Judgment:
Anil Dev Singh, J.
(1) The applicant/respondent. Middle East Exchange & Trade Group of Companies, Dubai (for short 'Meetco (Dubai)') by means of this application under sections 30 and 33 of the Arbitration Act challenges the award of the Arbitrators dated September 26, 1990. The facts giving rise to this application are as under:-
'THE petitioner, the Special Organising Committee for Ix Asian Games(for short 'SOC') and the respondent/applicant Meetco - Dubai entered into an agreement dated March 3, 1982 whereby the former granted to the latter, sole and exclusive world-wide rights & privileges to display advertisement and/or advertise from within and inside the sports venues where Ix Asian Games were to take place during the period November 19, 1982 to December 14, 1982. The rights and privileges granted by the petitioner were subject to the terms & conditions stipulated in the agreement. The agreement postulated that Meetco - Dubai would pay a sum of six million U.S.Dollars in three installments in accordance with clause 2 of the agreement as per below:- i) First Installment of one million dollars to be paid on or before August 30,1982, ii) Second Installment of two million dollars on or before September 30,1982 and iii) Third Installment of three million dollars on or before October 30, 1982.'
(2) The contract also required Meetco - Dubai to furnish an irrevocable bank guarantee for U.S. Dollars six million in favor of Soc within 21 days from the date of signing of the contract in accordance with the form specified in Annexure Iii thereof. In the event of failure of Meetco - Dubai to pay any of the installments on the due dates, the failed Installment could be recovered forthwith by the Soc by invoking the bank guarantee. Meetco - Dubai had also agreed to pay 7,50,000 U.S. Dollars out of the total price of six million dollars in Indian rupees in case Meetco - Dubai received consideration in Indian currency for the advertisement sold by it to any person resident in India. On March 30,1982 Meetco - Dubai assigned its rights and privileges under the aforesaid agreement in favor of Meetco (London), a company incorporated and registered under the laws of the United Kingdom. It is not disputed that Meetco (London) undertook to fulfill the commitment & liability of Meetco (Dubai) and to pay the amounts payable to the Soc under the aforesaid agreement. It is also not in dispute that Meetco Dubai by its communication dated July 23, 1982 confirmed to Soc that it will primarily be liable for performance of its obligation under the contract with SOC. Meetco (Dubai) failed to furnish the bank guarantee by the stipulated-date viz. March 25, 1982. However, it furnished a bank guarantee of a sum of five million U.S. Dollars instead of six million U.S. Dollars on May 6, 1982 from the Bank of Arab Coast and undertook to furnish a bank guarantee for the remaining sum of one million U.S. Dollars by September 30, 1982. Meetco also failed to make payment of the first Installment of a sum of one million U.S. Dollars which became due and payable on August 30, 1982 as per clause 2 of the agreement. It also did not furnish the bank guarantee for the remaining sum of one million U.S. Dollars by September 30, 1982. In view of the default of Meetco,-SOC on September 23, 1982 invoked the arbitration clause, namely, clause .24 of the agreement. On September 30, 1982 Soc nominated Mr.B. Sen as its Arbitrator, while on October 9, 1982 respondent nominated Mr.Justice K.K. Desai as its Arbitrator and also intimated the Soc by communication dated October 19, 1982 that Mr.Justice K.K. Desai would also act as.an Arbitrator on behalf of Meetco (London). Since in terms of clause 24 of the agreement, the disputes and differences were required to be referred to Arbitral Tribunal consisting of three Arbitrators, one to be appointed by each party and the third Arbitrator to be appointed by both the parties and as the parties were unable to agree to the appointment of a third Arbitrator, the Soc on November 2, 1982 filed an application under- section 20 in this Court against Meetco (Dubai) and Meetco (London) for appointment of a third Arbitrator. It needs to be noted that Meetco (London) had already moved the International Chamber of Commerce ( for short 'ICC') for appointment of the third Arbitrator and its President had appointed Mr.James Fitzpatrick as the third Arbitrator. The High Court in view of the appointment of the third Arbitrator by the President of Icc in accordance with clause 24 of the agreement dated March 3, 1982, referred the disputes and differences to the aforesaid three Arbitrators (hereinafter called Arbitrators or Arbitral Tribunal). Soc filed its statement of case before the Arbitrators on June 15, 1983 claiming a sum of six million U.S. Dollars together with interest thereon at 18% and costs from Meetco (Dubai) and Meetco (London). On the other hand Meetcos claimed a sum of eighteen million four hundred eight thousand seven hundred forty nine U.S. Dollars ($.18,408,749) as damages together with interest @ 15% and costs from SOC. The Tribunal proceeded with the matter and had its two sittings on October 13 and 14, 1983. However, Soc not being satisfied with the third Arbitrator, namely, Mr.James Fitzpatrick filed an application under sections 5,8,11,12 and 20 of the Arbitration Act before this Court seeking to revoke his authority as an Arbitrator and the appointment of another Arbitrator in place of Mr.James Fitzpatrick on the ground of a possible connection of one of the witnesses in the arbitration proceedings to the law firm of Mr.James Fitzpatrick. Subse- quently, Mr.James Fitzpatrick resigned as an Arbitrator and this Court on January 20, 1986 appointed Justice A.C.Gupta as the third Arbitrator. The Arbitral Tribunal gave opportunity to both the sides to lead evidence and after hearing the parties made and published the award. On October 26, 1990 the award was filed in this Court. While the petitioner Soc prayed for making the award a rule of the Court, the respondent Meetco (Dubai) filed objections to the same and has prayed that the award be set aside.
