Arbitral awards must be upheld if the party's actions induce impossibility, negating frustration claims; contractual obligations fulfilled warrant enforcement of the award.

JUDGMENT :

SANDEEP V. MARNE, J.

1) The Uttar Pradesh Legislative Assembly Secretariat has filed the present Petition under Section 34 of the Arbitration and Conciliation Act, 1996 (Arbitration Act) challenging Award dated 24 November 2023 passed by the Learned Sole Arbitrator. By the Impugned Award, the Learned Arbitrator has allowed the claim of the Respondent declaring that termination of Agreement dated 5 December 2015 by the Petitioner as wrong, illegal and has set aside the same. The Arbitrator has directed Petitioner to pay to the Respondent sum of Rs. 5,37,37,154/- along with interest at the rate of 1.5% per month from the date of the arbitration proceedings till its recovery. The Arbitral Tribunal has also awarded costs of Rs.11,00,842/- in favor of the Respondent.

2) In the year 2015, Uttar Pradesh Legislative Assembly (ULPA) Secretariat proposed to conduct examination for recruitment of Review Officers and Assistant Review Officers in the UPLA. Respondent-Tata Consultancy Services Limited (TCS) agreed to provide services for holding of selection for filling up the said post. Accordingly, Agreement for Services dated 5 December 2015 was executed between UPLA Secretariat and Respondent-TCS. The services to be provided by the Respondent-TCS under the Agreement included application management, allocation management, item management, online assessments, evaluation management and results. The compensation payable for providing the services was Rs.350/- per candidate per session. Respondent-TCS was informed that the number of candidates approved for hall tickets in 15 cities was 77804. Respondent-TCS conducted online examination for recruitment of Review Officers and Assistant Review officers on 29 December 2015 and 30 December 2015 for 77804 candidates. On 30 December 2015, TCS raised invoices in the sum of Rs. 3,11,79,953/-.

3) By letter dated 27 June 2016, the Principal Secretary, Vidhan Sabha, Uttar Pradesh informed Respondent-TCS that the Agreement was terminated and work order issued in respect thereof was cancelled on account of certain anomalies in the online examination conducted by TCS for Railway Recruitment Board. By letter dated 4 August 2016, TCS challenged termination of the Agreement. Petitioner responded by letter dated 27 October 2016 enumerating the facts and circumstances warranting cancellation of examination. By letter dated 22 December 2016, TCS reiterated successful conduct of online examination and demanded payment agreed in the Agreement together with interest. By letter dated 20 January 2017, Petitioner contended that result of the examination could not be processed and announced and hence the work relating to the examination could not be said to be completed. It was further pointed out that the investigations conducted by the Special Task Force (STF) exhibited serious anomalies and irregularities in the examination conducted for Railway Recruitment Board by TCS and that there were serious allegations of connivance between the candidates and Respondent’s staff. Petitioner denied responsibility of making any payment. Thereafter certain correspondence took place between the parties.

4) Respondent-TCS invoked Arbitration clause by serving advocates notice dated 11 July 2018. Petitioner objected to reference of disputes to arbitration by letter dated 24 July 2018. Therefore, TCS filed application under Section 11 of the Arbitration Act for appointment of Arbitrator. By order dated 18 November 2019, this Court appointed the learned sole Arbitrator for resolution of disputes betwee