S. Muralidhar, J.

1. The Petitioner, Power Grid Corporation of India Limited (‘PGCIL’), has in this petition under Section 34 of the Arbitration and Conciliation Act, 1996 (‘Act’) challenged the Award dated 20th February 2009 passed by the arbitral Tribunal (‘Tribunal’) awarding the Respondent, Siemens Limited (‘Siemens’) Rs.1,96,07,224 towards cost of pile foundation along with interest thereto at 10% per annum from 11th April 2005 to 10th February 2009 and cost of arbitration in the sum of Rs.12,50,000. Siemens was also awarded post-Award interest @ 10% p.a. till the date of payment in the event the awarded sum was not paid within two months.

Background Facts

2. PGCIL floated a tender inviting bids for two contracts for its sub-station at Gorakhpur. One was a work supplies contract and the other a services contract. As part of the bidding requirement, a joint venture (‘JV’) was entered into between Siemens and Transformers and Electricals Kerala Ltd. (‘TEKL’) in a proforma prescribed by PGCIL. A power of attorney (‘PoA’) was also executed by TEKL in favour of Siemens in the proforma stipulated by PGCIL on 10th December 2003, simultaneous with the execution of the JV agreement whereby TEKL constituted Siemens as the lawful attorney/authorised representative/partner-in-charge “to exercise all or any of the power for and on behalf of the JV” in respect of the contracts for which bids had been invited by the PGCIL.

3. The dispute between the parties is in relation to the services contract executed on 29th March 2004 between PGCIL and the JV of Siemens and TEKL. The services contract agreement (‘SCA’) was executed by PGCIL and the JV, with Siemens acting on behalf of the JV as lead partner. The SCA was for a total value of Rs.8,24,41,262. Civil works covered under the services contract were of two categories: (i) for control room and administrative building and (ii) for switch yard area covering tower foundation. For the control room building, PGCIL provided Bill of Quantities (‘BOQ’) and prices were on unit rate basis. There is no dispute between the parties in relation to the work done for the control room and the administrative building. While for the control room PGCIL supplied foundation drawings, it did not do so for the 400 KV sub-station tower foundation. The foundation drawings for the control room foundation envisaged a spread foot foundation. The tower foundation was to come up within a distance of about 100 meters from the control room. According to Siemens, on the reasonable presumption that the soil condition at the location where the tower foundation was to be erected, i.e. within 100 meters from the control room would be no different, Siemens gave a bid for spread foot foundation for the tower foundation as well.

4. After the contract was awarded to Siemens, it got soil investigation done in terms of the contract between May and August 2004. On 30th September 2004, Siemens informed PGCIL that given the soil condition in the area where the tower foundation had to be erected, it would be necessary to lay a pile foundation and not a spread foot foundation. This meant that the cost of the project would substantially increase. With no response to the letter, Siemens wrote a further letter on 4th October 2004 to PGCIL seeking confirmation of Siemens incurring extra cost towards pile foundation. On 29th November 2004, PGCIL wrote to Siemens rejecting the claim for pile foundation work by stating that it was covered under the scope of the contract. PGCIL asked for rate analysis and justification for the control room foundation works so that the claim could be processed. On its part Siemens wrote another letter on 3rd December 2004 stating that PGCIL’s rejection for its claim for pile work for the tower foundation was unacceptable to it and should be reconsidered.

5. The case of Siemens is that there was delay in handing over of the leveled site for construction work for even the control room and reactor block. A