(3) The Tribunal upheld the claim of Soc against Meetco (Dubai) for a sum of three million U.S. Dollars as compensation for losses suffered on account of the non payment of the installments under the contract dated March 3, 1982 but rejected the claim of Soc for interest. In so far as Meetco's (Dubai) claim against Soc for damages and interest is concerned, the same was disallowed. As regards the costs, each party was directed to bear one half of the cost of the arbitration.
(4) Not being satisfied with the award of the Arbitral Tribunal, the respondents challenged the award on various grounds by I.A.1161991 under sections 30 and 33 of the Arbitration Act.
(5) Learned counsel appearing for Meetco (Dubai) submitted that the arbitration award suffers from error apparent on the face of the award and the Arbitrators had misconducted themselves as they had reached conclusions contrary to the oral and documentary evidence on record. It was submitted that the obligations undertaken by Soc were not discharged in as much as information required to be given to Meetco under clause 15 of the agreement was not given and unless Soc discharged its obligation to Meetco, the latter was not obliged to make the payments specified in clause 2 of the agreement to the SOC. Learned counsel also canvassed that the arbitrators were not right in holding that the obligation of the respondent to make the payments was complete on March 3, 1982 when the agreement was signed. Consequently, it was submitted that the payments to be made under clause 2 of the agreement were subject to Soc fulfillling its obligation under various clauses of the contract and as Soc violated clause 15 of the agreement by failing to impart requisite information, Meetco was relieved from making any payment under clause 2 thereof. On the other hand, learned senior counsel for the petitioner Soc submitted that the award is a reasoned one and the learned arbitrators being the judges of law and fact have taken a particular decision which cannot be interfered with when there is no error apparent on the face of the award. He also contended that the arbitrators were right in holding that the grant of exclusive advertising right in favor of Meetco became effective on the date when the agreement was signed and there was nothing in the language of clause 2 to suggest that the payments stipulated therein were conditional on the performance of SOC's obligation. He further canvassed that as the agreement was capable of the aforesaid interpretation, the award of the Arbitrators could not be challenged even if another construction thereof was possible.
(6) The learned counsel for the parties have taken me through the award and have drawn my attention to various documents. I have considered the submission of learned counsel for the parties and perused the award and the record. From the record the following undisputed facts emerge:-
I)Meetco did not furnish the bank guarantee for a sum of six million U.S.Dollars by the stipulated date, namely, March 25, 1982. (ii) It was on May 6, 1982 that Meetco furnished a bank guarantee in the sum of five million U.S.Dollars instead of the contracted sum of six million U.S.Dollars. (iii) Meetco failed to pay to the petitioner the first Installment of one million U.S.Dollars which was due on August 30, 1992 as per clause 2 of the agreement. (iv) Meetco failed to make payment of the second Installment of 2 million U.S.Dollars which became due on September 30, 1982. (v) Meetco did not furnish bank guarantee for the remaining sum of one million U.S.Dollars by September 30, 1982 as undertaken by it. (vi) Meetco even failed to make payment of the last Installment of 3 million U.S.Dollars due on October 30, 1982. (vii) Soc invoked the bank guarantee but the bank failed to honour its obligation. (viii) On November 1, 1982 Soc terminated the contract.
