Prayer in O.P No. 438 of 2014: Petition filed under Sections 47 to 49 of the Arbitration and Conciliation Act, 1996 praying that (a) the award dated 14.01.2013, be deemed to be a decree of this Hon'ble Court; (b) this Hon'ble Court pronounce judgment according to the award dated 14.01.2013, made and published by the Singapore International Arbitration Centre and direct the respondent to pay to the petitioner a sum of USD329,273.40, as more particularly set out in paragraph 18 of this petition; (c) the respondent be ordered and decreed to pay the petitioner the costs of this petition; and (d) for such further orders and reliefs as this Hon'ble Court may deed fit and necessary in the facts and circumstances of the case and thus render justice.
Prayer in O.P No. 439 of 2014: Petition filed under Sections 47 to 49 of the Arbitration and Conciliation Act, 1996 praying that (a) the award dated 12.04.2013, be deemed to be a decree of this Hon'ble Court; (b) this Hon'ble Court pronounce judgment according to the award dated 12.04.2013, made and published by the Singapore International Arbitration Centre and direct the respondent to pay to the petitioner a sum of $37,938.12, as more particularly set out in paragraph 23 of this petition; (c) the respondent be ordered and decreed to pay the petitioner the costs of this petition; and (d) for such further orders and reliefs as this Hon'ble Court may deed fit and necessary in the facts and circumstances of the case and thus render justice.
COMMON ORDER
Preface:
Rajiv Shakdher, J.:— Let me preface this judgment with two aspects, which crossed my mind during the course of arguments advanced before me.
2. First, is there a perfect answer to every legal issue, which comes before the Court.
3. Second, will the Court try and reduce the rigours of obligations reflected in a commercial contract, executed between two entities, having equal bargaining power.
4. In so far as the first aspect is concerned, I would be the first one to confess, that there is no perfect answer to every legal problem, which is why, in an adversarial system, one party goes back, feeling dissatisfied.
5. A quietus is put to litigation, only because of a hierarchical system that the Courts maintain. As Judges we are trained to be interventionist. We attempt to set right, in a manner of speech, that slightly crooked picture hanging on the wall, till we reach, what according to us, is a just solution.
6. Whether such an approach is right or wrong, is often governed, both by the jurisdiction that a Judge sits in and the personal disposition as well as predilection of a person exercising that jurisdiction. Some jurisdictions have more width and amplitude than others. Restraints are often self imposed.
7. Arbitration is one such jurisdiction, where the temptation for a judge to straighten that proverbial crooked picture is, immense. Repeatedly, the interventionist in the Judge comes to fore, however, in my view and experience the rule, which should play out, is that, once, parties have made their bed, they should be made to sleep on it. Any other approach is a recipe for docket clogging and is often seen to give succour to critics, and perhaps, rightly, that the alternate dispute resolution system is a failing proposition.
8. Having said so, the exception to this approach should be: that obvious case of fraud, compromised integrity of arbitrators and plainly erroneous awards, which go against the stated position of law and, hence, border on perversity and/or, those awards, which go against public policy.
9. The second aspect, which caught my attention in this case and, in a sense, is interlinked with the first, was the tenacity and, perhaps, the remorselessness, with which, the petitioner was seeking to enforce the award.
10. At first blush, I came to believe that the petitioner was acting in manner which ran close to the conduct of the well known Shakespearean character, Shylock. However, on a closer examination of the case and on a sober reflection, I have come to the conclusion, as my discussion hereafter would reveal, that the, petitioner was much harried and frustrated by the respondent at every step of the case.
Background:
11. These are two petitions filed, essentially, under Sections 47 to 49 of the Arbitration and Conciliation Act, 1996 (in short, ‘the 1996 Act’) by an entity going by the name: Interbulk Trading SA (hereafter referred to as “Interbulk”).
12. Via these petitions, Interbulk, essentially, seeks enforcement of two awards dated 14.01.2013 and 12.04.2013
13. The first award is a final award, concerning the merits of the dispute obtaining between the Interbulk and the respondent, i.e, Adam and Coal Resources Private Limited (hereafter referred to as “Adam Coal”), while the second award is a supplementary award, whereby, costs are awarded in favour of Interbulk by the learned Arbitrator.
14. Based on the first award, Interbulk seeks a direction qua Adam Coal for payment of USD329,273.40. Insofar as the second award is concerned, once again, Interbulk seeks a direction qua Adam Coal for payment of USD 37,938.12, albeit, towards costs.
15. Upon notice being issued in the captioned petitions, Adam Coal has filed its replies. The replies filed are in the nature of objections taken under Section 48 of the 1996 Act.
16. Pertinently, the seat of arbitration was Singapore and the proceedings were governed by Singaporean Law and the rules formulated by the Singapore International Arbitration Centre (in short “the SIAC Rules”).
17. It may be relevant to note that, Interbulk is a Swiss company, which stands incorporated under the laws of Switzerland, while Adam Coal, is an Indian company, incorporated under the laws prevailing in India.
18. The adjudication of disputes, to which, I would make a reference hereafter was carried out by a sole Arbitrator, appointed by the Chairperson of SIAC. The appointment of the sole Arbitrator was made vide a communication dated 24.08.2011, issued by the Chairperson of SIAC.
19. Before I proceed further, I may indicate that the two disputants before me, would be collectively referred to as “the parties”.
FACTS:
20. With this background, I would touch upon the broad facts obtaining in the case, to the extent necessary, to arrive at a conclusion, vis-a-vis, the captioned petitions.
21. In or about 16.09.2010, Interbulk entered into a contract with Adam Coal for supply of 50,000 Metric Tonne (in short “MT”) of steamed coal at a price of USD90 per MT (in short “the cargo”). The time frame, within which, the cargo was to be delivered to Interbulk, spanned between 16.09.2010 and 30.09.2010
22. Admittedly, Adam Coal failed to ship the cargo; a fact, which was conceded by them, on 12.10.2011
23. It appears, that Adam Coal proposed alternative solutions to remedy the breach, and further, went on to propose that, if, they were not acceptable to Interbulk, it was agreeable to payment of a reasonable compensation for non-performance.
24. Since, none of the proposals submitted by Adam Coal were acceptable, Interbulk proceeded to purchase the cargo from an alternate source. This exercise, resulted in Interbulk, obtaining cargo, from another source at a price, which exceeded the contracted rate by USD 11.50 per MT. In effect, for the very same quantity, i.e, 50,000 MT, Interbulk was called upon to pay the higher price, i.e, USD 101.50 MT. Thus, the total amount forked out by Interbulk was USD 575,000.
