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2018 Supreme(Del) 597

IN THE HIGH COURT OF DELHI AT NEW DELHI
VIBHU BAKHRU, J.
Alpha Services - Petitioner
Versus
Ircon International Limited - Respondent
O.M.P. (COMM) 238 of 2016 & IA No. 5634 of 2016
Decided On : 05-04-2018

Advocates:
Advocate Appeared:
For the Petitioner: Ms. Neelima Tripathi, Ms. Gunjan Singh
For the Respondent: Ms. Leena Tuteja, Mr. Ishaan Chawla, Ms. Diksha Bhatia

Headnote:

Arbitration - EOT Cranes - Arbitration and Conciliation Act, 1996, Section 34 - 2, 48.2, 48.3 - The court discussed the obligations of the parties in relation to the supply of EOT Cranes and the concomitant accessories, including fish plates, rail clamp sets, bolts, and nuts. The court interpreted the relevant clauses of the Purchase Order and the Technical Specification to determine the scope of works and the responsibilities of the parties. The court's decision was influenced by the limited scope of judicial review under Section 34 of the Act and the principle that the arbitrator's interpretation of the contract is final.

Fact of the Case:

The dispute arose from the contract between Alpha and IRCON for the supply of Electric Overhead Travelling Cranes (EOT Cranes) and the disagreement over the obligation to provide concomitant accessories for the installation of the EOT Cranes.

Finding of the Court:

The court found that the obligations of IRCON were limited to providing specific materials and services as per the terms of the contract, and the responsibility for the balance materials and services required for execution of the works rested with Alpha. The court emphasized the limited scope of judicial review under Section 34 of the Arbitration and Conciliation Act, 1996.

Issues: The key issues included the interpretation of the contract terms regarding the scope of works, the obligations of the parties, and the disputed provision of concomitant accessories for the EOT Cranes.

Ratio Decidendi: The court's decision was based on the interpretation of the relevant clauses of the Purchase Order and the Technical Specification, as well as the principle that the arbitrator's interpretation of the contract is final. The court emphasized the limited grounds for interference with arbitral awards under Section 34 of the Act.

Final Decision: The petition was dismissed, and the application was disposed of, with the court affirming the impugned award. Each party was left to bear their own costs.

JUDGMENT :

Vibhu Bakhru, J.

1. The petitioner (hereafter ‘Alpha’) has filed the present petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereafter ‘the Act’) impugning the arbitral award dated 23.12.2015 (hereafter ‘the impugned award’) delivered by the Arbitral Tribunal comprising of a Sole Arbitrator (hereafter ‘the Arbitral Tribunal’). The impugned award was rendered in the context of disputes that had arisen between the parties in relation to the contract entered into by the parties, whereby Alpha had agreed to supply 35 numbers of Electric Overhead Travelling Cranes (hereafter ‘EOT Cranes’) to the respondent (hereafter ‘IRCON’) for the Rail Coach Factory at Raebareli.

2. The principal dispute between the parties relates to the question whether Alpha was obliged to provide fish plate sets, rail clamp sets, bolts, nuts and other concomitant accessories in connection with the rails to be installed for the horizontal (lengthwise) movement of the EOT Cranes. The rails were to be fixed on the Gantry and the EOT Cranes supplied by Alpha would rest on the said Rails. There is no dispute that Alpha was required to erect and carry out the works for fixing of the rails as part of its contract. It is also not disputed that it was IRCON’s obligation to supply the rails. The controversy only relates to the clamps, nuts and bolts which were required to fix the rails on the Gantry and the fish plates that are required to join the sections (pieces) of the Rail. According to Alpha, the contract did not include supply of such concomitant accessories. IRCON disputed the same and claimed that in terms of the contract, the obligation to supply all the materials other than rails rested with Alpha.

3. Briefly stated, the relevant facts necessary to address the controversy are as under:-

3.1 On 21.01.2012, IRCON floated a tender for supply, erection, testing and commissioning of 35 numbers of EOT Cranes for the Rail Coach Factory, Raebareli along with an Annual Maintenance Contract (AMC) for 5 years. Pursuant to the aforesaid invitation, Alpha submitted its bid. The said bid was accepted and IRCON issued a Letter of Acceptance (LOA) dated 14.11.2012. Thereafter, IRCON issued the Purchase Order dated 05.12.2012 (hereafter ‘the Purchase Order’).

3.2 Alpha claims that by February, 2013, two EOT Cranes were ready and it requested IRCON to supply sets of rail, fish plates and rail clamps. This was followed by another reminder on 27.02.2013. IRCON responded to the said letter on 01.03.2013 denying its liability to supply the concomitant accessories in question. Alpha responded by asserting that supply of the accessories was not within its scope of works. It is stated that on 04.03.2013, IRCON sent an email informing Alpha that the matter had been examined by the competent authority and was decided to provide rail fittings (fish plates, bolts, clamps) alongwith rails being provided by IRCON. However, IRCON did not supply the said accessories. Alpha claims that it sent further requests on 06.03.2013, 28.05.2013 and 04.06.2013, for supply on such accessories. IRCON responded to the said requests by reiterating its stand that in terms of paragraph 1.2 and 48.3 of Section 2 of the Purchase Order, the petitioner’s request for free supply of rail fittings was not admissible.

3.3 In view of the controversy that had arisen between the parties, the matter was referred to the sole conciliator. The said proceedings did not fructify in settlement of the disputes. Consequently, the Sole Arbitrator was appointed by IRCON to adjudicate the disputes that had arisen between the parties.

4. Before the Arbitral Tribunal, Alpha made two sets of claims. The first claim related to the recoveries made by IRCON for supply of concomitant accessories, and the second claim related to the value of the materials supplied by Alpha. The arbitral proceedings culminated in the impugned award. The Arbitral Tribunal held that in terms of the Notice Inviting Tender (NIT),















































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