Case name: HINDUSTAN HYDRAULICS PVT. LTD. V. UNION OF INDIA
Neutral Citation: 2025:DHC:4927
Hon’ble Delhi High Court’s Bench: Justice Manoj Kumar Ohri
Date: 09.06.2025
The petition was filed before the Hon’ble High Court to set aside the impugned award dated 05.09.2016 passed by the Arbitral Tribunal consisting of a Sole Arbitrator. The Petitioner and the Respondent entered into a contract for a Double Column Guillotine Shearing Machine with Hydraulic Main Drive. The offer to sell was sent on 27.03.2004, and acceptance was given by the Respondent on 07.06.2005. The terms and conditions were accepted by the petitioner on 21.06.2005, and the machine was to be delivered on 21.04.2006. However, the machine was delivered on 28.07.2008, after a delay of three years and one month by the petitioner. However, the Respondent rejected the machine on 25.04.2011 due to the quality issues.
The Respondent sought a refund of the part sale consideration of Rs. 1,14,63,340 paid to the petitioner along with the interest. The Arbitration Clause was invoked by Respondent and the award was passed in the favor of the Respondent.
The Hon’ble High Court noted that the machine was not rejected immediately upon discovering the basic design deviation identified in RCF’s initial deficiency list, and the deviation was repeatedly highlighted, expecting the petitioner to rectify the same. The Hon’ble Court further held it observed that the rejection was not delayed since it is mentioned in Clause 2102 of the Contract, which is referred to as AT in the Award and in the Petition that delivery date shall be interpreted as the date of successful commissioning and at no point of time, the Respondent waived its right to object to the design deviations or accepted the same.
The Hon’ble Court observed that the award may be inarticulate and contain minor factual errors or overlooked evidence. However, all such anomalies did not affect the core reasoning of the tribunal, that is, the petitioner’s own admission as to deviations. Therefore, the petitioner cannot take advantage of such apparent inconsequential errors, and therefore, they cannot be a ground to set aside the arbitral award1.
