Safiya Malik

The High Court at Calcutta, Single Bench of Justice Shampa Sarkar held that a single application under Section 34 of the Arbitration and Conciliation Act, 1996, challenging a composite arbitral award covering multiple references, is legally maintainable. The Court stated that the arbitral award in question constituted a single adjudication of multiple disputes and directed that court fees be assessed claim-wise. Additionally, the Court granted a conditional stay of the arbitral award under Section 36(2), requiring the petitioner, Damodar Valley Corporation (DVC), to deposit Rs. 3.68 crore with the Registrar, Original Side, within ten weeks.

The dispute arose from five separate coal-handling service contracts awarded by Damodar Valley Corporation (DVC) to AKA Logistics Private Limited (AKA) for liaison, loading, supervision, and unloading of coal rakes at various thermal power stations. Each contract contained an arbitration clause. Disputes later emerged regarding two issues: reimbursement of 50% of the difference in statutory minimum wages paid by AKA to its workers after government-mandated revisions, and recovery by DVC of punitive overloading (POL) charges, including base freight, from AKA’s running account bills.

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Following failure to resolve these issues, AKA invoked arbitration under each contract. A sole arbitrator was appointed in each reference. By consent of both parties, the matters were heard together, treating one of the references as the lead matter. Evidence was led in a consolidated manner. AKA produced one witness and filed separate affidavits of evidence for each reference. DVC presented five witnesses through separate affidavits, which were cross-examined. The arbitral tribunal recorded that the facts and legal issues were largely common, except for the POL charge claim which related to one contract.

On 24 April 2024, the arbitrator delivered what was described as a composite award covering all five references, specifying the sums awarded to AKA in each and granting interest at 9% per annum on the total amount from 31 January 2020 until payment. Certain typographical errors were corrected by order dated 9 May 2024.

DVC challenged the award through a single petition under Section 34 of the Arbitration and Conciliation Act, 1996, and sought an unconditional stay of its enforcement under Section 36(2) of the Act. DVC contended that the matters had effectively been consolidated and that a single composite award was passed. AKA opposed the petition, asserting that five separate awards had been issued and separate challenges were required. The Court examined the arbitral proceedings, parties’ submissions, and the form of the award to determine the maintainability of the single petition and the conditions for stay of enforcement

Justice Shampa Sarkar examined the arbitral record and observed that, although there were five original contracts and references, “the learned arbitrator, as also the parties understood that the issues involved would be dealt with in a composite manner.” The Court noted that the arbitrator recorded in the minutes dated June 28, 2022, that both parties suggested analogous hearing of all five matters as identical questions of fact and law were involved. It was further recorded that on July 26, 2022, “by consent of parties, all the five matters would be taken up together and AP No. 353 of 2021 would be treated as the lead matter.” Evidence and arguments were advanced jointly.

The Court observed: “The aforesaid arbitration proceeding have been initiated by the claimant in connection with several contracts awarded by the respondent.” The arbitrator summarized the claims, issues, and facts collectively, recording that “the brief facts, common in all proceedings are…” and rendered a single set of findings applicable to all five references. Paragraph 74 of the award contained the quantified reliefs for each contract but was issued as part of one comprehensive award. The Court noted that, although five stamped copies were issued, they all bore the combined case number and were identical in content.

Referring to State of Orissa v. Damodar Das (AIR 1996 SC 942), the Court held that where several disputes are decided by a single award, it retains the character of a single award for purposes of challenge. It stated, “The determining factor is not the number of references, but the form and nature of the award made and published by the learned arbitrator.” The Court rejected the respondent’s contention that the CPC analogy applied, clarifying that an arbitral award is not equivalent to a decree and that Section 96 of the CPC, which requires separate appeals from separate decrees, cannot be imported into arbitral proceedings. It observed, “An arbitral award, on the other hand, is governed by the Arbitration and Conciliation Act, 1996. Section 34 provides that recourse to a court against ‘an’ arbitral award may be made only by ‘an’ application.”

Justice Sarkar concluded that a single composite award cannot be fragmented for procedural technicality: “To insist on multiple petitions will be a hypertechnical approach, which will defeat the object of speedy and efficacious adjudication under the Arbitration and Conciliation Act, 1996.” The Court held that since all five disputes were adjudicated by a common award, one consolidated challenge under Section 34 was maintainable.

The Court held that both AP-COM 821 of 2024 and AP-COM 166 of 2025 were maintainable. It directed that “necessary court fees as may be assessed by the department, shall be deposited in both the applications, if found inadequate upon considering the claims in each of the five references.” The Registrar, Original Side, was instructed to assess the requisite court fees within one week after the Puja vacation, and the petitioner was granted two weeks thereafter to pay any deficit.

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The Court further ordered “unconditional stay of the award for a period of 10 (ten) weeks” subject to the deposit by DVC of Rs. 3.68 crore with the Registrar, Original Side, by way of demand draft. It directed that the amount be encashed and kept in an interest-bearing auto-renewable fixed deposit with a nationalized bank until further orders. Upon such deposit, “the order of stay of enforcement of the award shall continue till disposal of the application under Section 34 of the Arbitration and Conciliation Act.”

However, the Court rejected DVC’s plea for unconditional stay, noting that the award was not shown to be induced by fraud or corruption. Referring to the proviso to Section 36(3), it observed, “Unconditional stay of an arbitral award is a very narrow exception to the general rule that, when an award is for a money decree, stay can only be granted when the sum awarded is secured.” The Court stated that “the petitioner failed to prove that the making of the award was induced by fraud or corruption.” It concluded, “Prayer (a) for unconditional stay of the award in AP-COM 166 of 2025 is denied and AP-COM 166 of 2025 is accordingly disposed of.”

The Court directed the respondent to file its affidavit-in-opposition to AP-COM 821 of 2024 within two weeks after the vacation, with the petitioner’s reply due two weeks thereafter. The matter was ordered to be listed after completion of pleadings.

Advocates Representing the Parties:
For the Petitioner: Mr. Amitesh Banerjee, Senior Advocate; Mr. Swarajit Dey, Advocate; Mr. Saptarshi Kar, Advocate; Ms. Debarati Das, Advocate.
For the Respondent: Mr. Ratnanko Banerji, Senior Advocate; Mr. Rajashi Datta, Advocate; Mr. Shounak Mukhopadhyay, Advocate; Mr. Neelash Choudhury, Advocate; Ms. Anuradha Poddar, Advocate.

Case Title: Damodar Valley Corporation v. AKA Logistics Private Limited
Case Number: AP-COM 166 of 2025 with AP-COM 821 of 2024
Bench: Justice Shampa Sarkar