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ABHAY S. OKA, UJJAL BHUYAN
Somdatt Builders –NCC – NEC(JV) – Appellant
Versus
National Highways Authority Of India – Respondent
Question 1? Question 2? Question 3?
Key Points: - The correct interpretation and application of Clauses 51 and 52 of the GCC read with COPA, governing variations, instructions, and rate fixation, are central to the dispute and its resolution. (!) (!) (!) (!) (!) (!) - The Arbitral Tribunal and DRB held that the increased quantity of geogrid did not constitute a variation and that the Engineer had no power to renegotiate rates; this view was upheld by the Single Judge under Section 34, and reversed by the Division Bench under Section 37, leading to a final reversal by the Supreme Court restoring the arbitral award. (!) (!) (!) (!) (!) (!) (!) - The Supreme Court reaffirmed that courts exercising jurisdiction under Section 34 should not reweigh evidence and should intervene only on grounds of public policy, patent illegality, or shock to conscience, with the decision that a plausible view by the arbitrator should be preserved. (!) (!) (!) (!) (!) (!) - Variation in quantity that is not instructed by the Engineer may still be treated as a variation under Clause 51, but relief depends on whether it falls within the 2%/25% thresholds and whether the rate is to be renegotiated per Clause 52.2 and COPA provisos. (!) (!) (!) (!) (!) (!) (!) - The Division Bench’s interpretation that automatic quantity increase requires renegotiation of rates was found to be erroneous; the Court held that the DRB/Arbitral Tribunal’s view was plausible and correct. (!) (!) (!) (!) - The final decision restores the arbitral award dated 03.06.2005 and allows the appeal, with no cost awarded. (!) (!)
JUDGMENT :
UJJAL BHUYAN, J.
Heard learned counsel for the parties.
2. This civil appeal by special leave is directed against the judgment and order dated 17.11.2009 passed by the High Court of Delhi at New Delhi (‘High Court’) in FAO(OS) No. 427 of 2007 [National Highways Authority of India Vs. Som Datt Builders-NCC- NEC(JV)].
2.1. By the aforesaid judgment, the High Court allowed the appeal of the respondent-National Highways Authority of India (‘respondent’ or ‘NHAI’ hereinafter) under Section 37 of the Arbitration and Conciliation Act, 1996 (briefly ‘the 1996 Act’ hereinafter). It may be mentioned that respondent had challenged, by way of the aforesaid appeal, the judgment and order of the learned Single Judge in OMP No. 316/2005 dated 29.08.2007 whereby the learned Single Judge dismissed the application filed by NHAI under Section 34 of the 1996 Act for setting aside the award dated 03.06.2005 passed by the Arbitral Tribunal.
3. The matter relates to execution of a contract awarded by NHAI to the appellant regarding the work of four laning and strengthening of the existing two lane section between Km. 470.000 and Km. 38.000 on NH-2 (construction package II-B) near Kanpur in the Stat
(1) Appeal against arbitral award – Arbitral award may not be interfered with if view taken by Arbitrator is a possible view based on facts – Court cannot undertake independent assessment of merits o....
Project – Fixation of rate - Once a rate has been found to be inappropriate or inapplicable on account of variation in the quantity beyond the stipulated limit, then the new rate would be applicable ....
An arbitrator may revise contract rates if the original rates become inappropriate due to variations in the quantity of work executed, as per applicable contractual clauses.
Appeal against arbitral award – Scope of jurisdiction under Section 34 and Section 37 of Act is not akin to normal appellate jurisdiction – Mere possibility of an alternative view on facts or interpr....
Point of law: Arbitral Tribunal is not bound by the Code of Civil Procedure or the Indian Evidence Act.
The court confirmed the validity of the Arbitrator's findings regarding excess work claims and the correct application of interest, highlighting that overlapping interest claims were erroneous.
In international commercial arbitration, challenges to awards are limited to specific legal grounds, and mere dissatisfaction with arbitral decisions does not constitute public policy violations.
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