Being aggrieved, the appellant BPCL has filed this appeal.
The appellant averred that the respondent had demanded CENVAT invoices from the appellant for the supplies made from the year 2005 onwards for the first time by its letter only on 05.05.2010 i.e. after the companymencement of the present arbitration.
Sujatha Manohar as the sole Arbitrator.
Initially, the agreement was entered into for the period from 01.01.2007 to 31.03.2009.
In reply to the said letter, the respondent by its e mail dated 06.07.2009 stated inter alia that the outstanding interest was Rs.1.41 crores and number Rs.1.45 crores as mentioned in the said letter dated 06.07.2009.
Brief facts which led to filing of this appeal are as under An Agreement for Aviation Fuel Supply dated 01.01.2007 was Signature Not Verified Digitally signed by MAHABIR SINGH Date 2019.10.23 entered into between the parties under which the appellant Bharat 173714 IST Reason Petroleum Corporation Limited BPCL was to supply and sale of Aviation fuel to the respondent Go Airlines India Limited.
The learned Arbitrator vide order dated 18.04.2011 allowed the application filed by the appellant under Section 16 of the Act inter alia holding that the companynter claim relating to CENVAT invoices is beyond the scope and jurisdiction of the Arbitrator and rejected that part of the companynter claim.
As the payments were number made, the appellant BPCL put the respondent Airlines on Cash and Carry terms on account of default in making payment for supply of fuel and interest on delayed payment.
It was stated that there was numberdispute existing between the parties in respect of the alleged obligation to supply CENVAT invoices prior to companymencement of the arbitration as it was never asked for by the respondent Go Airlines.
The respondent filed its reply to the said application filed under Section 16 of the Act inter alia stating that the companynter claim filed by the respondent was well within the scope and jurisdiction of the Arbitrator.
The appellant also filed an application under Section 16 of the Arbitration and Conciliation Act, 1996 inter alia submitting that the companynter claim filed by the respondent was beyond the scope and jurisdiction of the Arbitrator and that the respondent demanded the CENVAT invoices from the appellant for the supplies made from the year 2005 onwards for the first time only by letter dated 05.05.2010 i.e. after the companymencement of the arbitration.
The appellant averred that the respondent never asked for CENVAT invoices during the subsistence of the said agreement and that the companynter claim raised by the respondent was an afterthought.
The appellant raised a claim for an aggregate sum of Rs.1,95,21,032/ with interest at the rate of 18 per annum from the date of presentation of the said claim till payment and or realization.
Dispute arose between the parties when the appellant raised a claim for interest for the delayed payments of the fuel supplied during the period from 01.04.2009 to 31.03.2011.
The respondent did number accept any amount payable towards interest.
The High Court however held that the rejection of the companynter claim at the threshold, was number justified in view of the arbitration agreement between the parties.
On 06.07.2009, the appellant issued letter to the respondent along with the statement giving details of invoices and requesting inter alia that the payment of outstanding dues as well as the interest amount of Rs.1.45 crores be released immediately.
By virtue of the second agreement dated 01.04.2009, another Aviation Fuel Supply Agreement was entered into between the appellant and the respondent for the period from 01.04.2009 to 31.03.2011.
In the said letter, respondent stated that they are sure that the learned Arbitrator would be able to adjudicate the issues appropriately companysidering the respondents various claims against appellant BPCL.
The appellant filed its reply to the respondents companynter claim denying the claim of the respondent and inter alia stated that the companynter claim filed by the respondent was beyond the scope and jurisdiction of the Arbitrator.
In its second claim, the respondent demanded damages for alleged imposition of Cash and Credit terms by the appellant with effect from 04.07.2009 when the appellant refused to supply the Aviation fuel to the respondent except on Cash and Credit terms.
The respondent vide its letter dated 27.04.2010 agreed to the dispute being referred for arbitration and accepted Mrs. Justice Retd.
This appeal arises out of the judgment dated 07.12.2011 passed by the High Court of Bombay in Arbitration Appeal Lodging No.14228 of 2011 in and by which the High Court allowed the appeal filed by the respondent Go Airlines by holding that the Arbitrator has the jurisdiction to companysider the companynter claim relating to CENVAT credit thereby setting aside the order passed by the Arbitrator.
Since the dispute in respect of the liability and payment of interest on delayed payment companyld number be resolved through mutual companyrespondence between the parties, the appellant vide its numberice dated 25.03.2010 invoked arbitration clause i.e. Clause No.12 of the agreement dated 01.01.2007 suggesting the name of Mrs. Justice Retd.
BANUMATHI, J. Leave granted.
The respondent filed its statement of defence denying the claims made by the appellant and it also raised two companynter claims before the Arbitrator seeking an award directing the appellant to issue CENVAT invoices in favour of the respondent in respect of the Aviation fuel supplied under the agreement in the alternative prayed for an award for a sum of Rs.11,60,44,466/ plus Rs.4,31,45,967/ being interest, as well as further interest on the principal amount companyputed at the rate of 15 per annum with effect from 01.10.2009 till payment.
The High Court vide impugned judgment dated 07.02.2011 allowed the appeal preferred by the respondent and set aside the order of the Arbitrator dated 18.04.2011 by holding that the Arbitrator has jurisdiction to entertain the companynter claim filed by the respondent relating to number furnishing of invoices for CENVAT credit.
Sujatha Manohar as the Arbitrator.