25. It is, at this point, that is, when, Interbulk informed the Adam Coal, that, it had secured the cargo from another source, that an offer was made by Adam Coal to compensate Interbulk to the extent of USD 5.00 per MT.
26. In and about January, 2011, an agreement was arrived at between parties to settle the Interbulk's claim. However, despite the settlement, Adam Coal did not make the payment to Interbulk. The breach was sought to be justified by invoking the provisions of the Foreign Exchange Management Act, 1999 (in short “FEMA”). Adam Coal stressed that FEMA placed restrictions on remittances to a Non-Resident Company, such as, Interbulk.
27. This resulted in Interbulk seeking legal advice on the scope and effect of provisions of FEMA, qua the settlement reached between the parties, and, whether the provisions of FEMA placed any impediment in remittance of payments.
28. The exercise carried out in this behalf revealed that there were no restriction in law, in Adam Coal making payment in terms of the agreement, which was arrived at pursuant to a commercial agreement obtaining between the parties.
29. Resultantly, on 23.03.2011, Interbulk informed Adam Coal that it would have to pay the agreed amount within fourteen (14) days, i.e, by/or before 06.04.2011, failing which, it would claim the full amount from it, i.e, a sum of USD 575,500.
30. Adam Coal failed to make the payment. Consequent thereto, as stated at the very outset, arbitration was triggered by Interbulk, which led to the appointment of a sole Arbitrator, by the Chairperson of SIAC, vide his communication dated 24.08.2011
31. However, while, the arbitration was on, parties entered into another settlement agreement on 21.09.2011 By virtue of this agreement, Adam Coal was required to pay USD 337,500 towards full and final settlement, albeit, on or before 30.09.2011 This settlement agreement, however, made it clear that in case, the agreed amount, equivalent to USD 337,500, was not paid by Adam Coal to Interbulk by the stipulated date, i.e, on or before 30.09.2011, then, the settlement arrived at would automatically stand declared as null, void and, of no effect, whatsoever.
32. The record shows that Adam Coal signed the settlement agreement dated 21.09.2011, and, had it forwarded to Interbulk via an e-mail dated 23.09.2011 This e-mail of Adam Coal conveyed to Interbulk two essential aspects of the matter: First, that it had signed the settlement agreement 21.09.2011, and that, it would arrange payments to be remitted to Interbulk before 30.09.2011 Second, that as per the “Regulation” put in place by the Reserve Bank of India (in short “RBI”), all foreign exchange remittances from India had to be certified by an Auditor, in the prescribed form, and that, the certificate was required to indicate, whether applicable taxes had been deducted at source from such remittances, and since, there was no clarity, as to whether withholding tax was leviable, in respect of the remittances to be made under the settlement agreement, it would revert qua the same on the following day.
33. What was made clear, though, was that if, any applicable tax was required to be deducted in respect of the remittances to be made, necessary deductions would be made, and the remaining amount would be remitted to Interbulk along with the relevant tax certificate (s), so that, benefit could be claimed by it under the provisions of the Double Taxation Avoidance Agreement (in short “DTAA”).
34. The aforementioned e-mail was followed by Adam Coal, with an e-mail dated 27.09.2011, whereby, it briefly, communicated to Interbulk, that, since, payment to it was on account of non-performance of the contract, tax at the rate of 20% would have to be deducted. Adam Coal, thus, reiterated that they would be remitting the moneys to Interbulk, after adjustment of withholding tax, at the aforementioned rate. Adam Coal, also, reiterated that they would furnish to Interbulk, the relevant certificate in that behalf, so that, it could obtain benefit under the DTAA.
35. Consistent with aforementioned stand, on 28.09.2011, Adam Coal remitted USD 2,70,000 (INR 132,97,500/-) to Interbulk. Thus, out of the agreed amount equivalent to USD3,37,500 (INR 166,21,875/-), USD 67,500 (INR 33,24,375/-) was retained as withholding tax, by Adam Coal.
36. As indicated in its e-mail, Adam Coal withheld USD 67,500, by making deduction at the rate of 20% from USD 337,500.
37. Having remitted the amount on 28.09.2011, Adam Coal, via e-mail dated 29.09.2011, informed Interbulk that its bank account had been debited to the extent of USD 270,000, on account of remittance made to it, after adjusting withholding tax, equivalent to USD 67,500.
38. Importantly, Interbulk did not respond to any of the three e-mails, referred to above, i.e, e-mails, dated 23.09.2011, 27.09.2011 and 29.09.2011 However, on 03.10.2011, Interbulk dispatched a communication to Adam Coal giving it three (3) days to remedy the breach committed, failing which, it was indicated that it would proceed further with the pending arbitration proceeding.
39. It appears that Adam Coal did not act on the communication, whereat, on 13.10.2011, Interbulk sent another communication to Adam Coal, albeit, without prejudice to its rights, to effect, that it could close the matter, if the withheld amount, i.e, USD 67,500 was paid to it, within thirty (30) days.
40. Apparently, Adam Coal did not respond to this communication, as well, which, resulted in Interbulk pressing ahead with its arbitration claim.
41. The record also shows that while the arbitration proceeding was in progress, Interbulk made yet another proposal for settlement, albeit, without prejudice to its rights, to Adam Coal, on 29.08.2012 As per this proposal, Interbulk offered to settle the matter “fully and finally” on the following terms:
i. That Adam Coal would pay to Interbulk a sum USD 67,500.
ii. That Adam Coal would pay to Interbulk costs incurred towards arbitration from the date of acceptance of the offer, albeit, on a “Standard Basis”.
iii. In the event, the aforesaid terms were accepted, Interbulk, would assign in favour of Adam Coal, the right, if any, to seek refund of the withholding tax from the Indian income tax authorities.
iv. Lastly, if, the aforesaid proposals were agreed to in totality, neither party will have any claim against the other.
42. Apparently, this proposal was rejected by Adam Coal and, instead, on 05.09.2012, it proposed a “Drop ends Settlement”.
Arbitration proceeding:
43. It is, in these circumstances, that the disputes obtaining between the parties came to be adjudicated upon by the learned Arbitrator.
Issues Framed:
44. Upon pleadings being filed and evidence being led, the learned Arbitrator addressed himself to the following issues, which, according to him, required determination:
“…. 6.1.1 On an interpretation of the Settlement Agreement, what was the obligation of the respondents in relation to the payment of the Settlement sum?
