MANMOHAN SINGH, J.

1. The petitioner namely, Organizing Committee Commonwealth Games, 2010 has filed the objections/application under Section 34 of the Arbitration and Conciliation Act, 1996 (herein after referred to as “the Act”) for setting aside arbitral award dated 3rd December, 2015 passed by the Arbitral Tribunal comprising of Justice R.C. Lahoti (Retd. Chief Justice of India) (Presiding Arbitrator), Justice Sujata Manohar (Retd. Justice of Supreme Court) (Co-Arbitrator) and Justice Mukul Mudgal (Retd. Chief Justice of Punjab and Haryana High Court) (Co-Arbitrator).

Admitted Facts

2. The petitioner is a society registered under the Society Registration Act, 1860, having its office at Gate No. 25, Jawaharlal Nehru Stadium, Lodhi Road, New Delhi - 110003. The petitioner was formed to lead the planning efforts and to manage the operations and successfully deliver the Commonwealth Games 2010, to be held at New Delhi, in accordance with the rights and obligations conferred and imposed upon it by the Host City Contract entered on 13th November, 2003.

3. The respondent No. 1 is a Joint Venture/Consortium of PICO Hong Kong Limited (Lead Partner), a Hong Kong based company. Respondent No. 2 - Deepali Designs & Exhibits Private Limited, a company registered under the Companies Act, 1956 and is one of the consortium partners and was performa party to the arbitration proceedings and is having its registered office at 9, 1st Floor, Printing Press Area, Wazirpur, behind Punjab Kesan, New Delhi.

4. PICO Event Marketing (India) Private Limited (PIEC) is a subsidiary of Pico Far East Holdings Ltd. (PFE) which is a listed company in Hong Kong with an annual turnover of HK$2.226 billion and profit of HK$124 million for the year 2009. PICO Hong Kong and other subsidiaries of Pico Far East Holdings Ltd. have successfully completed Overlays work for Commonwealth Games in Melbourne, the Olympics in Athens, the Olympics in Beijing and many other world events.

5. The petitioner decided to adopt a cluster-wise procurement on turnkey basis and invited an Expression of Interest ("EOI") on 5th December, 2009.

The Request for Proposal ("RFP") was issued to only four qualified bidders on 16th January, 2010. The bids were invited for appointment of Overlays Providers on turnkey rental basis for supply, installation, testing, commissioning, operation, maintenance, de-commission and removal of Overlays for Cluster I to VII. The term “Overlays” refers to temporary structures such as marquees, tents, pre-fabricated office units, porta cabins/WC units, chairs, fences, barricades, temporary partitions etc.

6. The respondent No. 1 submitted its bid for all 7 clusters including (Cluster I and VI on 26th February, 2010 but was selected for providing overlays for Clusters I and VI being the lowest bidder).

7. During the period 26th March, 2010 to April, 2010, negotiations between the petitioner and the respondent No. 1 took place and the respondent No. 1 submitted its revised price after negotiation. The respondent No. 1’s bid was accepted only for Cluster I and VI on the basis of the revised price.

8. The petitioner issued a Letter of Intent in favour of the respondent No. 1 on 5th May, 2010 accepting the revised price quoted by the petitioner. The total value of the order for Cluster I and Cluster VI was for a value of Rs. 136.73 crores and Rs. 94.03 crores respectively. The letter of intent required the respondent No. 1 to furnish a Performance Bank Guarantee of 10% of the Contract value towards performance security and Bank Guarantee for advance payment of 10% of the contract value for an advance of equivalent amount.

9. The petitioner also issued a letter on 18th May, 2010 in favour of respondent No. 1 and proposed to sign a formal contract with the respondent No. 1. The said letter proposed signing of a turnkey contract on rental basis for Commonwealth Gam