(7) Meetco justified the non payment of the contracted sums of money on the ground that the Soc did not furnish the information, namely, complete schedule of 'televising programmes'. The further justification was that Soc failed to abide by its assurance that the arrangements had been made for televising the games live to all countries and as the Soc failed to discharge its obligations, Meetco was not bound to make the payments as per the schedule laid down in clause 2. Since the payment schedule was subject to the carrying out of the obligation by SOC.
(8) The Arbitral Tribunal considered the preamble of the agreement and various clauses thereof including clauses 1, 2, 15 and 18 of the agreement. At this stage, it will be convenient to extract para 3 of the preamble and clauses 1,2, 15 and 18 of the Agreement. . Preamble
'ANDWHEREAS the Advertisers desire to obtain exclusively Worldwide such Advertising Rights within and inside the said sports venues as specified in the Annexure Ii, hereto and the Society is agreeable to grant the said exclusive Advertising Rights to the said Advertisers subject to the limitations, reservations and conditions hereinafter contained; Now thereforee, the parties hereto hereby agree as follows:- 1. Subject to the terms and conditions hereof the Society hereby grants to the Advertisers sole and exclusive Worldwide rights and privileges to display advertisements and/or advertise from within and inside the Sports venues specified in Annexure Ii, hereto, where Ix Asian Games are to sbe held during the period 19th November 1982 through 4th December 1982 both days inclusive. xxxxxxxx Clause-2. In consideration of the Rights hereby granted, the Advertisers shall pay to the Society a net amount of US$.6 million in three installments, the first of Us $.l(one) million to be paid on or before 30th September 1982 and the third of Us $.2 (two) million on or before 30th September 1982 and the third of US$.3(three) million on or before 30th October 1982. The Advertiser shall also furnish an irrevocable Bank Guarantee for US$.6 million in favor of the Society within 21 days from the date hereof in the form set out in Annexure III. In case, the Advertisers fail to pay any of the said installments on the due dates as herein stipulated, the said installments shall be recovered forthwith by the Society from such Bank Guarantee. Clause-15-The Society has made necessary arrangements for televising the games, including televising them live (excusing from Jaipur), in colour, to all the countries which are members of Asian Games Federation. The Society shall at its earliest convenience furnish to the Advertisers a complete schedule of televising programme which shall not be materially altered by the Society. It is agreed that the Society shall not give any spots by way of advertisement in and during such telecast. Clause-18.The Society will provide the Advertisers at the earliest convenience all necessary informations regarding scheduling of games, timing of each event, location of sports venues or Stadia and identification of advertising space etc. and shall not without reasonable notice to the Advertisers alter or modify the same.'
(9) The Tribunal was of the view that clause I of the Agreement and particularly the words 'society hereby grants' support the contention of the Soc that the grant of exclusive advertising rights in favor of Meetco became effective immediately on the date the Agreement was signed and it was so understood by the parties. It was further of the opinion that Meetco proceeded to take steps to exploit the advertising rights by contacting parties for the purposes of procuring advertisements immediately after the signing of the Agreement. The Tribunal also drew support for its view from the further conduct of Meetco (Dubai) in assigning its rights to Meetco (London). The Arbitral Tribunal in this regard observed as follows:- 'Meetco (Dubai) even considered the grant of advertising rights in its favor to have become a tangible and assignable right when it executed the deed of assignment in favor of Meetco (London) on the 30th March, 1982. The recitals in clause I of the assignment leave no room for doubt that Meetco proceeded on the basis that S.O.C. had already granted the advertising rights in favor of Meetco (Dubai).'
(10) The Tribunal was also of the opinion that the words 'subject to the terms and conditions hereof' appearing in clause 1 of the Agreement were meant to impose obligations on Meetco under the Agreement. In coming to this conclusion, the learned arbitrators were influenced by paragraph 3 of the preamble and clause I of the Agreement. In this regard, it will be advantageous to set out the observations of the Tribunal:- This finds support from-a perusal of paragraph 3 of. the preamble read with clause 1 of the agreement. It is significant to note that there is no mention of the S.O.C's obligations in the preamble or in clause I of the agreement. This tends to indicate that the obligations undertaken by the S.O.C. under the contract were not a part and parcel of the rights which were being conveyed to Meetco although such obligations may have some connection with the exercise of the advertising rights.'