6.1.2 Under the terms of the Settlement Agreement, to what extent if any, is the obligation of the Respondents to make payment of the Settlement Sum affected by considerations of withholding or other taxes payable in India or elsewhere?
6.1.3 Were the Respondents in breach of the terms of the Settlement Agreement by not making payment of the Settlement Sum on the due date in full and without deductions?
6.1.4 If the Respondents were in breach of the terms of the Settlement Agreement by not making payment of the Settlement Sum in full and without deductions on the due date specified in the Settlement Agreement, what are the consequences of such breach?
6.1.5 If the Claimants are entitled to monetary sum as a consequence of the Respondents’ breach of the terms of the Settlement Agreement, how is this sum, whether liquidated or by way of damages, to be calculated?”
45. A perusal of the issues would show, what, inter alia, came to fore for consideration before the learned Arbitrator was: as to whether, the obligation on the part of the Adam Coal to make payment in accordance with the settlement agreement, was impacted by the requirement, to adjust the withholding tax, which was payable, according to it, to the Indian income tax authorities?
46. This, in fact, was the main reason advanced by Adam Coal, in not wanting to remit the entire agreed amount, as reflected, in the settlement agreement.
47. As a result of the aforesaid, while the parties had agreed before the learned Arbitrator to have the issues determined on a “document-only basis”, expert evidence was led by both sides, with regard to the obligation, if any, of Adam Coal to deduct withholding tax under the provisions of the Indian Income Tax Act, 1961 (in short “the Income Tax Act”). In this context, the testimony of experts was also placed before the learned Arbitrator, with regard to the relevant provisions of the DTAA.
48. Insofar as the Interbulk was concerned, it placed on record witness statements of three persons, namely, Mr. Aliff Fazelbhoy, Mr. Gianni Donati and Mr. Dante Gaslini.
49. On the other hand, Adam Coal sought to rely upon two expert witnesses, namely, Mr. Baskar and Mr. A. Rajaram.
Findings and Conclusions of the Arbitrator:
50. The learned Arbitrator, after having considered the pleadings, the documents and the expert testimonies, reached the following findings and conclusions:
(i). That there was no ambiguity in the settlement agreement, which required, Adam Coal to pay and Interbulk to receive USD 337,500 by or before 30.09.2011
(ii). In case, Adam Coal failed to make the said payment by or before 30.09.2011, the said agreement, would automatically, become null, void and of no effect.
(iii). While the settlement agreement did not contain a provision, which required disputes arising therefrom, to be resolved by arbitration, parties had agreed to deal with the matter, as a dispute under the main contract, and that, no challenge to his jurisdiction, to deal with the matter, had been raised by the parties.
(iv). That Shri. M.B Srinivasan of M/s. Sri. & Co., Chartered Accountants, who had opined that withholding tax was payable on the remittance to be made to Interbulk, was not produced as a witness. Furthermore, the original completed Form 15CB, which had been, evidently, filed by Adam Coal with the income tax authorities in India had not been produced before him.
(iv)(a) To be noted, Mr. M.B Srinivasan had issued a certificate in the aforesaid form (i.e Form 15CB) which led to Adam Coal, adjusting the withholding tax from the remittance sent to Interbulk.
(v). That Mr. Baskar's testimony (i.e one of the witnesses cited by Adam Coal), to the effect, that, if, the contract was performed, withholding tax would not be payable in India, as it would be business income generated in India, and if, as was the situation in the instant case, there was a default in the performance of the contract and, consequent thereto, amounts were payable under a settlement reached between the parties, any payment made pursuant to the said settlement would be subject to withholding tax - was not, backed by reason.
(vi). The testimony of Mr. Baskar did not expound on the issues as to why Adam Coal's Auditor felt it necessary, with specific reference to the nature and terms of the settlement, to certify that withholding tax on the settlement sum, was required to be paid.
(vii). The analysis by the experts cited by Interbulk qua the provisions of Article 22 of the DTAA, was cogent and consistent.
(vii)(a) It is pertinent to note that the experts cited by Interbulk opined that the money receivable by Interbulk under the settlement agreement was, as per the provisions of Article 22 of DTAA, taxable by the concerned authorities in Switzerland.
(viii). The last, but not the least, the examination of the evidence placed before him, led him to conclude that there was no legal basis, upon which, it could be said that the Indian law compelled the parties to ignore the contractual provisions entered into between them with free will and equal bargaining power.
51. The settlement terms, according to the learned Arbitrator, were clear and had to be adhered to and, therefore, it was not necessary for him to decide whether or not tax was payable by Interbulk on the sum reflected in the settlement agreement, and, if, it was payable, whether, it was payable in Switzerland or in India.
52. Furthermore, the learned Arbitrator concluded that it was not necessary for him to decide whether tax payable by Interbulk in India ought to have been withheld, and therefore, if, there was a need to withhold such tax, then, the Adam Coal should have provided for the same and thus, acted in accordance with the provisions of Section 195A of the Indian Income Tax Act. Since, Adam Coal had failed to make a provision for this eventuality, it was not for him to re-write the terms of the agreement to reflect what obviously were matters, which Adam Coal came to realise “post facto”.
53. It is, in this background, that the captioned petitions came to be filed.
Other connected proceedings:
54. However, before I proceed further, it may be relevant to note that Adam Coal had instituted a civil suit, for damages, declaration and permanent injunction, against Interbulk, in this Court in or about 22.04.2013 One of the reliefs sought for, in the suit, was that the final award dated 14.01.2013 should be declared null and void, for want of mandate, in view of the fulfillment of conditions set out in the settlement agreement dated 21.09.2011
55. A learned Single Judge of this Court, vide judgment dated 30.06.2014, held that the suit was barred under the provisions of the 1996 Act and therefore, was liable to be rejected. It was ordered accordingly, and the application preferred in that behalf, by Interbulk, i.e, the defendant in the suit, was allowed.
56. Aggrieved by the judgment of the learned Single Judge, Adam Coal carried the matter in appeal to the Division Bench. The said appeal was numbered: O.S.A No. 207 of 2014.
