Punjab high court didn’t find interference under Section 37 of the Arbitration and Conciliation Act, 1996.

TITLE: Tej Service Station through Parshotam Dass v Hindustan Petroleum Corporation Limited

Decided On-: May 10, 2023

FAO No. 7439 of 2014

CORAM: Hon’ble Justice Mr. Avneesh Jhingan

INTRODUCTION-  This appeal was filed under Section 37 of the Arbitration and Conciliation Act, 1996. Deals with compensation of oil prices.


The facts are that M/s Tej Service Station received a dealership in 1970 to sell petroleum products in Moga. There were three partners in the company at the time. A new dealership agreement was established between the parties on June 1, 1988, after one of the partners retired. One of the partners, Mr. Ram Tirath, retired from the partnership in 1998, and his son was admitted as a new partner. The Hindustan Petroleum Corporation (abbreviated “H.P.”) was asked for permission to amend the agreement in light of the new partnership deed.

The request was rejected, and the outlet agreement was terminated on June 8, 2001, citing a drop in sales and the appellant’s violation of Clause 47 of the terms and conditions by hiring a third party without the H.P.

The award from the arbitration hearings that were started at the appellant’s request is dated 27.11.2006. The only claim that was accepted was the one requesting compensation for the oil stock that was recovered and recorded on the day that HP took over the outlet. The compensation was to be calculated based on the February 2001 market prices. The settlement and payment were further ordered to be made within 30 days of the award. The appellant’s objections were dismissed on February 27, 2007, leading to the current appeal.


The only complaint made by the appellant’s knowledgeable counsel is that the Arbitrator should have quantified the compensation for the stock that was in the outlet on the day it was taken over. On orders, he asserts that neither an execution nor a request for an explanation of the award under Section 33 of the Act have been made.Expert counsel representing respondents Nos. 1 and 2 defends the contested award.Both parties had access to the quantity of oil and the specifics of the recovered oil stock, and both parties were aware that the oil prices were under control in February 2001. The amount of compensation can be determined during the execution proceedings because the oil prices were under control at that time.

No case is made out for interference under Section 37 of the Act, the appeal is dismissed.

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Written by–  Steffi Desousa

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