Arbitrator's award in tech deal modified

LEGAL DIGEST

The Supreme Court has modified the final award by the arbitrator in a dispute between Mcdermott International Inc and Burn Standard Co Ltd over contracts regarding oil exploration and construction at Bombay High.

The two companies signed an agreement under which the foreign company agreed to transfer technology regarding design, construction and operation to the Indian firm.

The agreement had an arbitration clause. When disputes arose, the Calcutta High Court appointed former chief justice of India RS Pathak as the sole arbitrator under the old Arbitration Act, 1940. He gave a partial award, an additional award and a final award.

These were challenged in the Supreme Court, where questions were raised over the power of the arbitrator to do so as well as the procedure.

The judgment examined the terms of the agreement apart from the applicability of the new Arbitration and Conciliation Act, 1996, and modified the terms of the award in certain respects. The interest payable on the amounts of settlement was reduced from 10 per cent to 7.5 per cent.

Bengal govt told to protect mill

The Supreme Court has asked the West Bengal government and the state police to provide protection to Howrah Mills Co Ltd for disposing of its property under a revival scheme of the Board for Industrial and Financial Reconstruction (BIFR). Part of the property was to be sold under the scheme.

The company complained that efforts were being made to interfere with its possession of the property and the authorities were not rendering help. The Calcutta High Court granted interim protection. However, on an appeal by a few assignees of a fraction shareholder, a Division Bench of the high court reversed the order.

The company appealed to the Supreme Court. Allowing the appeal, the Supreme Court observed, "This is a case where the state should be equally interested in seeing to it that the property is fully protected, until the scheme proposed by BIFR is implemented and the revival of the industry is ensured."

It said the state government should have readily extended help to the company at public expense.

Hotel told to pay workers

The Supreme Court has set aside a judgment of the Allahabad High Court and upheld the action of the labour commissioner against Gulmarg Hotel under the Uttar Pradesh Industrial Peace (Timely Payment of Wages) Act.

According to the Act, if payment arrears are less than Rs 50,000, action cannot not be taken against the establishment. In this case, the company reduced the arrears below this limit and contended before the high court that the law did not apply. The high court held that the action was not maintainable.

On appeal by the Hotel and Restaurant Karamchari Sangh, the Supreme Court restored the labour commissioner's order and observed that otherwise, "a crafty and unscrupulous employer can defeat the legislative intent".

The law was a beneficial one intended to help the workers who were not being paid wages. The high court completely lost sight of the relevant factors, the Supreme Court said.