The main legal point established in the judgment is the requirement to ensure full opportunity for the parties to present their respective cases and establish the veracity of the documents relied upon, as well as the errors in the constitution of the Tribunal and the procedure adopted by the Tribunal.

IA No. 18185/2011 (for restoration) in OMP No. 91/2005

1. For the reasons stated therein, this application is allowed. The petition is

2. The application is disposed of. restored to its file.

3. The challenge in OMP No. 91 of 2005 under Section 34 of the Arbitration & Conciliation Act, 1996 (‘Act’) filed by Degremont Limited (formerly known as Ondeo Degremont Limited) is to the impugned Award dated 10th December 2004 of the Arbitral Tribunal (‘Tribunal’) allowing Claim No. 1 of Respondent No. 1 Yamuna Gases & Chemicals Limited and holding that the Petitioner should pay Respondent No. 1 a sum of Rs. 46,24,568/-together with interest @ 10% per annum from 16th June 2001 till payment. The Tribunal dismissed all other claims of Respondent No. 1 and counter claims of the Petitioner. The Respondent No. 1 was also held to be entitled to pay costs of Rs. 50,000/-.

4. OMP No. 228 of 2005 is by Yamuna Gases & Chemicals Limited challenging the same impugned Award to the extent that most of its claims were rejected by the Tribunal.

5. For the sake of convenience in this judgment hereinafter Degremont Limited would be referred to as the Petitioner and Yamuna Gases & Chemicals Limited as Respondent No.1.

Background facts

6. The background facts are that the State Government of Haryana was required, in terms of the order dated 1st September 1995 of the Supreme Court, to instal Sewage Treatment Plants (‘STPs’) in Haryana under the Yamuna Action Plan (‘YAP’). The Public Health Department (‘PHED’), Government of Haryana invited tenders in 1996 for construction, erection and commissioning of STPs under the YAP. On 13th May 1996, the PHED awarded the main contract to the Petitioner for construction, erection and commissioning of 50 MLD STPs at Faridabad. The Petitioner entered into a sub-contract with Respondent No. 1 on 30th November 1995 and awarded to Respondent No. 1 part of the work of supply and erection of FRP/PVC/SDP works relating to UASB reactors at a lump sum price of Rs. 380 lakhs through a letter of intent dated 6th November 1996.

7. Article 18.1 of the sub-contract agreement contained an arbitration clause, which reads as under:

“18 Disputes

18.1 Failing amicable settlement of any disputes or differences within 30 days of the written notice in writing sent by any of the parties, the disputes and differences shall be finally settled under the rules of conciliation and arbitration of the Indian Council of Arbitration by one or more arbitrators preferably retired Supreme Court Judges appointed in accordance with the said rules. The language of the arbitration shall be English. The parties hereby submit to such arbitration and to the enforcement of any award resulting therefrom by any Court of competent jurisdiction. The place of arbitration unless otherwise mutually agreed between the parties shall be in Delhi.”

8. Against Respondent No. 1 furnishing a corporate guarantee to the Petitioner on 10th December 1996 in the sum of Rs. 38 lakhs, which guarantee was valid up to 9th June 1997, the Petitioner released the said sum to Respondent No. 1 as mobilization advance. According to Respondent No. 1 it completed the sub-contracted work to the satisfaction of both the Petitioner and the PHED in May 1999. It is claimed that the entire payment was received by the Petitioner but it failed to pay Respondent No. 1 a balance sum of Rs. 38 lakhs for which Respondent No. 1 issued a legal notice dated 12th March 2002 to the Petitioner. Thereafter on 5th September 2002, Respondent No. 1 submitted an application before the Indian Council of Arbitration (‘ICA’) (Respondent No. 2 in OMP No. 91 of 2005) seeking the appointment of an Arbitrator.

9. Counsel for Respondent No. 1 wrote to ICA on 5th August 2002 enclosing details of the 12 claims it was making against the Petitioner. On th September 2002 ICA wrote to the Petitioner informing it of the filing of the application by Respondent No. 1 through its counsel invoking the arbitration clause. A cop