VIBHU BAKHRU, J

1. North Delhi Municipal Corporation (hereafter 'NDMC') has filed the present petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereafter 'the Act') for setting aside the interim award dated 29.04.2016 (hereafter 'the impugned award') made and published by the Sole Arbitrator.

2. The Arbitrator has awarded a sum of Rs.12,30,85,293.44 (Rupees Twelve Crores Thirty Lakhs Eighty Five Thousand Two Hundred Ninety Three and forty four paise only) in favour of the respondent (hereafter 'IJMC') as the Arbitrator found that the said amount was admittedly payable to IJMC. NDMC disputes the above reasoning as it claims that in terms of the contract between the parties, NDMC is entitled to withhold the amounts, admittedly, payable to IJMC against its claims and, therefore, the impugned award is contrary to the terms of the contract between the parties.

3. Briefly stated, the relevant facts necessary to address the controversy are as under:-

3.1 NDMC is a corporation established under the Delhi Municipal Corporation Act (Amendment) Act, 2011 and is engaged in providing civic amenities within the specified areas. IJMC is a company incorporated under the laws of Malaysia and is, inter alia, engaged in the business of construction, property development infrastructure, concessions, plantations, etc.

3.2 NDMC (its predecessor) invited bids for construction of a Civic Centre at Jawahar Lal Nehru Marg, Minto Road, New Delhi. The said Civic Centre Complex is spread over an area of 11.97 acres and included construction of multi storey buildings (hereafter 'the project'). IJMC was one of the three qualified bidders who bid for the project. The technical bids submitted by the tenderers were opened on 25.01.2005 and the financial bids were opened on 17.02.2005. IJMC’s bid was the lowest and after negotiations, it was awarded the contract for the project. The letter of intent (LOI) was issued on 30.03.2005 and Work Order was issued on 25.04.2005. Thereafter, IJMC commenced execution of the works on 05.05.2005. The Contract was entered into between the parties on 21.05.2005 (hereafter 'the Agreement').

3.3 Certain disputes arose between the parties and IJMC invoked the arbitration clause. Pursuant to the aforesaid invocation, NDMC appointed Sh Dipak Mukhopadhyay, former Engineer-in-Chief (retired), MCD as the Sole Arbitrator.

3.4 IJMC filed its statement of claim before the Arbitrator raising 21 claims aggregating a sum of Rs.306.82 crores besides interest and costs of arbitration. NDMC also filed counter claims which includes a sum of Rs.648 crores (Counter claim No.1) on account of alleged loss of revenue suffered by NDMC on account of delay in handing over part of the building to Income Tax Department.

3.5 The claims filed by IJMC includes a claim of Rs.83.29 crores on account of non-payment of price escalation up to July, 2012 (claim No.1); Rs.32.19 crores towards payment of RA bill Nos. 74 & 75 for work done but not paid (Claim No.8); and Rs.42 lakhs on account of excess recovery of steel reinforcement from RA bill No. 71 (claim No.19).

3.6 After the pleadings were complete before the Arbitrator, IJMC submitted an application under Section 31(6) of the Act read with Order XII Rule 6 of the Code of Civil Procedure, 1908 before the Arbitrator to make an interim award in its favour with respect to the following sums admitted by NDMC:-

“a. Rupees Two Crores Thirty Lacs Seventy Four Thousand Seven Hundred Sixty Seven and Paise Forty Four (Rs.2,30,74,767.44p) against Claim No.1

b. Rupees Six Crores One Lakh One Thousand Twenty Three (Rs.6,01,01,023.00p) and Rupees Nineteen Crores Fifty Six Lakhs Eight Thousand Nine Hundred Seventy Seven and Paise Eighty Eight (Rs.19,56,08,977.88p) against Claim No.8

c. Rs.32,14,440.43 (Rupees Thirty Two Lakhs Fourteen Thousand Four Hundred and Forty Only) against Claim No.19.”

4. The Arbitrator considered the pleadings and concluded that a sum of Rs.2,30,74,767.44 had been clearly admit