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IN THE HIGH COURT OF DELHI AT NEW DELHI
VIBHU BAKHRU, J.
MONNET ISPAT AND ENERGY LIMITED – Petitioner
Versus
M/S ANEJA CONSTRUCTION (INDIA) LIMITED – Respondent
O.M.P. (COMM) No. 186 of 2017
Decided On : 13-04-2017
Arbitration - Setting Aside - Section 34 of the Arbitration and Conciliation Act, 1996 - 7, 8, 9, 17, 18, 62 - The court discussed the provisions of Section 34 of the Arbitration and Conciliation Act, 1996 and the findings of the arbitral tribunal in detail. The key legal provisions of Section 34 were interpreted and applied in the court's decision to dismiss the petition.
Fact of the Case:
Monnet filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996 to set aside an arbitral award directing Monnet to refund retention money to ACL. The dispute arose from construction work orders issued by Monnet to ACL, followed by allegations of substandard work, abandonment of works, and termination of the contract.
Finding of the Court:
The court found that the arbitral tribunal had thoroughly examined the evidence and material on record and made findings supported by the evidence. The court rejected all contentions raised by Monnet and dismissed the petition.
Issues: The issues included allegations of substandard work, abandonment of works, termination of the contract, and the sharing of the report of defective works with ACL.
Ratio Decidendi: The court's decision was based on the thorough examination of evidence and material by the arbitral tribunal, which led to the rejection of all contentions raised by Monnet.
Final Decision: The petition was dismissed by the court.
I.A. Nos. 4381 & 4382/2017
1. Exemptions are allowed, subject to all just exceptions.
2. The applications are disposed of.
I.A. No. 4383/2017
3. For the reasons stated in the application, the delay of 12 days in re-filing is condoned.
4. The application stands disposed of.
O.M.P. (COMM) No. 186/2017
5. Monnet Ispat and Energy Limited (hereafter ‘Monnet’) has filed the present petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereafter ‘the Act’) for setting aside the arbitral award dated 23.11.2016 (hereafter ‘the impugned award’) delivered (by majority) by the arbitral tribunal constituted by Justice R.C. Chopra (Retired), Col. G.S. Sandhu (Retired) and Justice Anil Dev Singh (presiding arbitrator). The dissenting note was entered by Col. G.S. Sandhu (Retired).
6. By the impugned award, Monnet was directed to refund the retention money amounting to Rs. 98,03,644/- advanced by the respondent, M/s Aneja Construction (India) Ltd. (hereafter ‘ACL’).
7. Brief facts necessary to address the controversy are as under:-
7.1 Monnet had invited proposals ‘for construction of Civil Works at its Sponge Iron, Power Plant and Steel Plant located at Raigarh in Chhattisgarh’ (hereafter ‘the works’). ACL's bid was accepted and the first work order was placed on ACL on 31.08.2005. Thereafter 31 work orders were issued by Monnet upto 04.04.2008. These included work orders relating to (i) construction of roads; (ii) civil construction works at railway siding; (iii) construction of boundary wall; (iv) construction of iron ore yards; (v) construction of development yards and (vii) supply of materials.
7.2 On 14.04.2008, Monnet filed a FIR against the Site In-charge appointed by ACL as well as the Site In-charge and the Assistant General Manager appointed by Monnet. It was alleged that although ACL had not used ‘morrum’ (the specified material) in execution of the works, it had raised bills for the same, which were cleared by the said officers of Monnet as they were in collusion with ACL. Monnet claimed that it had suffered a loss of Rs. 30 lacs.
7.3 Monnet further alleged that ACL had abandoned the works. ACL disputed the same and claimed that Monnet had barred its entry to the site and had also prevented ACL from removing its equipment. By its letter dated 28.04.2008, ACL called upon Monnet to release a sum of Rs. 3 crores against the work done and further put Monnet to notice that if it did not allow ACL to remove the machinery from the premises, Monnet would be liable to pay demurrage charges at the rate of Rs. 2 lacs per day.
7.4 Monnet terminated the contract with ACL by its letter dated 07.05.2008 and called upon ACL to reimburse the amount of Rs. 11,26,57,884/- paid to ACL. In addition, Monnet claimed compensation for the loss allegedly suffered on account of sub-standard work. Monnet also threatened that if ACL did not clear its liability, it would be constrained to dispose of ACL's machinery to set off the amount against ACL's liability.
7.5 Thereafter, with the intervention of Court, the machinery was released to ACL on 09.06.2008. Subsequent thereto, ACL sent a letter dated 17.06.2008 disputing the allegations made and called upon Monnet to release a sum of Rs. 1,14,00,000/- for illegally retaining ACL’s machinery for 57 days.
7.6 ACL also responded to Monnet's termination letter dated 07.05.2008, by a letter dated 22.06.2008 disputing the allegations and raising various claims.
8. After further exchange of correspondence, Monnet invoked the arbitration clause by its letter dated 09.08.2008, pursuant to which, the arbitral tribunal was constituted.
8.1 Before, the arbitral tribunal, Monnet raised the following claims:
Claim no. 1 - Rs. 15,82,08,032/- as refund of the total amount paid to ACL against the work orders along with interest quantified as Rs. 6,97,94,017/-; claim no. 2 - Rs. 18.4 lacs for rectification of railway siding; claim no. 3 - Rs. 14,06,000/- for rectification of iron ore yard and yard development (power); c
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