An arbitral tribunal may imply a term of reasonable quantity in contracts to ensure business efficacy, provided it does not contradict express terms.

JUDGMENT :

SOUMEN SEN, J.

The appeal is arising out of a judgment and order passed by the learned Single Judge in connection with an application filed by the appellant for setting aside of an award made and published on 17th March, 2016 by the Arbitral Tribunal.

2. The Arbitral Tribunal had partly allowed the claim of the parties.

3. In the arbitration proceeding Steel Authority of India (in short ‘SAIL’) was the claimant. The respondent HTC in the said proceeding filed a counter-statement with a counter claim.

4. On a set off being allowed the appellant had suffered an award of Rs.7,45,56,134/-together with interest @ 18% per annum on the amount from the date of the award till payment apart from the costs and expenses of the arbitration.

5. The arbitral tribunal was consisted of three former Hon’ble Judges of this court.

6. It was a unanimous award.

7. The learned Single Judge on consideration of the submissions made on behalf of the respective parties upheld the award and dismissed the application for setting aside of the award.

8. This order is now under challenge.

9. Before we delve into the issues raised on behalf of the parties we feel it necessary to indicate the relevant facts.

10. Pursuant to an invitation to tender notice dated 5th/6th August, 1996 for handling iron and steel materials at the Stock-yard of SAIL located at Paharpur, 20 Coal Berth and DP-II siding of Calcutta the respondent participated in the said tender and after due evaluation of all the tenders submitted by different parties, the contract was awarded to HTC Engineering Pvt. Ltd. (in short “HTC”) with effect from 23rd November, 1996. One of the stipulations made in the said tender was that the prospective contractors must have an experience of handling at least 125 lacs MT of Steel materials in any of the preceding five financial years. The tenderer must own at least 50 per cent of the equipment specified at clauses 2.1 of Instructions to Tenderers in its own name.

11. The estimated quantities proposed to be handled during the 1st year of operation of the contract are mentioned in Clause 4. The said Clause is reproduced below:

4. The estimated quantities proposed to be handled during the first year of operation of the contract are expected to be as under (calculation based on sales plan):

(Emphasis supplied)

12. Clause 5 states that the estimated quantities are only for the purpose of finding out the value of the tender and SAIL would not be anyway liable if the actual quantity of the work differs from the estimated quantity indicated in Clause 4. The said Clause reads:

“5. The estimated quantities for the first year of operation of contract are only for the purpose of finding out the value of the tender and SAIL is in no way liable if the actual quantity of work differs from estimated quantity indicated above.”

(emphasis supplied)

13. In Clause 9 of the Tender Notice for appointment of Handling Contractor it is stated:

“This Tender is subject to the interim order passed by the Hon’ble Calcutta High Court on 24th July, 1995 in FMAT No.1460 of 94 (Steel Authority of India Ltd. & Ors. vs. Sheonayak Murai & Ors. by which the Hon’ble Calcutta High Court directed to maintain the status quo of the employment of the contract labour working in the Paharpur Stockyard till the disposal of the said Appeal.”

(emphasis supplied)

14. The Clauses 3, 3.2 and 4.0 of the Instruction to Tenderers Schedule of Operation and Rates are mentioned. The said Clauses read:

3. Schedule of operation and payment:

3.2. The rates quoted will be deemed to be inclusive of the cost of discharging all the general duties for performing t