57. The Division Bench, though, confirmed the order of the learned Single Judge, by dismissing the appeal, on 25.08.2014
58. Being aggrieved, Adam Coal carried the matter further, by way of Special Leave Petition (SLP). The SLP was numbered: Special Leave to Appeal (Civil) No. 31516 of 2014. In the SLP, notice was issued, vide order dated 28.11.2014 I am told that the SLP has come up for hearing on three occasions, i.e, 28.11.2014, 17.04.2015 and 25.08.2015 On 25.08.2015, the Supreme Court, after recording the extract of its earlier order dated 28.11.2014, passed the following directions:
“….. It is submitted by Mr. Vishwanathan, learned senior counsel appearing for the respondent that the awarded amount is much more than USD 337,500. Be that as it may, the respondent is entitled to levy execution except the TDS amount, i.e, USD 67,500. That is the only issue which this Court will be inclined to advert to. It is clarified that petition for execution can be proceeded with as per law for the awarded sum minus USD 67,500.
Let a copy of this petition be served on the office of the learned Attorney General for India, to Union of India as the matter relates to TDS.”
59. In view of the aforesaid direction, both sides stated that this Court should hear the matter, as there was no impediment placed on Interbulk in pressing the captioned petitions, save and except, as indicated in the last order of the Supreme Court.
Submissions:
60. It is, in this background that arguments were advanced by counsel for both sides. On behalf of Interbulk, submissions were made by Mr. Giridharan, while on behalf of Adam Coal, submissions were advanced by Mr. Anirudh Krishnan.
61. Insofar as Mr. P. Giridharan was concerned, his submissions were largely pivoted on the findings reached by the learned Arbitrator. It was stated by the learned counsel that in view of the fact, that the settlement agreement is clear and precise, Adam Coal, was obliged to pay the entire agreed amount, which is USD 377,500, and that, failure to pay the entire amount had led to monetary consequences, which, if it was so inclined, could have been avoided by Adam Coal.
62. In other words, according to the learned counsel, the failure to pay the balance amount i.e, USD 67,500 led to the settlement agreement being declared null, void and of no effect whatsoever.
63. It was submitted by Mr. Giridharan that reliance by Adam Coal on the provisions of the Indian Income Tax Act was erroneous both in law and on facts.
64. Learned counsel submitted that Interbulk was not liable to pay any withholding tax qua the subject remittance, and that, the remittance envisaged under the settlement agreement was liable to be taxed by the Swiss authorities, in view of the provisions of the DTAA. In this behalf reliance was placed on the opinion of the experts, cited by Interbulk, before the learned Arbitrator.
65. Furthermore, in this context, it was submitted that, once, the necessary notification is issued by the Central Government, under Section 90 of the Income Tax Act, for the implementation of the DTAA, the provisions of DTAA would, automatically, override the provisions of the said Act, in matters concerning the chargeability of income to tax, and, where inconsistency was found as between the provisions of the Income Tax Act and the DTAA.
66. In support of this submission, learned counsel relied upon the judgment of the Supreme Court in the matter of: Union of India v. Azadi Bachao Andolan, [(2004) 10 SCC 1]. I must note that I had queried Mr. Giridharan, as to whether the judgment of the Supreme Court in Azadi Bachao Andolan's case was a good law, in view of the judgment of Supreme Court in the Vodafone case.
67. Learned counsel submitted that Azadi Bachao Andolan was good law, even today, qua the proposition, that, in case inconsistency was found as between the provisions of the Income Tax Act and the DTAA, the latter would over ride the former.
68. This apart, learned counsel also placed reliance on a judgment, in the case of Shishir Gupta v. Air India Limited Limited.
69. On the other hand, Mr. Anirudh Krishnan, assailed the impugned awards. The submissions made by Mr. Anirudh Krishnan, in this behalf, can be, broadly, paraphrased as follows:
70. The impugned awards are contrary to the public policy of India, as envisaged under Section 48(2)(b) of the 1996 Act.
71. The judgment of the Supreme Court, in the case of Shri Lal Mahal Limited v. Progetto Grano Spa, 2013 (3) ARBLR 1 (SC), adverted to three sub-heads, which would cover the entire gamut of the expression “public policy of India”: (i) Fundamental Policy of India; (ii) Interest of India; and (iii) Justice and morality. The first sub-head, i.e, fundamental policy of India took within its ambit the wednesbury principles of unreasonableness. (See Oil and Natural Gas Corporation Ltd. v. Western Geco International Limited, [(2014) 9 SCC 263]).
72. Based on the syllogism that, since, wednesbury principle was an integral part of the fundamental policy of India, it was argued that, a foreign award could be set aside, if it did not meet the wednesbury test. It was, thus, submitted that the learned Arbitrator had failed the wednesbury test, inasmuch as, he erred in not taking into account the e-mails dated: 23.09.2011, 27.09.2011 and 29.09.2011
73. The contention was, that, Adam Coal, by these e-mails had clearly indicated that withholding tax would be deducted from the remittance, to which, no reply was received from Interbulk. In other words, the submission made was that, failure on the part of the learned Arbitrator to rule on the effect of the e-mails, amounted to non-consideration of relevant evidence/material, and hence, the impugned awards were violative of the fundamental policy of India.
74. The learned Arbitrator, according to Mr. Krishnan, had committed an error, inasmuch as he did not take into account the fact that, Interbulk had failed to discharge its burden with regard to proof of essential facts, which were required to be established to sustain its submission that withholding tax was not deductable under the Income Tax Act.
75. As a necessary corollary to the submissions made above, it was argued that the learned Arbitrator had failed to take note of the fact that Interbulk had not led evidence to prove that it did not have a permanent establishment in India, a fact, which was required to be proved in order to establish that withholding tax was not deductable on the subject remittance. Furthermore, Mr. Krishnan submitted that since, this fact was within the exclusive knowledge of Interbulk, the burden of proof fell solely on Interbulk and none else.
76. It was next contended that the learned Arbitrator failed to take note of the fact that the Interbulk failed to lead evidence to show that it was entitled to the benefits provided under the DTAA. The learned Arbitrator, on the other hand, the counsel submitted, failed to take note of the fact that Adam Coal was under a statutory duty to deduct withholding tax. In this regard, it was contended that, if, Adam Coal had not deducted withholding tax, it would, then have been declared an “assessee in default” and, would have to face necessary penal consequences under the Income Tax Act.
77. In support of the submission that Adam Coal was required to deduct withholding tax in respect of the remittances made over to a Non-Resident, reliance was placed on Section 195 of the Income Tax Act.