(11) In this view of the matter, the learned Arbitral Tribunal held that clause I could be of no assistance to support Meetco's contention that payment under clause 2 was conditional upon Soc performing its obligations.' The Arbitral Tribunal while construing clauses 1 and 2 of the Agreement further held that the right of Soc to receive payment accrued to it on the date of the signing of the contract although the actual payments were to be made later on dates specified in clause 2 and there was nothing in the language of clause 2 to suggest that the payments stipulated therein were conditional upon performance of SOC's obligations. It also construed clauses 16 and 17 in support of the conclusion that payment? were to be made by Meetco on the prescribed dates without any pre-condition and any breach of obligation on the part of the Soc could give rise to claim for compensation if Meetco suffered loss thereby but the default on the part of the Soc could not absolve Meetco from making the payment as per clause 2 of the Agreement. Accordingly, the learned Tribunal came to the conclusion that Meetco was under an obligation to make payment of the various installments in accordance with the provisions of clause 2 of the contract, but considering certain mitigating factors awarded a sum of three million U.S. Dollars in favor of Soc and against Meetco. As would be seen from above the Tribunal has taken the view regarding the liability of Meetco to make payment to Soc and this view is based on the construction placed by the Tribunal on clause I read with clause 2 and para 3 of the preamble and other clauses of the agreement. Besides, as already pointed out, the Arbitrators have taken into consideration the understanding of the parties about the terms of the contract. It took note of the fact that Meetco on the grant of world wide advertising rights considered the grant to be complete on the signing of the agreement as it proceeded to take steps to exploit the rights by contacting other parties for procuring advertisements. The fact that Meetco (Dubai) considered the rights to have become tangible, assigned the same in favor of Meetco (London) on March 30, 1982. The interpretation placed by the learned Arbitrators on the agreement is highly plausible. It may be that the interpretation sought to be placed by the respondent is also possible but that is no ground to set aside the award as when a contract is capable of two interpretations and two views arc possible, one of the possible views adopted by the Arbitrators cannot be found fault with as it is legitimate for the Arbitrators to accept one or other of the possible interpretations and even if the Court is of the opinion that the other view appears to be better, the Court still cannot interfere. This principle is adumbrated and has been followed in various judgments of the apex Court as well as the different High Courts in the country. In M/s.Hind Builders vs . Union of India : [1990]2SCR638 , the principle has been reiterated thus:-
'IN a matter on which the contract is open to two equally plausible interpretations, it is legitimate for the arbitrators to accept one or the other of the available interpretations and, even if the Court may think that the other view is preferable, the Court will not and should not interfere. This view is too well settled to need any reference to any precedent other than Sudershan Trading Co.'s case. : [1989]1SCR665 referred to earlier. That is why we think that this case docs not fall within the principle referred to by Shri Banerjee and that Dr.Ghosh is right in his submission that the Division Bench exceeded its jurisdiction' in interfering with this part of the award.'
(12) Again in U.P. Hotels etc. vs . U.P. State Electricity Board, : AIR1989SC268 , it was observed as follows:-
'EVENassuming, however, that there was an error of construction of the agreement or even that there was an error of law in arriving at a conclusion, such an error is not an error which is amenable to correction even in a reasoned award under the law. Reference may be made to the observations of this Court in Coimbatore Distt. P.T. Samgam v. Bala Subramania Foundry, : [1987]3SCR852 , where it was reiterated that an award can only be set aside if there is an error on its face. Further, it is an error of law and not mistake of fact committed by the arbitrator which is justiciable in the application before the Court. Where the alleged mistakes or errors, if any, of which grievances were made were mistakes of facts if at all, and did not amount to error of law apparent on the face of the record, the objections were not sustainable and the award could not be set aside.'
(13) Where the interpretation or construction placed by. an Arbitrator on a clause of the agreement is conceivable and possible, the Court will have no jurisdiction to set aside the award. The Court while considering the award in proceedings under sections 30 and 33 of the Arbitration Act cannot sit in appeal over the views of the Arbitrator. It cannot re-examine and re-assess the materials which were placed before the Arbitrators.(See: Food Corporation of India vs. Joginderpal Mohinderpal 1989 Sc 1263 and M/s. Alopi Parshad and Sons Ltd. vs. Union of India : [1960]2SCR793 ).
