An arbitral award which rewrites contract is liable to set aside

Calcom Cement India Ltd. Vs Binod Kumar Bawri & Ors. (Delhi High Court)

Delhi High Court held that rewriting of a contract between two parties, especially a commercial contract, is completely impermissible in law. Accordingly, an arbitral award which rewrites the contract is bound to be set aside.

Facts-

Various agreements were executed among Calcom, Dalmia, the Bawris and SSPL. Once the cobwebs are brushed away and the air is cleared, the controversy is essentially found to relate to Clause 9.1 of the Share Holder Agreement (SHA) dated 16th January 2012 and Clause 3.20 of the Amendment to the SHA dated 30th November 2012 executed among the parties.

The arbitral proceedings, wherefrom the present petitions emanate, were initiated by the Bawris against Dalmia and Calcom. Dalmia filed counter-claims before the learned Arbitral Tribunal. Dalmia alleged that the amounts claimed by the Bawris, in its claims before the learned Arbitral Tribunal, were not payable by Dalmia in view of the admitted failure, by the Bawris, to comply with the Project Conditions as required by Clause 9.1 of the SHA. Rather, contended Dalmia, the failure of the Bawris to comply with the Project Conditions entitled Dalmia to the relief sought by it in its counter­claims.

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