Rajiv Sahai Endlaw, J.

1. This appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (Arbitration Act) impugns the order dated 10th February, 2014 of the learned Single Judge of this Court of dismissal in limine of OMP No.175/2014 preferred by the appellant under Section 34 of the Arbitration Act for setting aside of the Arbitral Award dated 1st November, 2013.

2. In the light of our recent judgments, (i) State Trading Corporation of India Ltd. Vs. M/s. Toepfer International Asia Pte Ltd.; and, (ii) Delhi State Industrial & Infrastructure Development Corporation Ltd. Vs. M/s Rama Construction Company, dealing with the scope of interference with an arbitral award under Section 34 and in an appeal under Section 37, we heard the counsel for the appellant in extenso at the stage of admission and reserved judgment.

3. The challenge to the arbitral award, before the learned Single Judge as well as before us is on two grounds. Firstly it is contended that the Arbitral Tribunal had no jurisdiction to entertain the claims of the respondent as the same were preferred beyond the time of 120 days prescribed in the contract and the Arbitral Tribunal erred in rejecting the said objection of the appellant. Secondly it is contended that the Arbitral Tribunal erred in assessing the claim of the respondent for price of the items substituted for the items provided for in the contracts at prevailing market rates, applying Sub-Clause (v) of Clause 12 of the Contract, when the same should have been assessed at the rates entered in the current CPWD Schedule of Rates, as provided in Sub-Clause (iii) of the said Clause 12 of the Contract.

4. The arbitral award rejects the objection of the, appellant of the claims being not arbitrable for the reason of having been preferred beyond the prescribed period of 120 days, by observing / holding (i) that the claims were within the prescribed period of limitation under the Limitation Act, 1963; (ii) as per Section 43 of the Arbitration Act, the provisions of the Limitation Act apply to arbitral proceedings also; and, (iii) that the Clause in the Contract providing the period of 120 days, from receiving intimation from the Engineer-in-Charge that the final bill was ready for payment, for preferring the claim is hit by Section 28 of the Contract Act, 1872 and is also void under Section 23 of the Contract Act.

5. As far as the second ground of challenge to the arbitral award is concerned, the arbitral award reasons (i) that the rates could not be determined as per the CPWD Manual since the same was not part of the Contract and hence had to be necessarily determined under Sub-Clause (v) of the Clause 12 which prescribes the measure of prevailing market rates; (ii) that the market rates as claimed by the respondent were less than as verified by the appellant itself; and, (iii) that the rates at which the appellant was offering payment for the substituted items to the respondent were never communicated by the appellant to the respondent during the course of execution of the works and the said rates were adopted by the appellant only at the time of finalization of the bill, much after the date of completion of the works.

Accordingly, the respondent was awarded a total sum of Rs.19,85,974/-besides interest at 9% per annum from the date of the award to the date of payment.

6. The learned Single Judge dismissed the petition under Section 34 of the Arbitration Act holding that there was no reason to interfere with the award since the rates for the substituted item which the respondent had claimed and which had been awarded were lesser than the market rate assessed by the appellant itself and that since the appellant had not intimated/informed the respondent at the time of execution of the works that it will be paying the CPWD rates for the substituted items, the appellant at the time of preparation of the bills could not be permitted to make payment at the CPWD rates.

7. The counsel for the appell