78. Moreover, according to the learned counsel, the learned Arbitrator had failed to take note of the position of law, which is that, when an agreement is silent on the aspect, as to which party was to bear the burden of tax, then, if any payment is to be made, as in the instant case, by one party to the other, it would necessarily have to be inclusive of taxes. In other words, in the absence of a specific provision as to which party had to bear the burden of tax, the learned Arbitrator ought to have ruled that payment to Interbulk could only have been made, after deduction of withholding tax by Adam Coal.
79. It was further contended by the learned counsel that the learned Arbitrator failed to take note of the fact that non-deposit of withholding tax would have impacted the economic interest of the country and, hence, would have been violative of the fundamental policy of India. In support of this proposition, reliance was placed on the judgment of the Supreme Court in: Renusagar Power Co. Ltd. v. General Electric Company [1994 Supp (1) SCC 644].
80. It was argued that the learned Arbitrator failed to note that the acceptance of the settlement agreement was conditional, in view of the aforementioned e-mails, i.e, e-mails dated 23.09.2011, 27.09.2011 and 29.09.2011, and that, it was only after receipt of the balance amount, i.e, USD 270,000, that, Interbulk recommenced the arbitration.
81. The reliance on the provision of Section 195A of the Income Tax Act by the learned Arbitrator was erroneous, inasmuch as the said Section, had no applicability, in view of the admitted position, that there was no agreement between the parties that the amount reflected in the settlement agreement had to be “grossed-up”. The provisions of Section 195A would kick-in, only if, there was an agreement or an arrangement between the parties to have the amounts reflected in the agreement grossed-up.
82. Since, the learned Arbitrator himself held that there was no agreement between the parties with respect to the fact that who will bear the burden of withholding tax, he ought not to have taken recourse to provisions of Section 195A of the Income Tax Act.
83. It was, thus, contended that the award was based on consideration of wholly irrelevant material, and thus, was, violative of the wednesbury principle. In this behalf, the testimony of Adam Coal's expert witness was relied upon.
84. It was further contended that the necessary corollary of the aforementioned submission, was that, when, there was no express agreement between the parties, grossing up was not required to be carried out under Section 195 A of the Income Act, and consequently, the burden of withholding tax had to be borne by the payee. In this behalf, reliance was placed on Sections 195(3), 197, 198 and 199 of the Income Tax Act.
85. It was stated that a reading of the aforementioned Sections would demonstrate that withholding tax is paid by the payer, (i.e, in this case Adam Coal), which is held in trust by the concerned income tax authorities for the payee, i.e, in this case, Interbulk. It was, thus, contended that, in view of the scheme of the Income Tax Act, the provision for refund of income tax is provided under Section 237 of the Income Tax Act and Article 25 of the DTAA. It was also submitted that the burden of tax had to be borne by the recipient of the income, i.e, Interbulk, and that, if, it is held otherwise, it would result in increase in the quantum of the settlement sum.
86. In support of his submissions, learned counsel referred to the following judgments:
i. Commissioner Of Income-Tax v. Adidas India Marketing P. Ltd., (2007) 288 ITR 379.
ii. Chase Manhattan Bank N.A v. Israel-British Bank (London) Ltd., (1981) Ch. 105.
iii. Kotrabasappa v. Indian Bank*, AIR 1987 Kar. 236.
iv. Union Autombile Aerospace And Agricultural Workers of Americaetal v. Hydro Automotive Structures North America, 2 (W.D Mich. Feb. 12, 2015)
87. Apart from the judgments referred to above, Mr. Krishnan, has also relied upon the following judgments, which were referred to, in his written submissions:
i. Commissioner Of Income-Tax v. Adidas India Marketing P. Ltd., [(2007) 288 ITR 379].
ii. Chase Manhattan Bank NA v. Israel-British Bank, [(1981) Ch 185.
iii. Kotrabasappa v. Indian Bank*, AIR 1987 Kar. 236.
88. Mr. Krishnan went on to contend that the reliance by Mr. Giridharan on the provisions of Section 90 of the Income Tax Act and Article 22 of the DTAA was misconceived, and that, in any event, no evidence was led, as adverted to above, by Interbulk, on the aspect of non-existence of a permanent establishment in India.
89. Furthermore, according to Mr. Krishnan, Interbulk's reliance on Section 9(1)(i) of the Income Tax Act was also wholly irrelevant, and erroneous, since, income did, in fact, accrue in India.
90. Lastly, Mr. Krishnan, submitted the fact that Adam Coal had not challenged the award in Singapore would not, in any manner, impact the submissions made in defence to the action instituted in this Court for enforcement of the impugned awards, as the Adam Coal had available to it, in law, a choice of legal remedies, so to say. In other words, a party aggrieved by a foreign award could either assail it, by initiating appropriate proceedings under the relevant statute before the concerned forum, or put up its defence qua the foreign award at a point in time, when it is sought to be enforced. Therefore, merely because Adam Coal had taken recourse to the latter remedy, which is, to defend enforcement of the foreign award, the efficacy of its defence would not get impacted or stand diluted in law.
REASONS:
91. Having heard the learned counsel for parties and perused the record, what has clearly emerged, is as follows:
(1) Admittedly, the parties had entered into a contract, dated 16.09.2010 Under the said agreement, Adam Coal was required to supply 50,000 MT cargo (steamed coal) to Interbulk at USD 90.00 per MT.
(2) There was, admittedly, a failure on the part of the Adam Coal in fulfilling its obligation under the aforementioned contract. This fact was communicated by Adam Coal to Interbulk on 12.10.2011
(3) Interbulk, resultantly, obtained the cargo from an alternative source at a higher price. The rate, at which, Interbulk obtained its cargo was USD 101.50 MTN. In or about January 2011, a settlement was reached between the parties, under which, payment was required to be made by Adam Coal. Adam Coal failed to make payments under the said settlement, and, in defence of its action, relied upon, purported restrictions under FEMA.
(4) Upon Interbulk obtaining an opinion as to the state of the law, it got revealed that there was in fact, that no such restriction in place under FEMA. Accordingly, Interbulk gave fourteen (14) days time to Adam Coal to make the payment under the January 2011 settlement. This communication was sent to Adam Coal on 23.03.2011, which required Adam Coal to make payment by or before 06.04.2011 Adam Coal, decidedly, failed to make payment in terms of communication dated 23.03.2011
(5) After further negotiations, a fresh settlement was executed between the parties on 21.09.2011 Under the said agreement, Adam Coal was required to pay a total sum of USD 337,500 to Interbulk on or before 30.09.2011 The settlement agreement provided that breach of this obligation would result in the settlement agreement being automatically declared null and void and/or having no effect whatsoever.
