YOGESH KHANNA, J.

1. This appeal challenges the judgment dated 01.03.2017 passed by the learned Single Judge in OMP(COMM) No.281/2016 whereby the learned Single Judge had rejected the claim of the appellant qua the liquidated damages, primarily, on the ground that time was never an the essence of the agreement.

2. The brief facts are on 09.04.2010, the appellant had entered into a Memorandum of Understanding (MOU) with the Andaman and Nicobar Administration for introduction of seaplane operations in Andaman & Nicobar Islands with a validity period of five years. The use of a seaplane was contemplated to connect popular tourist destinations in the Andaman & Nicobar Islands. Subsequently, PHHL floated a global tender inviting bids for Wet lease of an amphibian seaplane; (with passenger capacity of 5-10) for an initial period of six months with an option to extend for a further period of six months. The bidders-were required to mobilize the seaplane at Port Blair within a period of 75 days from the issue of Letter of Intent (LOI).

3. Maritime submitted its bid pursuant to the aforesaid invitation, which was accepted and the LOI was issued by PHHL to Maritime on 13.09.2010. In terms of the instructions issued by PHHL, the bids were to be split into fixed monthly charges (FMC) and flying hourly charges (FHC). In terms of the Agreement between the parties, Maritime was entitled to FMC of Rs.49,07,270/- and FHC of Rs.49,250/- per hour inclusive of service tax and other taxes. Admittedly, Maritime was obliged to mobilize the seaplane by 25.11.2010; that is, within a period of 75 days from the issuance of the LOI.

4. It is not disputed that Maritime had failed to mobilize the aircraft within the period of 75 days as agreed. The aircraft arrived in Mumbai on 30.11.2010 and was cleared by the Customs on 03.12.2010. Maritime applied for the necessary permissions from Directorate General of Civil Aviation (DGCA), however, that, took some time; the aircraft was finally delivered to PHHL on 24.12.2010. The Non Scheduled Operators Permit (NSOP) was received, from DGCA on 07.01.2011 and the No Objection Certificate (NOC) for operation of the seaplane to and fro from Port Blair to Havelock water aerodrome was received on 19.01.2011. The flight could only be operated from 20.01.2011.

5. In view of the delays, PHHL issued a letter dated 10.12.2010 permitting Maritime to mobilize the seaplane at Port, Blair, albeit, with levy of liquidated damages. The parties then entered into a formal contract on 14.02.2011 (hereafter ‘the Agreement’). However, on 27.04.2011, PHHL issued a notice for discontinuation of services under clause 14 (14.2) of the Agreement, effective 15 days from 28.04.2011. On 28.07.2011, after the Agreement was terminated, PHHL informed Maritime about the levy of Rs.88,49,043/- as liquidated damages. At the material time, a sum of Rs.76,62,429/- was admittedly payable by PHHL to Maritime. PHHL sought to adjust the aforesaid sum and demanded the balance payment of Rs.11,86,614/- which was paid by Maritime under protest.

6. Maritime also raised an invoice of Rs.1,29,83,285/- for 263.62 flying hours. It claimed that PHHL had assured at least 100 hours of flying per month, and the actual flying hours during the term of the Agreement were only 117.38 hours which were short by 263.62 hours (computed on the basis of 100 flying hours per month). Maritime also raised another bill for a sum of Rs.l,07,64,334/- towards FMC from 13.05.2011 to 18.07.2011, being the unexpired period of the Agreement. In addition Maritime also raised a bill of, Rs.l,09,62,097/- for FHC for the period 13.05.2011 to 18.07.2011, the unexpired period of the Agreement.

7. Since the disputes had arisen the respondent invoked the arbitration clause by its letter dated 08.08.2011. Justice Manju Goel (Retd.) was appointed as a sole arbitrator. She accepted Maritime's claim for refund of liquidated damages for several reasons (a) the seaplane operation could not be mobil