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2013 Supreme(Del) 176
High Court of Delhi
MANMOHAN SINGH, J.
National Highways Authority of India
Versus
M/s Oriental Structure Engineers Ltd.- Gammon India Ltd. (JV)
OMP No. 357 of 2011
Decided on : 07-02-2013
For the Petitioner:Sudhir Nandrajog, Senior Advocate with Ms. Padma Priya, Mukesh Kumar Advocates.
For the Respondent:Amit George, Abin Mathew, Ms. Joy Sunil, Advocates.
The main legal point established in the judgment is that the findings of the Arbitral Tribunal are final and cannot be challenged unless there is an error apparent on the face of the award.
Headnote:
Arbitration and Conciliation Act - National Highways Authority of India - 1996 - [Payment of variation item to median railing in fly overs, Reimbursement under Sub-clause 70.8 of transit fee] - The court discussed the circumstances under which the median railing in the flyovers were provided and the claimant's demand for payment from the NHAI. The court found that the provision of median railing was necessitated due to a change in the specified sequence and methodology of construction of the flyovers, and therefore, the additional cost involved must be a charge on the NHAI. The court also held that the enhanced transit fee was leviable on the stone aggregate transported through the forest, and the contractor was entitled to reimbursement of the additional cost in accordance with the contract. The objections raised by the petitioner were found to be without merit as the findings of the Arbitral Tribunal were in consonance with the contract between the parties and the law of the land.
Fact of the Case:
The petitioner filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996 to set aside the Award passed by the Arbitral Tribunal against the petitioner and in favor of the respondent. The disputes related to payment of variation item to median railing in fly overs and reimbursement under Sub-clause 70.8 of transit fee. The petitioner also filed an application for condonation of delay of 63 days in re-filing the petition.
Finding of the Court:
The court found that the objections raised by the petitioner were without merit as the findings of the Arbitral Tribunal were in consonance with the contract between the parties and the law of the land. The court dismissed the petition and the application for condonation of delay.
Issues: The issues involved in the case were the payment of variation item to median railing in fly overs and reimbursement under Sub-clause 70.8 of transit fee.
Ratio Decidendi: The court held that the provision of median railing was necessitated due to a change in the specified sequence and methodology of construction of the flyovers, and therefore, the additional cost involved must be a charge on the NHAI. The court also held that the enhanced transit fee was leviable on the stone aggregate transported through the forest, and the contractor was entitled to reimbursement of the additional cost in accordance with the contract.
Final Decision: The court dismissed the petition and the application for condonation of delay.
MANMOHAN SINGH, J.
1. This petition has been filed by the applicant under Section 34 of the Arbitration and Conciliation Act, 1996 (herein after referred to as ‘the Act’) for setting aside the Award dated 30th October, 2010 passed by the Arbitral Tribunal against the applicant and in favour of the respondent.
2. The applicant is a statutory body constituted under Section 3 of the national Highways Authority of India Act, 1988 and its functions are to develop, maintain and manage the National Highways. The respondent, M/s OSE-GIL is a joint venture civil contractors consisting of M/s Oriental Structure Engineers Ltd. and Gammon India Ltd. (JV).
3. The respondent, M/s. Oriental Structural Engineers Ltd. - Gammon India Ltd. (JV), had entered into a contract with the petitioner, National Highways Authority of India, vide agreement dated 26th March, 2002, for the execution of the work of “Four Laning and strengthening of the existing two Lane section from km 199.66 to km 250.50 on NH2 in the state of U. P.” with an agreed contract price of Rs. 328,49,37,824/-.
4. Certain disputes had arisen between the parties during execution of the work and these disputes were referred to arbitration in separate references.
5. The reference in the present case, being reference No. 4, relates to two disputes regarding (1) Payment of variation item to median railing in fly overs and (2) Reimbursement under Sub-clause 70.8 of transit fee, at enhanced rates, paid to the forest department of the state of Uttar Pradesh.
6. In terms of the contract between the parties the aforesaid two disputes in the present case were referred to the arbitration of a three member Arbitral Tribunal comprised of technical experts in the field; namely Shri Surjeet Singh, Presiding Arbitrator (Former Secretary to the Government of Madhya Pradesh, Public Works Department), Shri S. Venkatesan, Co-Arbitrator (Retired Executive Director, RITES) and Shri Prem Nath, Co-Arbitrator (Retired Executive Director, Airports Authority of India) who have passed the unanimous impugned arbitral award dated 30th October, 2010 the Ld. Arbitral Tribunal partly allowed both claims of the respondent/Claimant.
7. The petitioner has thus preferred the present petition under Section 34 of the Arbitration and Conciliation Act, 1996 challenging the arbitral award dated 30th October, 2010.
8. Along with the petition, the petitioner has also filed an application praying for condonation of delay of 63 days in re-filing the petition. The respondent has opposed both the petition on merits as well as on the ground of limitation by filing replies to both the petition under Section 34 as well as the application praying for condonation of delay.
9. As regards the challenge to the arbitral award on the merit is concerned, the respondent submits that the petitioner has not placed any material facts nor made out any grounds whatsoever that are relevant under the above Section for setting aside the Award as the arbitral award is a unanimous and well reasoned award which is in consonance with the contract between the parties and the law of the land.
10. Let me now first deal with the matter on merit.
CLAIM NO. 1
The first claim relates to payment of variation item of providing median railing in flyovers. The case of the respondent is that it submitted, as required in Sub clause 14.1 of the conditions of contract, the programme for construction of the flyovers at Rambagh, Tundla and Firozabad in full width i.e. simultaneous construction of both the left hand side and right hand side carriageways. This programme is the sacrosanct guide-book as per which the work was to be executed and also expressly approved by the Engineer with the consent of the Employer/NHAI before the start of the woks. However, due to site constraints arising out of failure of the petitioner/NHAI to make available required land as promised, this simultaneous construction of both side carriageways was not possible and the only w
