Deep Industries Limited Vs Oil And Natural Gas Corporation Limited & Anr. (Supreme Court of India)
The Supreme Court considered an appeal arising from the Gujarat High Court’s exercise of jurisdiction under Article 227 of the Constitution of India in relation to proceedings under the Arbitration and Conciliation Act, 1996. The principal issue was the extent to which the High Court could interfere under Article 227 with orders passed in appeals under Section 37 of the Act.
The dispute arose after Oil and Natural Gas Corporation Limited (ONGC) awarded the appellant a five-year contract for the supply of a mobile air compressor. ONGC terminated the contract on 11.10.2017, alleging that part of the equipment supplied was second-hand rather than new. The appellant disputed the allegation. On the following day, ONGC blocked the appellant’s vendor code, preventing it from participating in future tenders. A show cause notice proposing a two-year “holiday” or blacklisting was issued on 18.10.2017.
The appellant invoked the arbitration clause on 02.11.2017, and a sole arbitrator was appointed. A claim petition challenging the contract termination and seeking damages was filed on 02.02.2018. After ONGC passed the blacklisting order on 15.02.2018, the appellant amended both the claim petition and its Section 17 application to challenge the ban order. The amendments were allowed.
