1. This is a petition under Section 34 of the Arbitration and Conciliation Act, 1996 (‘Act’) by Lift and Shift India Pvt. Ltd. challenging an Award dated 4th November, 2008 passed by the sole Arbitrator in the disputes arising out of the award of a contract by the Respondent Central Warehousing Corporation (‘CWC’) to Natwar Parikh Industries Ltd. (‘NPIL’) by a letter dated 11th June, 1993.

2. At the outset, it requires to be noted that pursuant to a demerger order dated 11th December, 2006 passed by the High Court of Gujarat in Company Petition No. 204 of 2004 connected with a Company Application No. 493 of 2006 as amended on 4th January 2007, the transport division along with its assets, liabilities and cases of NPIL were demerged and transferred to the Petitioner i.e., Lift and Shift India Pvt. Ltd. with retrospective effect from 1st April, 2006. Accordingly, NPIL which was the claimant in the present arbitration proceedings has been substituted by the Petitioner.

Background facts

3. The above Contract awarded by CWC to NPIL involved handling and transportation of ISO containers and allied services at the Container Yard, Jawaharlal Nehru Port (‘CY, JNP’), Railway Siding Container Freight Station (CFS) and in an around the CFS at Dronagiri Node Warehousing Complex, Navi Mumbai (D Node), CFS Export Warehouse, Kalamboli and CFS, Jawaharlal Nehru Port (‘CFS, JNP’) at Navi Mumbai.

4. According to the Petitioner, subsequent to the commencement of the Contract, CWC started deducting, arbitrarily and unjustifiably, amounts from the periodic bills of NPIL on some or the other pretext in breach of the terms of the Contract without assigning any reason. CWC is also stated to have unilaterally closed down the export CFS, Kalamboli in breach of the terms and conditions of the Contract. Further, CWC refused to grant the difference of the price hike of diesel, oil and petroleum products used by the Petitioner for transportation.

5. By letters dated 19th November 1996, 27th December 1996, 3rd February 1997 and 28th April 1997, NPIL sought the appointment of a sole Arbitrator. Initially, on 27th February 1998, CWC appointed one Shri B.K. Sharma as the Sole Arbitrator.

The arbitral proceedings

6. On 17th July 1998, the following claims were filed by NPIL:

“(1) Wrongful deductions on account of movement of containers amounting to Rs. 95,07,460/-

(2) Delay in LCL Destuffing amounting to Rs. 11,82,310/-

(3) Wrongful deductions on account of hiring of equipments amounting to Rs. 58,35,153/-

(4) Recovery on account of Electricity Charges amounting to Rs. 15,12,378/-

(5) Recovery on account of Garage Rent amounting to Rs. 7,50,420/-

(6) Recovery of deductions made on account of damages amounting to Rs. 9,11,665/-

(7) Loss of business revenue on account of the closure of Export CFS at Kalamboli from 01.05.1996 to 03.11.1997 amounting to Rs. 2,29,41,360/-

(8) Compensation for rise in the statutory procurement of price of HSD (Diesel), Oil and other petroleum items amounting to Rs. 60,34,344/-

(9) Interest @ 24% p.a. on the aforesaid sums claimed.”

7. CWC filed a statement of defence and raised counter-claims. On the basis of the pleadings the following issues framed by Shri Sharma:

“(1) Whether deductions amounting to Rs. 95,07,460/- on account of the delay in the movement of containers have been made wrongly? Are the Claimants entitled to the refund?

(2) Was an amount of Rs. 11,82,310/- on account of delay alleged in LCL destuffing deducted wrongfully?

(3) Were deductions amounting to Rs.58,35,153/- wrongfully made on account of hiring of equipments made wrongfully and are the Claimants entitled to its refund?

(4) Was Electricity charges amounting to Rs. 15,12,378/- had been wrongfully recovered from the Claimants and are they entitled to its refund?

(5) Was the recovery of Rs. 7,50,420/- on account of Garage rent made wrongfully and are the Claimants entitled to its refund?

(6) Are the Claimants entitled to the recovery of deductions made on account of damages