The tribunal's determination to waive notice requirements undermines contractual obligations and violates natural justice, leading to an unequal treatment of parties, thus warranting the award's annulment under Sections 34 and 37 of the Arbitration Act.

JUDGMENT :

AUGUSTINE GEORGE MASIH, J.

1. Leave granted.

2. The instant Civil Appeal, arising from Special Leave Petition (Civil) No. 2706 of 2024, assails the Judgment dated 27.09.2023 in ARBA (ICA) No. 1 of 2023 (hereinafter, “Impugned Judgment”) by Division Bench of the High Court of Orissa (hereinafter, “High Court”) moved under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter “1996 Act”) read with Section 13 of the COMMERCIAL COURTS ACT , 2015 by the sole Respondent herein, being, GMR Kamalanga Energy Limited (hereinafter “GMRKE Limited”).

3. Vide the Impugned Judgment, the appeal was allowed to the effect that Judgment dated 17.06.2022 in ARBP (ICA) No. 1 of 2021 as passed by the Single Judge of the High Court under Section 34 of the 1996 Act (hereinafter “ Section 34 Judgment”) was set aside along with the Award dated 07.09.2020 (as corrected on 17.11.2020) (hereinafter “Arbitral Award”), both of which were rendered in favour of the sole Petitioner herein being SEPCO Electric Power Construction Corporation (hereinafter, “SEPCO”). This was done through framing of the following issues by the Division Bench of the High Court:

“(A) Whether the Tribunal interpreted the contractual provisions correctly in assessing that issuance of contractual notices is a condition precedent? If so, then can the condition of issuance of notice be waived and whether a party can claim estoppel consequent thereto?

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(B) Whether the Tribunal based its analysis and findings on mistaken facts?

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(C) Whether the Tribunal’s interpretation of the contractual provisions shocks the conscience of the Court?

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(D) Whether the Ld. Single Judge was correct in dismissing the Section 34 petition at the stage of admission without considering all the arguments made by the parties?

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(E) In light of the above whether the orders of the Ld. Single Judge and the Ld. Arbitral Tribunal have ‘shocked the conscience of this Court’, or ‘are contrary to the basic notions of justice’, or ‘are in express violation of Section 28 (3) of the A&C Act’ which necessitates interference by this Court under Section 37 of the A&C Act?”

4. The factual matrix, as presented before us by SEPCO is that it was an Engineering, Procurement, and Construction (hereinafter “EPC”) Contractor which entered into numerous agreements with GMRKE Limited with the objective of construction of three 350 Mega Watt coal-fired thermal power plants at the village of Kamalanga in District Dhenkanal of state of Odisha (hereinafter collectively, “Project” and individually, “Unit 1”, “Unit 2” and “Unit 3”) on behalf of the latter and its operations thereof. The details of the aforesaid agreements are as follows:

(a) Agreement for Civil Works and Engineering, Erection, Testing and Commissioning dated 28.08.2008, bearing Contract No. GMR-SEPCO-03 (hereinafter, “CWEETC Agreement”)

(b) Guarantee and Co-ordination Agreement dated 28.08.2008 (hereinafter, “GCA”)

(c) Onshore Supply Agreement dated 28.08.2008, bearing Contract No. GMR-SEPCO-02 (hereinafter, “Onshore Supply Agreement”)

(d) Offshore Supply Agreement dated 28.08.2008, bearing Contract No. GMR-SEPCO-01 (hereinafter “Offshore Supply Agreement”) (hereinafter collectively, “EPC Agreements”)

5. A fourth 350 Mega Watt equivalent plant (hereinafter “Unit 4”) was proposed and also included as part of the aforesaid agreements through amendments dated