The central legal point established in the judgment is the court's affirmation of the impugned Award, based on the interpretation of contractual terms and the rejection of objections filed under the Arbitration Act, 1940.

1. By this common judgment the objections filed by National Building Construction Corporation Limited (‘NBCC’) as well as S.S. Kapoor, Sole Proprietor of M/s. Jit Electricals under Sections 30 and 33 of the Arbitration Act, 1940 (‘Act’) against the Award dated 1st April 2006 passed by the learned Sole Arbitrator are being disposed of.

2. The impugned Award was passed in the disputes between the parties arising out of the contract for the work of external electrification on labour rate basis at Baniwalid, Libya that was awarded by NBCC to M/s. Jit Electricals for the value of Libyan Dinar (LD) 154,953.600 and for which an agreement was signed on 22nd June 1981.

3. The Notice Inviting Tender (‘NIT’), the Letter of Intent (‘LOI’), letters of Jit Electricals dated 18th August 1980 and 6th November 1980, the Acceptance Letter as well as the Agreement formed part of the contract between the parties. In terms of para 13 of the LOI, the contract was made subject to all conditions applicable to the contract between NBCC and the Libyan authorities for the construction of their utility services. Under para 11 of the Quotation Notice , all the payments were to be made in the Libyan Currency and NBCC was to assist the contractor in transferring abroad such amount in foreign currency as admissible under Libyan Exchange Control Regulations and also as per contractual conditions between the NBCC and the Libyan authorities.

4. With disputes arising between the parties, M/s. Jit Electricals invoked the arbitration Clause 10 of the General Terms and Conditions (‘GCC’) of the contract. NBCC was called upon to appoint an Arbitrator. The letter dated 3rd February 1990 was sent by M/s. Jit Electricals to NBCC in this regard. Upon failure of NBCC to appoint an Arbitrator M/s. Jit Electricals filed a petition under Section 20 (4) of the Act in this Court. Initially this Court appointed Mr. Justice M.L. Jain (Retired) as an Arbitrator. The NBCC had, on 14th December 1990, belatedly nominated Mr. G.S. Rao, General Manager of NBCC as an Arbitrator. Since the matter was pending before the Court, the said Arbitrator did not commence the proceedings. The NBCC then moved an application before this Court for setting aside the order by which Mr. Justice M.L. Jain was appointed as an Arbitrator. The Court allowed the application and set aside its order while giving directions to NBCC to nominate an Arbitrator in terms of the arbitration clause within six weeks. M/s. Jit Electricals filed an appeal FAO (OS) No. 55 of 1999 against the said order. The Division Bench allowed the appeal and appointed Mr. Justice P.K. Bahri (retired) as sole Arbitrator.

5. The facts in brief are that the Public Housing Corporation of Libya awarded a contract to the NBCC for construction of 1000 housing units with necessary public utility services at Baniwalid, Libya by a contract dated 7th April 1979. The contract was for providing the utility services including the works of electricity and public lighting network at the sites in Annexures A and B and 23 other sites in the valley of Baniwalid. This was a back-to-back contract wherein the contractor would be responsible for the complete execution of the electrical work on labour rate basis and would be responsible for paying all charges, stamp duty and taxes payable under the laws of Libya. The Contractor was to comply with all the Libyan laws and it was to be on labour rate basis in Libyan Dinar (LD) as per rates quoted without any liability on the NBCC on account of exchange rate fluctuations. Also the tenderers were put on notice to visit the sites in Libya at their own costs and to study the working conditions at the site before submitting the bid and without any obligation on the NBCC to award the work. The work was to be completed within six months from the date of issue of the LOI in phases.

6. NBCC issued the letter dated 17th January 1981 awarding the contract to M/s. Jit Electricals requiring it to mobilize its work