By this petition, under Section 34 of the Arbitration and Conciliation Act, 1996 (for short, the Arbitration Act) a challenge is made to the Award dated 31 May 2007, passed by the Arbitral Tribunal in favour of the Respondent (the Contractor) against the Petitioner (Western Railway, Mumbai).

BASJC FACTS:

2. To the tender, as invited by the Petitioner on behalf of the President of India, for sole advertising rights of Borivali Station for one year, the Respondent's bid was accepted on 15 December 2003. The terms and conditions reflected in form No.3 of the tender document.

3. The basic conditions of the tender notice were as under:-

"1. The licensee shall admit/show the plan/text/design of all the advertisements to be displayed at BORIVALI Railway Station, to the Sr. Divisional Commercial Manager and obtain his prior approval for all such displays. (Condition 2 of Special Conditions, page 9 of Tender document).

2. This contract is entered into on the express understanding that if for any reasons/cause, the Railway administration is unable to provide the space to exhibit either in full or in part for the full terms of the contract, the Railway administration will allow from the display charges, a proportionate refund of the unexpired period of the contract and no other claim on account of such non-exhibition shall be made or be maintained by the licensee against the Railway Administration. (Condition 20 of Special Conditions, page 12 of Tender document).

3. Until a formal agreement is prepared and executed, acceptance of this tender shall constitute a binding contract between us subject to modification as may be mutually agreed to between Railway Administration and Licensee in terms of the form of agreement attached herewith and indicated in the letter of acceptance of my/our offer for this work. (Condition "C" of Form-III page 20 of Tender Document).

4. Admittedly, no formal document/contract was executed, but the parties pursuant to the acceptance letter had acted upon and proceeded.

5. The Respondent inspected the site of work on 26 December 2003 in pursuance to the letter of acceptance. The area of the display at site was less for Show Case, Wall paint and Glow Sign media, therefore, objected vide its letters dated 31 January 2004 and 25 February 2004. Therefore, requested for alternate site and/or reduction in the licence fee. The Petitioner vide letter dated 10 February 2004, admitted the less area of display. The Respondent replied and again reiterated about the non-availability of site and reduction of licence fee, which was rejected by the Petitioner vide letter dated 12 March 2004.

6. The parties, treated the letter of acceptance as a deemed contract agreement, till the execution of the formal contract. The Respondent made the payment of first installment of Rs. 8 lacs, towards the licence fee, which was admittedly received by the Petitioner.

7. In view of the Arbitration clause as dispute arose between the parties, the matter was referred to the Arbitral Tribunal. The parties had filed their written pleadings supported by the documents. No evidence was led by both the parties. The sole arbitrator gave them all the opportunities and based upon the oral submissions, has passed the Award.

8. The Respondent made seven claims. The Arbitral Tribunal, after considering the material available on record, has granted four claims in favour of the Respondent, totaling of Rs. 14,20,860/- with a simple interest of 12% from the date of award till the actual date of payment. The counter claims of the Petitioner have been rejected.

9. The preliminary objection, that there exists no contract between the parties, as no formal written contract executed, has no substance in the present facts and circumstances of the case. The Arbitrator has dealt with the said aspect by referring to the contract condition (C) of form - III of the tender document and held that there was a deemed contract agreement between the parties. The Respondent admittedly