to the scope and ambit of Order XLVII Rule 1 CPC. An error on the face of record must be such an error which, mere looking at the record should strike and it should not require any long-drawn process of reasoning on the points where there may conceivably be two opinions.”

The Court said that in paragraphs 30 to 33 of its judgment, it discussed the ingredients and further, in paragraphs 34 to 37, it dealt with the scope of Section 47 of the Act.

“… the argument of the counsel for the Review Petitioner that evidence should be adduced and it should be a full trial to prove that the non-signatory would also be bound by a foreign award, was rejected. … In Paragraph Nos.38 to 57, this Court dealt with in detail the argument that review on merits of the award would be permissible under Section 48(1) of the Act and held against the Review Petitioner as none of the grounds therein were available to the Review Petitioner”, it noted.

The Court further noted that it dealt with the argument that damages awarded in tort would be outside the scope of the arbitration agreement and rejected the said argument.

“In paragraph 71 of the report of the judgment, this Court compared the scope of Section 35 and 46 of the Act and further observed that once the award was not challenged in the State where it was made it could not be said that the arbitral award had infracted the substantive law of the agreement. … Paragraphs 72 and 73 of the report dealt with the issue of violation of any public policy and this Court found that there was no such violation”, also said the Court.

The Court observed that it justified the quantification of the damages and the basis for determining the same even if it was based on best judgment assessment. Hence, it did not find any good ground to allow the review petitions.

Accordingly, the Apex Court dismissed the review pleas.

Cause Title- Arun Dev Upadhyaya v. Integrated Sales Service Ltd. & Anr. (Neutral Citation: 2023INSC610)

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