( 1 ) THE respondent M/s Continental Construction Ltd. , was awarded a contract for widening and strengthening of four lanes of National Highway 1 from Samalkha to Karnal in the State of Haryana. The contract was allotted in the year 1987 and was required to be completed within 42 months. It appears that certain disputes arose between the respondent and its partner balfour Beatty, who had dropped out of the contract. The respondent alone carried on with the work and furnished a bank guarantee in the sum of Rs 4. 5 crores. Fresh contracts, in place of earlier ones, were entered into between the parties. By a fresh stipulation, the respondent undertook to complete the work by 31-12-1994. That time was subsequently extended from time to time and finally up to 31-3-1996. The respondent, in the meanwhile, approached the appellant for upward revision of the rates in view of the changed circumstances. It appears that the appellant terminated the contract having decided not to revise the rates upwards. The respondent, thereafter, approached a civil court under Section 9 of the Arbitration and Conciliation act, 1996 with twin prayers that the bank guarantee of Rs 4,5 crores given by the res