An Arbitral Tribunal must adhere to explicit contractual terms without imposing external fairness standards, as such actions may result in rewriting the contract, which is impermissible under arbitration law.

Sandeep V. Marne, J.

1) Petitioner-Central Railway has filed the present Petition under the provisions of Section 34 of the Arbitration and Conciliation Act, 1996 (Arbitration Act) challenging the Award dated 7 March 2024 passed by the Arbitral Tribunal awarding sum of Rs.4,89,49,985/- in favour of the Respondent alongwith GST. The disputes between parties have arisen during performance of contract by the Respondent for collection of soiled linen from AC coaches, washing in mechanized laundry, supply and loading of washed linen into AC coaches. Out of various claims raised by the Respondent, the Arbitral Tribunal has awarded claims towards loss of linen, delay penalty, penalty over ceiling of 10%, fixed cost compensation and electricity charges totally amounting Rs.4,89,49,985/-.

2) A brief factual background in which the Arbitration Petition arises is stated thus:

Petitioner-Central Railway invited open tender dated 11 January 2010 for setting up and operating dedicated mechanized laundry in railway premises in Mumbai at Wadibundar Depot on Build-Own-Operate- Transfer model (BOOT) for initial period of 15 years including supply and installation of plant, equipment and related infrastructure (works) alongwith collection and transportation of soiled linen from coaches/trains and transportation/loading of washed and packed linen in the coaches/trains at Chhatrapati Shivaji Maharaj Terminus (CSMT), Lokmanya Tilak Terminus (LTT) and Dadar Terminus (DT). Respondent participated in the tender process and emerged as a successful bidder. Respondent was awarded contract by the Petitioner at the cost of Rs.79,94,45,813/- for a period of 15 years from the date of commissioning of the plant. Contract Agreement dated 17 March 2012 was executed between the parties. The contract commenced from 16 April 2013.

3) During execution of the contract, disputes and differences arose between the parties and as per Clause-64(1) contained in the Regulation of Tenders and Contracts and General Conditions Of Contract dated 16 July 2020, the Respondent invoked arbitration clause and sought resolution of the disputes. The General Manager of Central Railways constituted Arbitral Tribunal comprising of three retired railway officials, Shri. Prashant K. Ranade, IRTS. Retd. CAO, System, CR as presiding Arbitrator, Shri. Chandra Mohan Jindal, Retd, DG. IRIFM and Shri. Alok Kumar Tewari, Retd. AM (EnHM), Railways Board as Co-Arbitrators.

4) The Respondent filed Statement of Claim claiming an amount of Rs.18,01,83,764/- from the Petitioner. The claim was resisted by the Petitioner-Railways by filing Statement of Defense. Both the sides filed various documents in support of their respective claims. It appears that oral evidence was not led by either of the parties. Based on documentary evidence and written arguments, the Arbitral Tribunal has allowed most of the claims sought for by the Respondent by its Award dated 7 March 2024. Petitioner-Railways are directed to pay to the Respondents aggregate claim amount of Rs.4,89,49,985/-. Aggrieved by the Award dated 7 March 2024, the Petitioner has filed the present Petition under Section 34 of the Arbitration Act.

5) Mr. Bubna, the learned counsel appearing for the Petitioner- Central Railway has submitted that the Arbitral Tribunal has erred in awarding claims to the Respondent relating to recovery of loss of linen covered by Issue Nos.1 and 2.