The main legal point established in the judgment is the requirement for the Arbitral Tribunal to provide reasons for its conclusions, as failure to do so can lead to the setting aside of the Award.

1. This petition by National Highways Authority of India/ NHAI under Section 34 of the Arbitration and Conciliation Act, 1996 (‘Act’) challenges the Award dated 12th April 2011 passed by the Arbitral Tribunal (‘AT’) in the disputes between the NHAI and the Respondent MBL Infrastructure Ltd., formerly known as (Maheshwari Brothers Ltd.) arising out of a contract dated 24th August 2006, whereby the work of ‘short term improvement and routine maintenance of section of National Highway No.2 Barwa Adda-Panagarh Section in the State of Bihar and West Bengal was awarded to the Respondent.

2. The period of contract was 12 months from the date of commencement which was 1st September 2006. The contract, therefore, was to expire on 31st December 2007. It is stated that NHAI issued a 'letter to proceed' to the Respondent on 29th August 2006.

3. In terms of the contract, three indents were placed by the NHAI apart from the first draft indent, Indent No. 3A and Indent No. 1A was to be placed on 12th December 2006. According to the NHAI, the Respondent did not carry out any work till 24th January 2007, as per the work programme submitted on 8th September 2006. The second indent was issued on 20th March 2007 which was valid till 19th June 2007. Till 31st December 2007, the value of the work in respect of indent number 2 that was completed only Rs. 3.6 crores as regards Rs. 9.5 crores. The third indent issued on 23rd June 2007 was valid till 31st August 2007.

4. According to the NHAI, no work could be taken up by the Respondent since even the second indent work could not be completed and the period of the contract was extended up to 31st December 2007. The case of the NHAI is that in view of the breaches committed by the Respondent, the NHAI became entitled to recovery of liquidated damages (‘LD’). It is stated by letter dated 27th August 2007, the Respondent requested NHAI for extension of time and further requested that the LD be waived. By letter dated 27th August 2007 the Respondent explained the NHAI the contractual provisions. By a letter dated 28th December 2007, the NHAI terminated the contract.

5. There were nine claims i.e. A-1 to A-9 filed by the Respondent. By the impugned Award dated 12th April 2011, the AT substantially allowed Claims 1A to A-5 and rejected Claims A-6to A-9.

6. As far as the present petition is concerned by the order dated 21st December 2011, the Court issued notice in the present petition confined to the Award in respect of the Claims A-1, A-3 and A-4. The order passed on that date by the Court reads as under:

“1. Mr. Buddy Ranganathan, learned counsel appearing for the Petitioner National Highways Authority of India ('NHAI') seeks to assail the impugned Award insofar as Claim Nos. A-1, A-2, A-3 and A-4.

2. As regards Claim No. 1, it is submitted that the Award is on the face of it erroneous since it fails to note that the machinery could not have been deployed by the Contractor even prior to the Petitioner issuing to the Contractor a letter to proceed. He submits that the Award itself notes, in the list of dates, that the notice to proceed was issued by NHAI on 29th August 2006, and that the Start Date of contract was September 2006 with the end date being 12 months thereafter, i.e., 31st August 2007. The contract was extended up to 31, December 2007. He submits that the Arbitral Tribunal has erroneously allowed Claim No. A-1 for idle plant and machinery which was purportedly deployed at the site from 15th May 2006 to 20th May 2006.

3. As regards Claim No. A-2, it is submitted that no reasons have been given by the Arbitral Tribunal for allowing the claim in regard to the bill IPC-16.

4. As regards Claim No. A-3 concerning the deduction of retention money by NHAI from the bills of the contractor, Mr. Ranganathan referred to the reasons) adduced by NHAI, which have been recorded by the Arbitral Tribunal, that according to the NHAI the work completed by the contractor up to 31'' December 2007 constituted only 45% o