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2014 Supreme(Del) 1884
High Court of Delhi
SANJEEV SACHDEVA, J.
National Highways Authority of India
Versus
M/s. Sricon Infrastructure Pvt. Ltd.
OMP. No. 632 of 2009
Decided on: 08-08-2014
For the Petitioner:Saurabh S. Sinha, Arijit Mazumdar, Advocates.
For the Respondent:Ravi Gupta, Sr. Advocate with Rajul Srivastav, Advocates.
The court emphasized the limited scope of judicial interference under Section 34 of the Arbitration & Conciliation Act, highlighting that the court's role is not appellate in nature and it cannot interfere with an Award merely because another view is possible.
Headnote:
Arbitration & Conciliation Act - Setting aside Award - Section 34
Fact of the Case:
The Petitioner filed a petition under Section 34 of the Arbitration & Conciliation Act, 1996 to set aside an Award and notice amending the Award. The dispute arose from a contract for rehabilitation and improvement of a highway section. The Petitioner contended that the Award was against public policy and arbitrary, while the Respondent claimed the Award was well reasoned.
Finding of the Court:
The court analyzed the evidence and found that the Arbitral Tribunal extensively considered the pleadings, evidence, and submissions of the parties. It held that the Award was based on the material placed before the Arbitral Tribunal and was a well-reasoned Award. The court emphasized that its role was not appellate in nature and it could not interfere with the Award merely because another view was possible.
Issues: The court framed issues related to compensation events, resources and efficiency, additional/varied works, and financial compensation. It found that the delay in completion of work was not attributable to the Respondent and that the Claimant was entitled to financial compensation for various compensation events.
Ratio Decidendi: The court held that the Arbitrator's decision was based on expert technical knowledge and industry practices, and it was not in violation of the terms of the contract. It emphasized that pure questions of fact cannot be disturbed under Section 34 of the Arbitration Act.
Final Decision: The court dismissed the petition, finding no merit in the objections raised by the Petitioner to set aside the Award.
Sanjeev Sachdeva, J:
1. The Petitioner has filed the present petition under Section 34 of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as the Act) for setting aside Award dated 03.06.2009 alongwith notice dated 11.06.2004 amending the Award dated 03.06.2009.
2. The Arbitral Tribunal by the Award dated 03.06.2009 had awarded to the Respondent/Claimant a sum of Rs.1366.23 lakhs alongwith future interest @ 12% from three months from the date of the Award. By notice of making correction dated 11.06.2009, the Arbitral Tribunal has corrected the Award and enhanced the awarded amount to Rs.1369.57 lakhs.
3. As per the Petitioner, in the year 2005, bids were invited by the Petitioner for rehabilitation and improvement of pavement for Gurgaon-Kotputli-Amer Section of National Highway-8 from Km 42.00 to Km 248.00.
4. It is contended that there were certain errors in the notice inviting tender and, accordingly, on 18.03.2005, the Petitioner informed the responsive bidders that the unit of item 10 of Bill of Quantities was inadvertently mentioned as Sqm. instead of Cum. The bidders were requested to submit bids as per the amended bill of quantity.
5. The Respondent amongst other submitted its bid. The bid of the Petitioner was accepted and Contract Agreement dated 17.05.2005 was executed between the Petitioner and the Respondent.
6. Certain disputes arose between the parties during the course of execution of the contract which in terms of the agreement were referred to the Engineer. The claims raised by the Respondent were rejected by the Engineer by his letter dated 02.02.2007 and thus notice of its intention to commence the arbitration against Engineer’s decision was issued by the Respondent.
7. The Arbitral Tribunal consisting of sole Arbitrator was constituted with the consent of the parties. The Respondent filed its statement of claim. The Petitioner submitted its statement of defence. After detailed examination of the claim and its supporting documents, the response of the Petitioner and its supporting documents and after considering the submission of the parties, the Arbitral Tribunal by the Award dated 03.06.2009 awarded a sum of Rs.1366.23 lakhs.
8. By notice of making correction to the Arbitration Award dated 11.06.2009, the Arbitral Tribunal made 23 corrections to the Award and enhanced the awarded amount to Rs.1369.57 lakhs from 1366.23 Lakhs.
9. The Petitioner has contended that the arbitral Award is against public policy and arbitrary and without any basis in law and fact. It is contended that there are illegalities committed by the Arbitral Tribunal in all and the Award is contrary to facts and law. It is contended that the Award is against public policy as it violates the provisions of the Act that make it mandatory for the Arbitrator to deal with and record findings with regard to the documents and evidence produced by the parties.
10. It is further contended that the fact that 23 corrections were made to the Award shows that there is complete non-application of mind. It is submitted that the Arbitral Tribunal could not have corrected or amended the Award after publishing the same on 03.06.2009 as the Tribunal had become functus officio.
11. It is contended that the findings of the Arbitral Tribunal is dehors the express contractual provisions that mandate that the employer is the final authority to grant the extension of time and the Engineer has power only for recommendation to the employer (Respondent). The extension of time granted by the Engineer was contrary to facts.
12. The Respondent has opposed the petition and has contended that the Award is based on the material placed before the Arbitral Tribunal and is a well reasoned Award. It is contended that the contract document defined the scope of the work to be executed under the contract and the type of treatments to be adopted for various stretches were clearly defined.
13. It is contended that the time for completion of work was nin
