The court's decision emphasized the importance of interpreting the contractual clauses and the relevance of documentary evidence in arbitration proceedings.

1. These are three petitions by the Chennai-Ennore Port Road Company Ltd. (‘CEPRCL’) under Section 34 of the Arbitration and Conciliation Act, 1996 (‘Act’) challenging three separate Awards rendered by the Arbitral Tribunal (‘AT’) in three references made to it regarding disputes that arose between the Petitioners and the Respondent RDS Project Ltd. (‘RDSPL’) out of a formal agreement signed between them on 20th May 2003 for execution of ‘Sea Protection work along the Ennore Expressway’ in Chennai.

Background

2. The Petitioner is a Special Purpose Vehicle of the National Highways Authority of India (‘NHAI’). Clause 1.1 of the agreement defines the scope of works. The Petitioner was required to construct 10 Groyne rigid hydraulic wooden/concrete structures built to interrupt water flow and limit the movement of sediment in sea/ocean which are found used in tandem with seawalls.

3. Under Clause 1.1 of the agreement, the scope of works was specified as under:

(i) Identification of quarries for supply of stones of required specifications.

(ii) Arranging transportation of these stones from the quarries to the work sites and

(iii) Construction of Groynes according to the specific design, standards and specifications.

4. There were three separate schedules of quantities for Groyne Fields. Schedule A1 specified the quantities for Groyne Fields I and II. Schedule A2, the quantities for construction of 500m long sea wall north of the northern most Groyne No. 6 in Groyne Field I and Schedule A3, the quantities for strengthening of sea walls between groynes in Groyne Field I and Groyne Field II.

5. Since the construction was peculiar as it was to be carried out underwater, the contract provided for separate bills of quantities (‘BOQs’) for different layers of the work to be constructed by the Respondent. The quantities were to be paid in metric tons (‘MT’) basis and this would account for the fact that there was a difference in the quantities of stones brought on site and those forming part of the finished work since there could be some amount of stones that would sink with the waves. The method for measuring the executed quantities for the purposes of payment under the BOQ was also provided in the agreement.

6. The layers were distinguished from each other by the type and quality of stones to be used. The layers were divided into toe layer, filter layer, core layer and armour layer. As regards the method for measuring executed quantities for the purposes of payment, the contract provided that first calculation of theoretical quantities of the stones to be used in any particular layer in the works which was based on the cross section of the layer as provided in the relevant drawings was to be carried out. The volume of any particular layer had to be ascertained from the approved drawings and the cross sections and then multiplying the said volume in cubic meters by the layer specific multiplier units provided in the contract in order to arrive at the theoretical quantities in MT. Thereafter the theoretical quantities were to be compared with the actual weighted quantities of different stones brought to the site. The correct executed quantities of different categories were to be limited for the purposes of payment to 10% excess over the theoretical quantities.

7. During the progress of the works, on account of the site conditions, changes were made to the original drawings. A new layer called the secondary layer was added to the scope of works.

Proceedings before the AT

8. During the execution of the work, certain disputes arose between the parties and were referred to arbitration under three different references to the same AT.

9. The Petitioner filed an application under Sections 12 and 13 of the Act challenging the continuation of one of the Arbitrators. After the said application was rejected by the AT, the Petitioner filed OMP No. 458/200