The court found no grounds for interference with the arbitration award, emphasizing the importance of upholding the arbitrator's decisions and the need for parties to raise objections at the appropriate time.

1. This is a petition by Tehri Hydro Development Corporation Limited (THDC) against the Respondent, M/s Bhagirathi Builders Engineers and Contractors, under Section 34 of the Arbitration & Conciliation Act, 1996 (‘the Act’) challenging an Award dated 22nd September, 2007 passed by the Sole Arbitrator.

Background facts

2. THDC invited tenders for construction of 100 houses for economically weaker sections including civil and electrical works. By a letter dated 22nd June, 1995, the said work was awarded to the Respondent. The work was to be completed in 9 months i.e., by 25th March, 1996. Later, the period was extended to 15 months and it was to be completed by 25th September, 1996. The total value of the work was revised to Rs.1,96,05,639/-.

3. When disputes arose between the parties during execution of the contract, the Respondent filed Arbitration Application No. 70 of 1998 in this Court under Section 11 of the Act. In the said application, inter alia, the Respondent set out Section 20.1 of the terms and conditions applicable to the contract between the parties which reads as under:

“20.0 Settlement of disputes and arbitration

20.1 It is specifically agreed so and between the parties that all the differences or disputes arisen out of the contract or touching the subject matter of the contract shall be decided by process of settlement and arbitration as per clause 56.0 of General Conditions of Civil Works and Provisions of Indian Arbitration Act 1940 shall apply and Delhi/Lucknow Court only shall have jurisdiction over the same. The arbitration shall give reasoned award.”

4. The said application also set out the summary of the claims of the Respondent. There were 10 claims aggregating to Rs.61,10,537/- together with interest @ 24% compounded quarterly from 26th September, 1997 till the date of payment. It was stated in the said application that the Respondent had invoked arbitration clause by a letter dated 8th October, 1997 and a further reminder dated 18th December, 1997 but that THDC had not responded thereto. The said petition was disposed of vide order dated 24th July, 2000 and a former Judge of this Court was appointed as the Sole Arbitrator.

5. The said Sole Arbitrator passed an Award on 24th September, 2003 (hereafter the 'First Award'). The summary of the First Award is as under:

The First Award