The court will not interfere with an arbitration award unless it is not in accordance with the law or the contractual terms, and the decision must be possible and plausible.

VALMIKI J. MEHTA, J (ORAL)

1. This is a petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘the Act’) seeking to set aside the Award dated 12.02.2007 and the amended Award dated 02.04.2007 with respect to two claims which have been awarded to the respondent/contractor. The first claim is the claim with respect to the construction of a viaduct instead of a reinforced earth structure, and consequently the respondent/contractor is claiming cost of the viaduct as a new item being not covered in the contract. The second dispute pertains to the respondent/contractor claiming reinforcing elements included in the reinforced earth walls which have to be constructed under the contract.

2. The Contract in question is dated 10.08.2001. It was for a sum of Rs.158,80,42,413/- for construction of a segment of Lucknow Bypass connecting NH-25 and NH-28 via NH-56 passing through Lucknow City in the State of U.P. (Contract Package No.EW 15 UP). The salient dates with respect to the Contract in question are as follows:-

3. The Contract in question was an item rate contract containing quantities as well specifications of the contract.

4. With respect to the issue of the claim of the cost of a viaduct constructed, the facts are that from km. 1.400 to km. 2.920 the petitioner/owner directed construction of a viaduct in place of the reinforced earth structure. As per the petitioner/owner in terms of the meeting held on 29.11.2003 the respondent/contractor agreed that the respondent/contractor will not claim viaduct as a new item. Accordingly, petitioner/owner contended before the Arbitration Tribunal that construction of a viaduct should not be taken as a new item but should be taken as an item of reinforced earth walls and payment should only be made in terms of the contract as per the item rates as provided therein.

5. The Arbitration Tribunal considered this claim and held that once the work in question under the contract is written as a reinforced earth work, a direction to instead construct a viaduct would if not be a new item of work will be at least a varied item of work. The Arbitration Tribunal therefore treated the work as a varied item of work and in terms of the contractual provisions accordingly passed an Award with respect to a viaduct treating the same to the extent of quantities up to 125% (limit provided under the Contract for an item to be done at contractual rates) as per the rates provided in the Contract by virtue of Clauses 1.1, 38.1 and 40.2 of the Contract and beyond that at higher rates than the contractual rates. The relevant portion of the Award is contained in para 8.4.2 and para 10.1 thereof and which paras have been reproduced by the petitioner/owner in its petition as under:-

“Para 8.4.2

(iv) A closer look at the wording of the Clause No.9 of the Contract data would reveal that the Road works and Bridge works mentioned thereunder were required to be carried out in accordance with the drawings and provisions of the contract. At the stage of signing the contract, the drawings and Bill of Quantities provided in the contract did not envisage construction of a viaduct, but envisaged construction of RES between chainage Km. 1.400 to Km. 2.920. Thus it is clear that the construction of the said viaduct is outside the original scope of the Contract. It could be brought within the scope of the contract by mutual consent of the parties to agree to a variation, whi