The responsibility for obtaining clearances and the consequences of delay in obtaining such clearances under the contract were central to the court's decision.

G.S. KULKARNI, J.

1. This appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (for short 'the Act') arises from the order dated 6 May 2016 passed by the learned Single Judge whereby the Appellant's/Claimant's petition under Section 34 of the Arbitration Act challenging the award of the Arbitral Tribunal, has been dismissed.

2. The Appellant is the original claimant and the Respondent is the original Respondent before the Arbitral Tribunal. The dispute between the parties arose in respect of a contract awarded to the Appellant by the Respondent for which tenders were invited namely the contract of “Current Wind and Wave Observations at 6 locations on the East Coast in India namely KGKD 8, KGKD 9, KGKD 10, KGKD 11, GDSW and GDNW.” The Appellant's offer was accepted by what is termed as a notice of Award dated 29 October 2003 for the said work of “Current, Wind and Wave Observation.” On 23 December 2013 the parties signed a formal contract. There is no dispute that the contract which was awarded was a lump sum/fixed price contract. The agreement in clause 1.1.1 recites that it shall be deemed to have come into effect on the date of notice of award i.e. 29 October 2003.

3. The Appellant has relied on certain events which have taken place prior to the execution of the formal contract namely meeting held on 12 December 2003 between the Appellant and Mr. Bhatnagar, the representative of the Respondent. This meeting was called as “Basin Group Meeting”. The case of the Appellant was that a detailed schedule of the work was prepared in Basin Group Meeting keeping in mind the actual dates on which drilling operations were to commence at each of the locations where wind, wave and current operations were to be carried out, as observations were required to be undertaken prior to commencement of the drilling work.

4. Also a further event dated 16 December 2003 is relied upon to state that a team of officers of Indian Navy inspected the vessel to be used by the Appellant for the work contracted at Vishakapatnam. The Appellant states that the naval team did not give clearance to the vessel immediately but stated that such clearance would have to be obtained from naval headquarter, Ministry of Defence, Delhi. The Appellant's case is that on 9 January 2004 the naval team once again inspected the Appellant's vessel and granted partial clearance for wind and wave observation work and for current observation work upto a maximum observation period of 48 hours. On 10 January 2004 the naval team also cleared the deployment of wave buoys. On 11 January 2004 the vessel hired by the Appellant set sailed for carrying out wind and wave observation work at the KGKD 8 and KGKD 9 locations. Thereafter on 9 February 2004 again the Naval authorities granted clearance for carrying out current observation work for 30 days period as per the terms of the agreement between the parties. Accordingly, on 10 February 2004 the vessel hired by the claimant set out to sail at KGKD 10 location for deploying equipment for “current” observation work at that location. On 11 February 2004 by a fax letter of the Respondent, the Appellant was informed that drilling operations at KGKD 10 were to commence by 19 February 2004 and therefore, the Appellant was asked to discontinue the “current” observations work latest by 18 February 2004. The Appellant thereafter deployed the observations equipment and moorings at the other locations. The contract was accordingly performed by the Appellant during the stipulated period. The Appellant raised invoices dated 1st/3rd June 2004 and 22nd June, 2004 which were duly paid by the Respondent.

5. The Appellant thereafter raised a dispute claiming certain additional charges and balance amount due and payable to the Appellant by the Respondent. These claims were rejected by the Respondent and the dispute in regard to these claims was thereafter referred for arbitration before a three member Arbitral Tribunal. The Appellant ra