(6) Adam Coal prior to the end date, i.e, 30.09.2011, sent three (3) e-mails to Interbulk, which are dated 23.09.2011, 27.09.2011 and 29.09.2011 None of these e-mails are replied to by Interbulk.
(7) Via e-mail dated 23.09.2011, Adam Coal dispatched a signed copy of the settlement agreement dated 21.09.2011, to Interbulk. In the very same e-mail, Adam Coal did indicate that it was seeking to take advice as to whether withholding tax had to be deducted on the remittance envisaged under the said agreement. It was also indicated that, if, such eventuality arose, then, necessary deduction of withholding tax would be made. This aspect was reflected in the other two e-mails, as well, i.e, e-mails dated 27.09.2011 and 29.09.2011
(8) On 28.09.2011, Adam Coal remitted a sum of USD 2,70,000, after withholding towards tax an amount equivalent to USD 67,500.
(9) USD 67,500 has been deposited with the Indian income tax authorities.
(10) The testimony of Mr. Gianni Donati would show that he had received confirmation from the relevant Swiss authorities that on the sum received, i.e, USD 270,000, Interbulk would have to pay tax amounting to USD 51,906.
(11) Neither Mr. M.B Srinivasan, the Auditor of Adam Coal, who issued the certificate in the prescribed Form 15CB, was cited as a witness nor, was the certificate, in original, filed, with the learned Arbitrator.
92. Having regard to the facts, briefly, encapsulated above, the issue which arises for adjudication is: whether the impugned awards are in breach of the fundamental policy of India, i.e, contrary to the wednesbury principles. In other words, did the learned Arbitrator ignore the relevant material or, as argued in the alternative, went into irrelevant circumstances and facts, which had no bearing on the issue arising between the parties.
93. It must be stated, at the outset, that the principles of law articulated in the three judgments of the Supreme Court, i.e, Renusagar Power Co. Ltd. v. General Electric Company [1994 Supp (1) SCC 644], Shri Lal Mahal Limited v. Progetto Grano Spa, 2013 (3) ARBLR 1 (SC) and Oil and Natural Gas Corporation Ltd. v. Western Geco International Limited, [(2014) 9 SCC 263] cannot be quibbled with. It is only the correct application of the principles set forth in the judgements, which is relevant to the instant case.
94. Mr. Krishnan, has submitted that, since, the learned Arbitrator failed to take into account e-mails dated 23.09.2011, 27.09.2011 and 29.09.2011, he had ignored vital material, as there was no discussion as to what was the impact of these e-mails on the transaction in issue. In support of this submission, it was contended by Mr. Krishnan that the acceptance of the settlement agreement by Adam Coal was conditional. In other words, it had been made clear that, if, withholding tax had to be paid, then, remittance would be made to Interbulk only after deducting the amount payable towards withholding tax. Learned counsel, thus, submitted that despite such clear and categorical assertions in the aforementioned e-mails, there was no response from Interbulk till such time, it received the balance amount, albeit, after adjustment of tax.
95. As would be evident from the submissions advanced by Mr. Anirudh Krishnan, that there is a tacit acceptance of the fact that the Arbitrator had referred to the aforementioned e-mails in the impugned award.
96. As a matter of fact, learned Arbitrator has made a specific reference to the said e-mails in paragraph 5.2 to 5.2.10 of the award dated 14.01.2013, i.e, the final award.
97. The argument of Mr. Anirudh Krishnan, thus, in effect, veered around the point, that, though, there is a reference to the e-mails in the impugned award, the learned Arbitrator did not conclude, one way or the other, as to what was the impact of the e-mails on Adam Coal's decision to send remittances under settlement agreement after making an adjustment towards withholding tax.
98. In my view, this submission is misconceived for the reason that the argument, which was advanced before the learned Arbitrator, based on the e-mails, was, that, if, there was an obligation on the part of Adam Coal to deduct withholding tax, then, remittance of amount mentioned in the settlement agreement, would be made to Interbulk, only after, making due adjustment in that behalf.
99. It is because of this argument, that elaborate submissions were made on behalf of the Adam Coal, based on the provisions of Section 195 of the Income Tax Act. It is in line with this argument, that submissions were also made that, if, Adam Coal had not deducted withholding tax, then, it would have been declared an “assessee in default”, with, concomitant penal consequences following, such a declaration.
100. The testimonies of expert witnesses were filed by both sides to advance their points and counter-points, with regard to tenability of the defence put forth by Adam Coal that, it was obliged to deduct the tax at source.
101. Therefore, for Mr. Krishnan to say that no conclusion was reached with regard to what was the impact of the aforementioned e-mails on the transaction in issue is, to my mind, not quite accurate.
102. At this point, I may also deal with the argument, which was advanced on behalf of the respondent, which is that, provision of Section 195 of the Income Tax Act, 1961 (in short 1961 Act) necessarily obligated deduction of withholding tax, by the payer, without fail, every time a payment was made to a non-resident. In my view, this submission of the respondent is completely misconceived.
103. This, I say for the reason that the expression “chargeable under the provisions of the Act”, appearing in sub-section (1) of Section 1951 of the Income Tax Act is clearly demonstrative of the fact that tax has to be deducted only on those sums, which are assessable to tax. In other words, if, a payment made to non-resident is not chargeable to tax, then, the payer is not obliged to deduct tax at source.
104. This aspect of the matter has been explained at some length by the Supreme Court in two (2) judgments, i.e, CIT v. Eli Lilly & Company (India) Pvt. Ltd., (2009) 312 ITR 225 and Ge India Technology Cen. P. Ltd. v. CIT, (2010) 327 ITR 456.
105. In Ge's case, Eli Lilly was cited with approval. Furthermore, in Ge's case, the earlier judgment of the Supreme Court in Transmission Corporation of A.P Ltd. v. C.I.T (1999) 239 ITR 587 (SC) was explained, the ratio of which up till then was often misconstrued.
106. Prior to the Supreme Court's judgement in GE's case, there was an impression, erroneous though, amongst some sections of the assessees and the Revenue that whenever a payment was to be made to a non-resident withholding tax had to be deducted whether or not the payment was chargeable to tax. The Supreme Court, in Ge's case, explained that the facts obtaining in Transmission Corporation's case pertained to a composite contract, whereby, part of the income was chargeable to tax in India, while the other part was not chargeable to tax in India and that, it was in this context, that the Court had held that tax at source qua payment made to the non-resident had to be deducted.
