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2017 (9) TMI 1984 - HC - Indian LawsLiability for demanded/ defaulted cash calls - Raising of dispute between the parties in terms of JOA for arbitration - entitlement to a sum from the Respondent as outstanding amount of cash calls made in terms of Joint Operating Agreement (JOA) where under the respondent was having 11.11% share - interest as per the rate contained in the agreement between parties for a period of default up to date of claim - interest from date of claim till the date of Award and for Post Award Period - mechanism as provided in clause 7.6 of JOA followed or not - HELD THAT:- It is quite clear that the interpretation which is sought to be made by the petitioner of the stated terms of the JOA is entirely baseless. If such an interpretation was accepted, it would tantamount to rewarding a party guilty of default. The interpretation urged by the petitioner would lead to absurd results. The moment it becomes apparent that no oil or gas is going to be discovered, the participants can default on the call money leaving only the operator to fund for the entire operation. The Award rightly relies upon clause 7.6.5 to hold that a defaulting party remains liable and obligated for its participating interest especially for costs and obligations. The petitioner is essentially trying to challenge the interpretation of the JOA made by the learned Arbitrator. The interpretation of the learned Arbitrator of the said clauses of the JOA are a plausible interpretation and cannot said to be in any manner illegal or suffering from any illegality. It is settled legal position that interpretation of a contract is within the domain of an Arbitrator. The court shall not ordinarily substitute its interpretation of the terms of the contract with the interpretation of the arbitrator. A perusal of the Award would show that the learned Arbitrator has noted that under Article 4.9.1 of the JOA any loss of damages suffered in connection with the conduct of the operations except in the case of gross negligence or wilful conduct will not render any liability on the operator. The Award notes that the only negligence alleged on behalf of the operator was seeking extension of time from the government for completion of Minimum Work Programme in respect of Phase-I of the Programme. It notes that the extension of time was obtained by the operator with the consent of the operating committee of which the respondent was a member. It is also noted that this issue has been raised for the first time in arbitration proceedings - the petitioner has not been able to show how this finding of fact is untenable or illegal. It is settled legal position that findings of fact recorded by the learned Arbitrator have finality. Petition dismissed.
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