The main legal point established in the judgment is the court's affirmation of the Arbitrator's findings based on the relevant statutory notifications and the contract provisions, and the court's dismissal of the petitioner's objections.

MANMOHAN SINGH, J.

1. The petitioner has filed the objections under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the “Act”) for setting aside the impugned award dated 26th June, 2015.

2. The admitted and relevant facts of the case are that the petitioner and the respondent entered into a contract dated 28th February, 2009 for provision of OTM Accommodation for CASD at Delhi Cantt-10, CA No.CEDZ-27 of 2008-09 (hereinafter referred to as the 'contract').

2.1 The estimated contract price was for an amount of Rs.6,20,75,026.71/-.

2.2 The period of completion of the work was 15 months; with the scheduled date of start of the work being 14th March, 2009 and the scheduled date of completion being 13th June, 2010.

2.3 The period of completion of the work was subsequently extended by the respondent and the work was actually completed on 21st February, 2012.

2.4 Certain disputes and differences arose between the parties during the execution of the work.

2.5 In terms of the conditions of the contract entered into between the parties, the Engineer-in-Chief, Army HQ, New Delhi vide letter No.23600/WC/895/07/E8 dated 5th March, 2013 appointed a serving Chief Engineer (Contracts) of the respondent as the Arbitrator to adjudicate the controversy between the parties.

2.6 After hearing both the parties and perusing the evidence on the record, by means of the impugned arbitral award dated 26th June, 2015, few claims of the respondent i.e. Claim Nos. 1, 2, 3, 5 and 11 have been partially allowed by the Arbitrator whereas Claim Nos. 4, 6, 7, 8, 9, 10 and 12 have been rejected. The Arbitrator has also partially allowed the counter-claim of the petitioner, however the counter-claim is not the subject matter of the present petition.

3. During the hearing held on 18th July, 2016, the learned counsel for the petitioner had restricted the challenge to the arbitral award to the amounts awarded by the Arbitrator under Claim Nos.5 and 11 only. Counsels for both the parties were therefore heard on the said date in relation to Claim Nos. 5 and 11.

4. The Claim No.5 pertains to the claim for material and labour escalation raised by the respondent whereas Claim No. 11 pertains to the claim for past, pendente-lite and future interest as claimed by the respondent.

5. The Arbitrator by means of the impugned arbitral award dated 26th June, 2015 had partially awarded the aforesaid claims in favour of the respondent.

6. Claim No. 5 as preferred by the respondent relates to the component of escalation. It is not in dispute that Clause 63 of IAFW-2249 forming part of the Contract agreement contemplates adjustment of the contract price in the light of increase in prices. The relevant portion of the said clause has been reproduced here as under:

"63. Reimbursement/refund on variation in price-if during the progress of the works the price of any materials required to be incorporated in the Works (not being a material supplied from the G.E's stores in accordance with condition 10 hereof) and/or wages of labour increases as a direct result of the corning into force of any fresh law or statutory rule or order (but not due to any changes in sales tax) and such increase exceeds ten per cent. Of the price and/or wages prevailing at the time of acceptance of the tender for the Work and the contractor (hereupon necessarily and properly pays, in respect of that material (incorporated. In the Works) such increased price and/or in respect of labour required for and engaged on the execution of the work such increased wages, then the amount of contract shall accordingly be varied protanto, provided always that any increase so payable is not in the opinion of the C.W.E (whose decision shall be final and binding) attributable to delay in the execution of the contract within the control of the Contractor.

Provided, however, no re-imbursement shall be made, if the increase is not more than 10% of the said prices. Wage and if so, the re-imbursements sha