A contract's explicit provisions govern obligations, and discussions or observations do not equate to legally binding amendments unless formally executed, upholding the fundamental principles of contract interpretation and judicial approaches.

JUDGMENT :

SOMASEKHAR SUNDARESAN, J.

Context and Factual Background:

1. This Appeal has been filed under Section 37 of the Arbitration and Conciliation Act, 1996 (“the Act”) impugning an Arbitral Award dated November 7, 2012 (“Impugned Award”) and a Judgment dated September 24, 2014 (“Impugned Judgment”) which upheld the Impugned Award, dismissing a challenge under Section 34 of the Act.

2. The disputes and differences between the parties relate to the award of a work on August 31, 1999 and a short four-page agreement dated November 26, 1999, being signed (“Agreement”). The Appellant, the State of Maharashtra (“State”), awarded to the Respondent, Patwardhan Infrastructure Pvt. Ltd. (“Patwardhan”), a contract for construction of a two-lane bridge connecting Pen and Alibag across the Dharamtar Creek, on a build, operate and transfer basis, pursuant to a Tender inviting bids for the project (“Project”).

3. The Project had been bid for by M/s Ameya Developers “(“Ameya”), which won the bid with a proposed concession period of 13 years, 7 months and 35 days. The State, Ameya and Patwardhan executed a tripartite agreement for implementation of the Project. For all purposes of this judgement, references to Patwardhan are references to the concessionaire which is considered by all parties as being bound by, and a beneficiary of, the obligations and rights respectively, contracted for the Project.

4. The Agreement between the parties is a short four-page contract, which essentially records that the Project stands awarded, pursuant to the bid by Ameya in response to the Notice Inviting Bids dated November 3, 1998 (“Notice Inviting Bids”) and the terms and conditions contained in the draft agreement set out in the said notice. The parties actually did not separately sign the draft agreement as an executed agreement, but they have no quarrel that these terms, among others, constitute the contract-forming documentation binding the parties.

5. It is common ground between the parties that upon execution of the Agreement, it included within its sweep, the provisions of the Notice Inviting Bids and, thereby, the terms of the draft agreement contained therein, and indeed the minutes of the meeting held in relation to the Project before executing the Agreement. This judgement proceeds on this consensus and interprets the terms and conditions contained in the Notice Inviting Bids as also the minutes of the meeting held between the parties. At the heart of the adjudication in the underlying arbitration proceedings lies the interpretation of Clauses 3.4.19 and 3.7.2, as set out in the aforesaid terms and conditions, and the minutes of the meeting held on August 18, 1999 (“MOM”).

6. The Project, as is customary with toll-based concessions, entailed the bidding private concessionaires quoting the period after which the infrastructure facility constructed by them would revert to the State. In the interregnum, the private concessionaire would get to charge toll for usage of the bridge by vehicles. The toll data was indicated in the bid documents, and the rate and frequency of escalation of the toll tariff were also agreed stipulations in the Agreement.

7. It is common ground that there had b