2012 Supreme(Del) 765

IN THE HIGH COURT OF DELHI AT NEW DELHI
S. MURALIDHAR, J.
NATIONAL BUILDING CONSTRUCTION CORPORATION LIMITED – Petitioner
Versus
A.M. RASOOL CONSTRUCTION AND ENGINEERING SERVICES PVT. LTD. –Respondent
O.M.P. 411 of 2003
Decided On: 7.3.2012

Headnote:

The Court upheld the Arbitrator's Award and dismissed the objections raised by the National Building Construction Corporation Ltd. (NBCC) against the Award. The Court held that the Arbitrator's findings were based on a proper analysis of the evidence and the applicable law and were not perverse or patently illegal. The Court also held that the NBCC failed to prove that the proper law of the contract was Libyan law and that the claims of the PRW were barred by limitation.

Fact of the Case:

NBCC was assigned the work of construction of 1305 houses at Benawalid and Ghat, Libya and a 120 bedded hospital project at Ghat, Libya. A contract was entered into between NBCC and the Housing Corporation of Libya (HCL). In view of the magnitude of the work, NBCC decided to appoint sub-contractors. The work of construction of 100 houses at Kalala, Ghat, Libya on labour rate basis was awarded to M/s. A.M. Rasool and Company, a partnership firm, referred to as Piece Rate Worker ("PRW"). A Letter of Intent ("LOI") dated 29th December 1978 issued by the NBCC to the PRW read as under: "We are pleased to inform you that your offer for construction of 100 houses as above at Ghat, Libya, on labour rates, is acceptable to us subject to the following conditions:– 1. Tentative estimated value of the labour contract is Libyan Dinars three lakhs ninety two thousand three hundred seventy point sixty four (LD 3,92,370.64) including 35% premium. You shall have to furnish performance guarantee of 7-1/2 (seven and half only) of the above sum in Indian currency in the form of the contract from any nationalized/scheduled Bank. 2. That you will mobilize on the site of work within six weeks of the issue of this letter. 3. Advance of 10% of the estimated value of the contract will be paid to you in Libyan Dinars against Bank Guarantee from nationalized scheduled bank for equivalent Indian Currency within 15 days of furnishing the guarantee for performance of the contract or mobile at site whichever is later. However, this advance shall be limited to actual expenses to be incurred by the PRW. 4. That the time of completion for construction of 100 houses shall be 18 months from the date of issue of this letter of intent. 5. We are agreeable to give you a premium of 35% over the rate given in the enclosed schedule of items. 6. Award of some more houses may be considered by the Corporation at Ghat for execution in due course after the Corporation is satisfied with the performance of the PRW for construction of these 100 houses. Additional houses that may be awarded to the PRW shall be at the rates on which the work of 100 houses at Ghat has been allotted. 7. PRW will extend all reasonable facilities to the other contractor such as electrical works etc. 8. The variations shall be limited 25% of the contract value."

Finding of the Court:

1. The Court held that the Arbitrator's findings were based on a proper analysis of the evidence and the applicable law and were not perverse or patently illegal. 2. The Court held that the NBCC failed to prove that the proper law of the contract was Libyan law. 3. The Court held that the claims of the PRW were not barred by limitation.

Issues: 1. Whether the Arbitrator's findings were perverse or patently illegal? 2. Whether the proper law of the contract was Libyan law? 3. Whether the claims of the PRW were barred by limitation?

Ratio Decidendi: 1. The Court held that the Arbitrator's findings were based on a proper analysis of the evidence and the applicable law and were not perverse or patently illegal. The Court observed that the Arbitrator had considered all the evidence and arguments presented by both parties and had given cogent reasons for his findings. 2. The Court held that the NBCC failed to prove that the proper law of the contract was Libyan law. The Court observed that the contract did not expressly state that the proper law of the contract was Libyan law and that the NBCC had not produced any evidence to show that Libyan law should be applied. 3. The Court held that the claims of the PRW were not barred by limitation. The Court observed that the NBCC had not raised the issue of limitation in its objections to the Award and that the claims of the PRW were within the limitation period.

Final Decision: The Court upheld the Arbitrator's Award and dismissed the objections raised by the NBCC against the Award.