The interpretation of contractual obligations under the Business Associate Agreement supports an Appellant's liability to pay despite secondary payment mechanisms being outlined, reaffirming the need for accurate claim assessments in arbitration.

JUDGMENT:

SANDEEP V. MARNE, J.

1) By this Petition filed under the provisions of Section 34 of the Arbitration and Conciliation Act, 1996 (Arbitration Act), the Petitioner has challenged the Award of the learned sole Arbitrator dated 11 July 2024. By the impugned Award, the learned Arbitrator has awarded claim in favour of the Respondent in the sum of Rs.25,27,78,775/- alongwith interest @8% p.a. from the date of filing of the statement of claim till realisation. The Tribunal has also awarded costs of Rs.25,00,000/- to the Respondent.

FACTS

2) Petitioner is an unlisted public company, which is a public- private joint venture between Government of Maharashtra and Tata Consultancy Services Ltd. Petitioner is engaged in the business of IT services and IT consulting. Petitioner has undertaken the process of facilitating digitisation and strengthening penetration of information technology in various departments of Government of Maharashtra. Through its website, Petitioner provides various online services to the citizens, particularly relating to providing digitised copies of 7/12 extracts, renewal of licenses / permits, etc. The Respondent, who was formerly known as ‘Unity Telecom Infrastructure Ltd.’ is a technology company delivering industry-specific solutions. On 7 April 2011, Petitioner was appointed by Rural Development Department (RDD) of the Government of Maharashtra to execute the project of e-Panchayat Raj Institute (e-PRI project) and Citizen Services using GSK Wallet (GSK Top-Up). Under the project, Petitioner was to provide inter alia requisite trained and skilled personnel for implementation and maintenance of the software projects at Divisional, Zilla Parishad, Panchayat Samiti and Grampanchayat levels. Government Resolution dated 26 April 2011 was issued, by which the State Government decided the rates of operators for implementation of the project.

3) Business Associate Agreement (BAA) dated 30 April 2012 was executed between the Petitioner and the Respondent, under which e- PRI project was subcontracted to the Respondent. The Respondent was to provide requisite trained manpower at Grampanchayat, Panchayat Samiti and Zilla Parishad level for implementation of e-PRI project. The personnel supplied by the Respondent were to be deployed to Petitioner’s location or the location of the clients for working at the digitization project along with Petitioner’s team. The personnel of Respondent were supposed to execute implementation and maintenance activities in connection with computer software applications. Under the Agreement, Petitioner appointed Respondent on non-exclusive basis as its Business Associate on “person- month rate” basis. The term of the Agreement was for 5 years from 30 April 2012 to 29 April 2017. As a consideration, Petitioner was to pay to the Respondent as per the Schedule of Technical Fees. According to the Petitioner, the payments were to be released to the Respondent only after receipt of payment by Petitioner from RDD.

4) The Respondent commenced performance of the contract. The disputes arose between the Petitioner and the Respondent with regard to non-payment of amounts due to the Respondent under the Agreement. On 13 June 2019, Respondent filed Commercial Arbitration Application No.276 of 2019 under Section 11 of the Arbitration Act