IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ROSHAN DALVI, J.
M/s. Mascon Multiservices & Consultants Pvt. Ltd. - Petitioner
Vs.
Bharat Oman Refineries Ltd. - Respondent
ARBITRATION PETITION NO.1088 OF 2010
Decided on: 11th AUGUST, 2014
Certainly. Based on the provided legal document, here are the key points summarized with references indicated separately:
Parties and Contract Background: The petitioner entered into an agreement with the respondent to provide services related to obtaining statutory clearances for a refinery project, with disputes referred to arbitration (!) .
Claims and Disputes: The petitioner made multiple claims, which the Arbitrator rejected, citing issues such as bias, insufficient consideration of evidence, and contractual terms (!) (!) .
Interest on Security Deposit: The petitioner claimed interest on the delayed refund of the security deposit. The contract stipulated that no interest was payable on security deposits, and the Arbitrator rejected the claim based on the contractual terms and legal provisions, including the absence of a specific interest demand or notice (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) .
Claims for ROU and ROW Payments: The petitioner sought payments for Right of Use (ROU) and Right of Way (ROW) based on scheduled rates and approvals obtained from authorities. The Arbitrator analyzed the contractual clauses, the interpretation of "per approval," and the actual approvals obtained, ultimately finding that the petitioner did not sufficiently prove the approvals or that the claims fell outside the scope of the contract (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) .
Delay and Liquidated Damages: The Arbitrator considered the delay in work completion, the contractual provisions for liquidated damages, and whether the respondent proved actual loss. The Arbitrator concluded that the delay exceeded the stipulated period and that the respondent was entitled to deduct liquidated damages, with the petitioner failing to prove that no loss was caused (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) .
Entries in Revenue Records and Approvals: The petitioner claimed entitlement for entries in revenue records and approvals for various land and forest clearances. The Arbitrator found that these claims were within the scope of the contract and that the petitioner did not produce sufficient evidence to substantiate additional payments beyond what was already paid, leading to rejection of those claims (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) .
Preparation of Executive Summary: The petitioner’s claim for additional payment for preparing an executive summary was rejected, as the Arbitrator held it was part of the contractual obligations for which the fixed rate had already been paid (!) (!) (!) (!) .
Overheads and Loss of Profits: The petitioner sought damages for overheads and loss of profits due to delays. The Arbitrator found that the petitioner failed to provide sufficient evidence or justification for these claims, and that the delays were attributable to the petitioner’s own shortcomings or lack of proof of loss (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) .
Physical Verification of Crossings and Crossings Claims: The petitioner claimed expenses for physical verification of crossings, but the Arbitrator noted that the claims were not substantiated with evidence or particulars, and that verification was part of the scope of work already included in the contract. The claims were accordingly rejected (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) .
Claims for Afforestation and Land Transfer: The petitioner’s claims for compensation related to afforestation and transfer of land to the Forest Department lacked supporting evidence such as transfer documents and market valuation, leading to rejection (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) .
Interest Claims for Delayed Payments: The petitioner sought interest for delayed payments and retention money. The Arbitrator found that the petitioner did not provide sufficient particulars or notices under applicable statutory provisions, resulting in the rejection of these claims (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) .
Bias and Arbitrator’s Mandate: The petitioner alleged bias and questioned the Arbitrator’s mandate. The Arbitrator dismissed these claims, citing procedural conduct, previous rulings, and the fact that the Arbitrator was a retired officer from the same organization. The Court upheld that the bias claim was frivolous and that the Arbitrator had acted within his jurisdiction (!) (!) (!) (!) .
Reasons and Public Policy: The Arbitrator provided reasons for each rejection, which were supported by the record and contractual clauses. The Court emphasized that reasons need not be elaborate but must be intelligible and based on the record. The Court found the reasons sufficient and not indicative of arbitrariness or perversity (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) .
Overall Order: The Court upheld the rejection of most claims, set aside claims related to payments for approvals and ROW, and dismissed the petition with respect to the remaining claims. The Court recognized that the Arbitrator’s reasoning was supported by the material and contractual provisions, and that procedural and legal challenges were unfounded (!) (!) (!) .
Please let me know if you need further elaboration on any specific point.
1. The parties entered into an agreement on 30.12.1996 under which the petitioner was to provide services for obtaining statutory clearances from various authorities for setting up a Central India Refinery Project by the respondent. The parties agreed to refer the dispute therein to arbitration. The petitioner made 12 separate claims. The learned Arbitrator has rejected each one of the claims under the impugned award dated 5th March, 2010 which has been challenged in this petition under Section 34 of the Arbitration and Conciliation Act, 1996 (the Act) essentially as being vitiated by bias and upon the Arbitrator not having considered the evidence led before him and it being against the terms of the contract and various specified laws. It would be appropriate to deal initially with each of the claims separately and then with the general aspects of law vitiating awards.
CLAIMS
Claim No.1 : Interest on Security Deposit
2. This is for the payment of interest on the delayed refund of the security deposit to the petitioner by the respondent. The security deposit was to be of 10% of the value of the tender and payable at specified times under Clause 3 of Section 3A and Clause 4 of Section 3B of the Special Conditions of Contract which run thus:
3.0 SECURITY DEPOSIT:
3.1 A sum of 10% of the accepted value of the tender shall be deposited by the contractor as security deposit with the Owner. For details refer Item 14 of Conditions of Contract attached. Security Deposit will be released after successful completion of defects liability period of one year after completion of works.
4.0 SECURITY DEPOSIT:
4.1 A sum of 10% of the accepted value of the tender shall be deposited by the person/persons (hereafter called the Contractor) as security deposit with the Owner. For details refer Item 14 of Conditions of Contract attached.
Security Deposit will be released soon after completion of work in all respects as per scope of work and terms and conditions and after payment/passing of final bill by BORL.
3. There is a dichotomy when the security deposit is repayable. Under Clause 3.1 the security deposit had to be released after the successful completion of the defects liability period of one year after the completion of work. The work was completed on 11.08.1999. The petitioner would contend that the security deposit became refundable on 10.08.2000. It was refunded on 10.10.2001. The petitioner claims interest on the wrongful withholding of the security deposit from 11.08.2000 to 10.10.2001, a period of 14 months.
Under Clause 4.1 the security deposit had to be released immediately after the completion of work and after the payment of the final bill. It is argued on behalf of the petitioner that the security deposit is, therefore, not payable after the defects liability period is over but immediately after the contract is completed. This contention is not wholly correct. Clause 4.1 requires release of security deposit not only upon completion of the work but upon passing of the final bill. The security deposit is released by the respondent along with the payment of the final bill on 10.10.2001.
4. Besides the petitioner had not completed the work entirely. The contract was terminated. The respondent contended that the petitioner offered to do certain jobs being the work left undone which fell within the scope of its work in the defect liability period. The respondent would claim that this aspect would show that the petitioner had sought more time to complete the job.
5. Item No.14 of the Conditions of Contract consisted of 2 components being 7.5% to be recovered in installments through deduction @ 10% on each running bill of the petitioner and 2.5% which was given as bank guarantee under Clause 14.1 relating to security deposit in the agreement between the parties.
6. Under Clause 14.4 no interest was to be payable under security deposit.
7. The respondent would contend that Clause 14.4 implied that there would be no payment of interest on th
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