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IN THE HIGH COURT OF DELHI AT NEW DELHI
PRADEEP NANDRAJOG, MANMOHAN SINGH, JJ.
NTPC LIMITED - Appellant
Versus
MARATHON ELECTRIC MOTORS INDIA LTD. - Respondent
FAO(OS) No.416/2007
Decided on : July 31, 2012
Arbitration and Conciliation Act - Erection, Testing and Commissioning of Turbine Generators - 1996 (Section 37(1)(b))
Fact of the Case:
The appellant invited bids for the erection, testing, and commissioning of turbine generators for a power project. Disputes arose regarding the costs and losses incurred during the project, leading to arbitration and subsequent appeals.
Finding of the Court:
The court dismissed the appellant's objections to the additional award, holding that the arbitrator's decision was based on the anticipated loss claimed by the appellant and that the objections were withdrawn after hearing. The court found no grounds for interference with the arbitrator's decision.
Issues: Dispute over costs and losses incurred during the project, objections to the additional award, and the application for correction of typographical errors.
Ratio Decidendi: The court emphasized that the scope of challenge to an award under Section 34 of the Act does not include challenging the arbitrator's conclusion or evidence appreciation. The court also highlighted that the application for correction of errors was filed after the withdrawal of objections and was found to be barred by limitation.
Final Decision: The appeal was dismissed with no order as to costs.
MANMOHAN SINGH, J. :
1. This appeal under Section 37 (1)(b) of the Arbitration and Conciliation Act, 1996 (in short, called “The Act”) is directed against the order dated 22nd August, 2007 passed by the learned Single Judge in OMP No.331/2006 whereby the objections preferred by the appellant to the additional award dated 29th May, 2006 were dismissed.
2. Relevant facts are that the appellant invited bids for the erection, testing and commissioning of four units of Turbine Generators, each of 210 MW for the Kahalgaon Super Thermal Power Project in the District of Bhagalpur, State of Bihar. The respondent submitted their bid which was accepted. The appellant thereafter issued a letter of award in favour of the respondent for erection, testing and commissioning of four units of turbine generator each of 210 MW for the Kahalgaon Super Thermal Power Project on 6th June, 1989.
3. Thereafter, a formal agreement was entered into between NTPC and the respondent on 20th March, 1990 and the contract was signed by the parties on 21st May, 1990. The value of the work was quantified at Rs. 2,34,43,503.92. The contract completion date was fixed as 6th August, 1992.
4. A letter of award was issued also in respect of High Pressure Piping contract on 20th July, 1992 for the same project and a formal agreement was signed on 20th November, 1992.
5. As a consequence of closure of the contract on 6th October, 1998, the appellant wrote a letter to the respondent stating that it had become entitled to recovery of a sum of Rs. 62,69,282.79 from the respondent. The appellant thereafter called upon the respondent by way of communication dated 24th September, 1999 to pay the said amount.
6. The respondent vide notice dated 12th September, 2001, under clause 25.1 of the General Conditions of Contract, requested the appellant to nominate an engineer and refer the matter pertaining to its claim for decision by the engineer. The appellant found that none of the claims of the respondent were tenable and information in this regard was given by vide letter dated 3rd October, 2001.
7. The respondent by a notice under clause 25.6 read with clause 25.4 dated 1st November, 2001, asked the appellant to refer its dispute for settlement to arbitration in accordance with clause 25.6 of General Conditions of Contract and also nominated its Arbitrator. The appellant also nominated former Law Secretary to the Government of India as its Arbitrator. The President of Institution of Engineers (India) appointed Mr. Pradeep Chaturvedi, as the Presiding Arbitrator.
8. The arbitral tribunal thereafter entered upon the reference on 2nd April, 2002. The reference was concluded by an award dated 14th December, 2005 delivered by the majority of two members as also an award dated 2nd January, 2006 delivered by the learned dissenting arbitrator. The learned dissenting arbitrator differed only with regard to one counter claim of appellant for a sum of Rs. 5,07,000/- on account of the value of Central Store Issue materials.
9. Thereafter, the appellant being aggrieved by the majority of award, filed the objections under Section 34 of the Arbitration and Conciliation Act, 1996. The said objections numbered as OMP No.113/2006. After hearing, the same were withdrawn with a liberty to approach the Arbitral tribunal under Section 33 of the Act for correction of the Award. The following order was passed on 24th March, 2006:
“OMP No.113/2006
IA No.3422/2006
Learned senior counsel for the petitioner advanced submissions at length. After hearing, learned senior counsel for the petitioner seeks to withdraw the petition as according to him appropriate remedy would be to approach the Arbitral tribunal under section 33 of the Arbitration and Conciliation Act, 1996 to correct what is claimed to be a typographical error/calculation mistake. Liberty granted.
Dismissed as withdrawn.”
10. In view of the said order, the petitioner filed an application under Section 33(1) of the said Act for correct
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