107. The relevant observations of the Supreme Court in Ge's case, for the sake of convenience, are extracted hereinbelow:
“….. The most important expression in Section 195(1) consists of the words “chargeable under the provisions of the Act”. A person paying interest or any other sum to a non-resident is not liable to deduct tax if such sum is not chargeable to tax under the I.T Act. For instance, where there is no obligation on the part of the payer and no right to receive the sum by the recipient and that the payment does not arise out of any contract or obligation between the payer and the recipient but is made voluntarily, such payments cannot be regarded as income under the I.T Act. It may be noted that Section 195 contemplates not merely amounts, the whole of which are pure income payments, it also covers composite payments which has an element of income embedded or incorporated in them. Thus, where an amount is payable to a non-resident, the payer is under an obligation to deduct TAS in respect of such composite payments. The obligation to deduct TAS is, however, limited to the appropriate proportion of income chargeable under the Act forming part of the gross sum of money payable to the non-resident. This obligation being limited to the appropriate proportion of income flows from the words used in Section 195(1), namely, “chargeable under the provisions of the Act”. It is for this reason that vide Circular No. 728 dated October 30, 1995 the CBDT has clarified that the tax deductor can take into consideration the effect of DTAA in respect of payment of royalties and technical fees while deducting TAS. It may also be noted that Section 195(1) is in identical terms with Section 18(3B) of the 1922 Act. In Commissioner Of Income-Tax, Bombay City I v. Cooper Engineering Ltd.* (1968) 68 ITR 457 it was pointed out that if the payment made by the resident to the non-resident was an amount which was not chargeable to tax in India, then no tax is deductible at source even though the assessee had not made an application under Section 18(3B) (now Section 195(2) of the I.T Act). The application of Section 195(2) pre-supposes that the person responsible for making the payment to the non-resident is in no doubt that tax is payable in respect of some part of the amount to be remitted to a non-resident but is not sure as to what should be the portion so taxable or is not sure as to the amount of tax to be deducted. In such a situation, he is required to make an application to the ITO(TDS) for determining the amount. It is only when these conditions are satisfied and an application is made to the ITO(TDS) that the question of making an order under Section 195(2) will arise. ………
We cannot read Section 195, as suggested by the Department, namely, that the moment there is remittance the obligation to deduct TAS arises. If we were to accept such a contention it would mean that on mere payment income would be said to arise or accrue in India. Therefore, as stated earlier, if the contention of the Department was accepted it would mean obliteration of the expression “sum chargeable under the provisions of the Act” from Section 195(1). While interpreting a Section one has to give weightage to every word used in that section. While interpreting the provisions of the Income Tax Act one cannot read the charging Sections of that Act de hors the machinery Sections. The Act is to be read as an integrated Code. Section 195 appears in Chapter XVII which deals with collection and recovery. As held in the case of C.I.T v. Eli Lilly & Co. (India) (P.) Ltd. [312 ITR 225] the provisions for deduction of TAS which is in Chapter XVII dealing with collection of taxes and the charging provisions of the I.T Act form one single integral, inseparable Code and, therefore, the provisions relating to TDS applies only to those sums which are “chargeable to tax” under the I.T Act. It is true that the judgment in Eli Lilly (supra) was confined to Section 192 of the I.T Act. However, there is some similarity between the two. If one looks at Section 192 one finds that it imposes statutory obligation on the payer to deduct TAS when he pays any income “chargeable under the head salaries”. Similarly, Section 195 imposes a statutory obligation on any person responsible for paying to a non-resident any sum “chargeable under the provisions of the Act”, which expression, as stated above, do not find place in other Sections of Chapter XVII. It is in this sense that we hold that the I.T Act constitutes one single integral inseparable Code. Hence, the provisions relating to TDS applies only to those sums which are chargeable to tax under the I.T Act. If the contention of the Department that any person making payment to a non-resident is necessarily required to deduct TAS then the consequence would be that the Department would be entitled to appropriate the moneys deposited by the payer even if the sum paid is not chargeable to tax because there is no provision in the I.T Act by which a payer can obtain refund. Section 237 read with Section 199 implies that only the recipient of the sum, i.e, the payee could seek a refund. It must therefore follow, if the Department is right, that the law requires tax to be deducted on all payments. The payer, therefore, has to deduct and pay tax, even if the so-called deduction comes out of his own pocket and he has no remedy whatsoever, even where the sum paid by him is not a sum chargeable under the Act. The interpretation of the Department, therefore, not only requires the words “chargeable under the provisions of the Act” to be omitted, it also leads to an absurd consequence ……..”
(emphasis is mine)
108. The other submission of Mr. Krishnan that Interbulk acquiesced to the suggestion made on behalf of Adam Coal that adjustment towards withholding tax would be made, out of the remittances payable under the settlement agreement, if, it was deductible, is, to my mind, a submission, which is untenable for two (2) reasons.
109. First, while sending the e-mail dated 23.09.2011, the respondent had already signed and sent out the settlement agreement, which bore the date 21.09.2011 At that stage, Adam Coal itself was not sure as to whether the remittance to be made to Interbulk was exigible to withholding tax.
110. Second, it was completely within the discretion of Adam Coal not to arrive at a settlement on the terms given in the settlement agreement, albeit, prior to its execution. The fact that Interbulk did not respond to the three (3) e-mails sent by Adam Coal, would not, to my mind, constitute acquiescence, as silence, by itself, cannot be equated with acceptance, unless, there is a corresponding obligation to speak. (See Union Of India v. Watkins Mayor & Co., AIR 1966 SC 275 at page No. 278, Paragraph 7).
111. Furthermore, also see observations in Abdul Kader Chaudhury v. Upendra Lal Barua, AIR 1936 Cal 711. The relevant part of the judgment is extracted hereafter, for the sake of convenience:
“6. …. The doctrine of acquiescence has gone by different names - the doctrine of standing by-but all the elements must be there. If an owner finds another person trespassing upon his land and building upon his land, mere silence of inaction on his part at the time of the building operations is not sufficient to support a case of acquiescence. He need not prevent the act at the time when it was begun. He need not say to the other side to stop. Mere silence, mere inaction cannot be construed to be a representation. In order to support a case of acquiescence there must be something more than mere silence or inaction. Inaction or silence in circumstances which require a duty to speak is the foundation of the doctrine. When inaction or silence would amount to fraud or deception then and then only would the doctrine of standing by or acquiescence be applied. This is the position which is made quite clear in the judgment of Sir Asutosh Mookerji in Joy Chandra Bandopadhaya v. Srinath Chattopadhaya, (1905) 32 Cal 357. The passage is at p.27 and runs as follows:
“It cannot be doubted that there may be cases in which there is deception by omission, but silence may be treated as deception only when there is a duty to speak; in other workds, as Bigelow points out, ‘a duty to speak, which is the ground of liability, arises wherever and only where silence can be considered as having an active property, that is misleading’.”
