Authority: High Court of Judicature at Madras

Order Date: 29-09-2026

Case Overview

  • Parties: Appellant GMMCO Limited (53A, HootaGali, Industrial Area Belvadi, Mysore) vs Respondent Supreme Industries Ltd, represented by Mr. Rajendra Jugalkishore Saboo, AVP (Corporate Affairs) and Company Secretary.
  • Appeal filed under OSA(CAD) No. 40 of 2025 and CMP No. 22834 of 2026, challenging the order dated 31‑01‑2025 (O.P.No.56 of 2020) which upheld an arbitral award dated 30‑09‑2019.
  • Under the contract, GMMCO supplied and commissioned a Caterpillar 500 kW gas genset; post‑commissioning warranty obligations and part replacements were excluded from the supply scope.
  • Respondent alleged inherent manufacturing defects, initiated arbitration, and made nine claims. The arbitral tribunal awarded Rs 1,08,54,024 plus interest at 12% per annum (from claim date 29‑12‑2017) for claims 1 & 2, rejecting claims 3‑9.
  • GMMCO contended lack of a valid arbitration agreement (no clause in the proposal dated 29‑07‑2010, LOI, or Proforma Invoice), limitation bar (claim filed after statutory period expired on 10‑01‑2014), and that the award ignored depreciation and the requirement to allow repair or replacement.
  • Respondent argued that a warranty of 12 months (extended by six months on 05‑03‑2011) justified the timing, and that the arbitration clause existed in the commercial bid dated 26‑07‑2010.
  • The court examined extensive documentary evidence (Ex.C10‑C14, Ex.C21, Ex.C93, etc.) and considered multiple precedents on arbitration jurisdiction, limitation, and restitution.

Final Outcome

  • The Court held that the arbitral tribunal lacked jurisdiction because no valid arbitration agreement existed within the meaning of Section 7 of the Arbitration and Conciliation Act, rendering the award void under Section 34(2)(a)(v).
  • It also accepted that the respondent’s claim was time‑barred, as the limitation period expired on 10‑01‑2014 and arbitration was invoked only on 03‑02‑2014.
  • The Court found the refund award illegal for ignoring depreciation, the duty to mitigate loss, and the principle that a buyer must allow the seller to rectify defects or return the goods.
  • Consequently, the award directing a full refund of Rs 1,08,54,024 was set aside.
  • The matter was remitted to the arbitral tribunal to reconsider the refund issue, granting both parties an opportunity to present evidence on depreciation, mitigation, and appropriate relief.
  • No order as to costs was made.

Topics: Arbitration, Contract Law, Judicial Review