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As per case facts, the Petitioner and a foreign collaborator signed an MOJP, and subsequently, the Petitioner and Respondent entered into an MOU where the Respondent was appointed as an
...exclusive consultant for a Joint Venture Agreement (JVA). The Respondent's remuneration was commission-based, with an initial installment paid. However, the JVA was not signed, and the MOJP was terminated. The Petitioner sought a refund of the paid installment in arbitration, while the Respondent counter-claimed for subsequent installments. The arbitrator denied the refund and allowed the counter-claims. The Petitioner challenged this award under Section 34, arguing it contradicted the MOU's terms regarding refundability upon non-conclusion of the JVA and lacked reasoning for allowing the counter-claims. The question arose whether the arbitral award, by ignoring express contractual clauses and allowing claims without proper basis, was vitiated by patent illegality and perversity. Finally, the High Court set aside the arbitral award, concluding that the arbitrator failed to consider relevant MOU clauses mandating refundability in case of JVA non-conclusion or project non-commencement. The court found the award suffered from patent illegality, being contrary to the contract's express terms and lacking adequate reasoning for the counter-claims.
Bench
Applied Acts & Sections
Section 28
–The Arbitration And Conciliation Act, 1996
Section 31
–The Arbitration And Conciliation Act, 1996
Section 34
–The Arbitration And Conciliation Act, 1996
Legal Notes
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