(14) Thus the contention of the learned counsel for the respondent that Meetco was not under any obligation to make payment of the various installments unless and until Soc fulfillled its obligations under the contract, cannot be sustained and cannot be a ground for setting aside the award of the Arbitrators when they on the construction of various clauses of the agreement and latter's conduct, as reflected by its understanding of the bargain,have come to the conclusion that the obligation of Meetco to make the payment of various installments in accordance with the provisions of clause 2 of the contract was without any pre-condition/limitation. In regard to the other contention of the respondent based on clause 15 of the agreement, the Arbitrators have held that even if they were to accept the contention of Meetco that the payment under clause 2 was subject to Soc fulfillling its obligations under the contract, it would not make any difference to their conclusion in light of the fact that Soc had complied with the provisions of clause 15. The learned Arbitrators examining clause 15 of the agreement rejected the submission of the respondent that the said clause contained an assurance that the games will be televised live to all the countries. The Arbitrators were of the opinion that the words 'necessary arrangements' occurring in the said clause did not mean that the Soc had made necessary arrangements for televising the games live in colour to all the countries. According to them, on a plain reading of the words, what is meant was, that the Soc had made arrangements for televising the games to all countries of the Asian Games Federation except those to' be played in Jaipur. In coming to this conclusion, it also considered the statements of the witnesses/affiants. The Arbitrators noticed that Door Darshan had arranged for the signals to be sent up to the satellite and it was a matter for the countries concerned to make arrangements for the reception and viewing of the games depending upon their policies and interests.' The Arbitral Tribunal also considered the statement of Rodney Bantham Wood that the arrangement for televising the games in India and subsequent transmission and reception in a particular country which wishes to view the games was the responsibility of the Soc under the contract. The Tribunal while not agreeing with the statement of Rodney Bantam Wood expressed its difficulty to hold that such an obligation had been undertaken by Soc in a matter that was entirely in the domain of the soverign sphere of other States. The Tribunal was further of the view that it was not conceivable that Soc could have assured Meetco in March 1982 that it had made arrangements for viewing of the games in other Asian countries. The Tribunal refused to read in the words 'necessary arrangements', occurring in clause 15 of the agreement, such wide obligations as would become virtually impossible to discharge. The Tribunal was satisfied that Soc had taken whatever steps as were necessary to facilitate arrangements for other Asian countries to receive the signal for televising the games which were to be transmitted by the Door Darshan. The learned Arbitrators concluded on the basis of the evidence on record that Soc had carried out all that it could reasonably be expected to do by making necessary arrangements for televising games to Asian countries.
(15) The learned senior counsel for the respondent challenged this finding of the Arbitrators. It is sufficient to say that the reasonableness of the reasons given by the Arbitrators on appreciation of evidence which was before them and the construction placed by them on the words 'making of necessary arrangements' for televising the games to other Asian countries cannot be found fault with and are not amenable to correction.
(16) It is well settled that the Court is neither concerned with the quantity or quality of the evidence. If there is some evidence to support the view of the Arbitrators, that should be the end of the matter and the Court cannot substitute its opinion for that of the Arbitrators by taking a different view on the basis of the evidence.
(17) In so far as the claim of Meetco for damages is concerned, since the Arbitrators have held that Soc was not in breach of its obligation under clause 15 of the agreement, Meetco was not absolved from its liability to make payment of the stipulated installments specified in clause 2 of the agreement and since Meetco failed to make the payments of installments, Soc was within its right to terminate the agreement. This being so, the Arbitrators were justified in rejecting the claim of Meetco for damages.
(18) The only question which remains to be considered is with regard to the oral challenge of the Soc to the award of the Arbitral Tribunal in respect of rejection of its claim for pendente lite interest. The Arbitrators relied on the decision of the Supreme Court in Executive Engineer, Irrigation, Galimala and others vs. Abnaduta Jena : [1988]1SCR253 . The Supreme Court in a subsequent case Secretary, Irrigation Department, Government of Orissa and others vs. G.C. Roy, : [1991]3SCR417 has ruled that Abnaduta Jena's case does not lay down good law. But at the same time it held that the present decision shall only be prospective in operation, meaning thereby that the decision in G.C. Roy's case shall not entitle any party nor shall it empower any Court to reopen any proceedings which have already become final. It is true that the proceedings in the instant case have not become final and the question of pendente lite interest is governed by G.C. Roy's case, but the Soc did not file any objections in regard to rejection of its claim for pendente lite interest. thereforee, the oral request of the petitioner for pendente lite interest is rejected.
(19) Having regard to the aforesaid discussion, I.A.1619/91 is dismissed. Consequently, the award is made a rule of the Court and a decree is hereby passed. The petitioner will be entitled to interest at the rate of 14% from the date of the decree till the date of realisation of the decretal amount.
(20) The suit is disposed of.