PROCEDURAL HISTORY OF THE CASE

In this case, ONGC ordered pipes from SAW Pipes Ltd. on certain terms and conditions and for
dispute resolution it also had an arbitration clause. Disputes arose as SAW Pipes was unable to
conform to the time schedule prescribed for supplies due to the strike of the workers in Europe
for almost two months. SAW Pipes informed these facts to ONGC which in turn replied that
damages as per the contract would have to be paid. SAW Pipes thereafter supplied the pipes and
ONGC deducted a large sum from the bill on account of delay without there being any
adjudication or determination by a third party.

The matter was referred to arbitration and an order was passed in favor of the respondents. The
same was challenged before a single Judge of High Court which dismissed the petition. A further
challenge before a division bench was also negated. Finally, an appeal to the Supreme Court
under Article 136 (Special Leave Petition) came to be heard by two Judges.