(emphasis is mine)
112. Therefore, this submission of Mr. Krishnan has no merit and is, accordingly, rejected.
113. The circumstances which obtain in the present case, do not suggest that Interbulk had an obligation to speak or respond. Mere silence, in the given circumstances, cannot constitute acquiescence.
114. As to whether the Arbitrator was right or wrong in his conclusion, is not a matter, for this Court to examine, because, quite clearly, it comes within the principle of a “plausible view”. There is, as noticed by the learned Arbitrator, some weight in the testimony of the expert witnesses, cited on behalf of the Interbulk, that the income tax received by it was covered by the DTAA and, therefore, was amenable to tax in Switzerland. The learned Arbitrator, in my opinion, quite correctly, concluded that this issue ought to have been flagged by Adam Coal, when, the settlement was drawn up. There is, as noted by the learned Arbitrator, no ambiguity with regard to the amount, which, quiet clearly, Adam Coal was required to pay, that is, a sum equivalent to USD 337,500.
115. To my mind, there can be no doubt that insofar as Interbulk was concerned, it had clearly envisaged a situation, at the time, when the settlement agreement was executed, that it would receive the entire sum equivalent to USD 337,500. Thus, if, Adam Coal had another view in the matter, it should have made a provision for the same. The difficulty, with which, Adam Coal was confronted with, after it had signed the agreement, was not, I suspect, with regard to the mere payment of USD 67500 towards withholding tax, but was qua the possibility of it having to bear the enhanced tax liability depending on whether or not it chose to remit the payment to Interbulk net off taxes. As noticed by the learned Arbitrator, one of the expert witnesses, i.e, Mr. Bhaskar, cited by Adam Coal, crystalised this dilemma of Adam Coal, quite lucidly in his deposition. For the sake of convenience, that part of the testimony of Mr. Bhaskar is extracted herein below:
“…. If Respondents had paid USD 337,500.00 to the Claimants account and paid USD 67,500.00 to the Income Tax Authorities then it will be treated as a payment of USD405,000.00 as the Settlement Sum paid to the Claimants. Then the Respondents will be held as “assessee in default” as they failed to pay 20% of withholding tax on the sum of USD405,000.00 which would be USD81,000.00 and Respondents will be held liable for paying only SUS67,500.00 of the USD81,000.00. Moreover under Section 195A of the Indian Income Tax Act (Tab K), if the taxes are borne by the payer, the amount on which tax is to be deducted shall be increased by such taxes. ….”
116. Therefore, as would clear from the aforesaid, the issue which troubled Adam Coal was not whether the transaction was, at all, chargeable to tax in India - but had more to do with preventing a situation, whereby, its financial outgo could exceed USD 3,37,500.
117. Mr. Krishnan's argument that Section 195A of the Income Tax Act would get kicked-in, only, if, there was an agreement or arrangement qua grossing up, and, since, there was no such agreement or arrangement, grossing up had not to be carried out, is misconceived for the reason that it is an enabling provision, which allows the parties to decide by an agreement or a mutual arrangement as to whether or not the payer has to bear the burden of tax chargeable on the income. Clearly, as also held by the learned Arbitrator, there was no such explicit agreement or arrangement arrived at between the parties. If, that be so, what then, logically follows is that, Adam Coal, could not have unilaterally varied the terms of a written contract by taking recourse to the provisions of Section 195 of the Income Tax Act.
118. The learned Arbitrator, in my view, quite correctly, analysed the testimony of Mr. Bhaskar (Adam Coal's witness), when, he noted that the said expert witness conceded that, if, the transaction had gone through, then, no income tax would have been payable in India, since it was a business income, and, because the transaction had not gone through and disputes had arisen, which were resolved by having Adam Coal to pay compensation to the Interbulk, tax would have to be withheld on the said remittance. Quite clearly, if this analysis of Mr. Bhaskar on the state of the law is decoded, his conclusion that no withholding tax was payable, if, the transaction had gone through, was based on the fact that Interbulk had no business connection with India.
119. Concededly, absence of business connection would mean the absence of a permanent establishment in the context of DTAA. Therefore, the Arbitrator, in my opinion, came to, what, in the very least, can be said to be, a plausible view, which is, that no tax was payable in India, on the remittance envisaged under the settlement agreement.
120. In my opinion, this also answers the argument advanced by Mr. Krishnan, with regard to the failure of the learned Arbitrator to have Interbulk discharge the burden of proving that, it did not have a permanent establishment in India, in order to sustain its stand that the remittance envisaged under the settlement agreement would not be exigible to withholding tax in India.
121. In my view, none of the grounds articulated by Mr. Krishnan to assail the enforcement of the impugned awards is attracted in the instant case.
122. The Arbitrator has not, to my mind, ignored any relevant material or taken into account extraneous material or fact, as alleged or at all. Therefore, the challenge to the award dated 14.01.2013, is, clearly, not sustainable.
123. Insofar as the second award is concerned, which is dated 12.04.2013, the said award, as indicated at the outset, is a supplementary award, which is confined to costs.
124. A perusal of the supplementary award, i.e, 12.04.2013, would show that despite the proposal given by Interbulk to reach an amicable settlement, Adam Coal chose not to settle the matter.
125. As a matter of fact, the record and the aforesaid narration distinctly demonstrates that, at each stage, Adam Coal has been in breach of its obligations. The breach began with non-fulfillment of obligations by Adam Coal under the main contract. This conduct of Adam Coal continued with its failure to comply with the settlement arrived at between the parties in January 2011, despite time being given by Interbulk to fulfill the terms of the settlement vide its communication dated 23.03.2011 The breach of the so-called final settlement agreement dated 21.09.2011, appeared to be, for Interbulk, a proverbial final straw on the camel's back.
126. Therefore, on all counts, I am of the view that no interference is called for in respect of the impugned awards. Consequently, the objections raised by Adam Coal are rejected.
127. A logical corollary of the aforesaid would be that the captioned petitions would have to be allowed. It is ordered accordingly.
128. However, the parties are left to bear their own costs.