The withdrawal of one of the Arbitrators did not invalidate the award, and the majority members of the Arbitral Tribunal were entitled to render the award.

Rajiv Shakdher, J.

Prefatory Facts

This is a petition preferred under (hereafter referred to as “1996 Act”) to assail the majority Award dated 3 February 2016.

1.1 Shorn of verbiage, the instant petition has been filed in the background of the following facts:

2. On 27 July 1995, the respondent i.e. Union of India (hereafter referred to as “UOI”), had floated a tender for procurement by way of financial lease, 4000 wagons under a Build-Own-Lease-Transfer Scheme (in short “BOLT Scheme”). The wagons, which were to be supplied, consisted of two types i.e. open and covered wagons. The petitioner i.e. CIMMCO LTD (hereafter referred to as “CIMMCO”), submitted its bid against the aforementioned tender. CIMMCO's bid having been found suitable was accepted by UOI.

3. Accordingly, a Letter of Intent dated 18 March 1996 (in short “LOI”) was issued in favour of CIMMCO for leasing 1000 open wagons and 200 covered wagons under the BOLT Scheme at the rates and on the terms stipulated therein.

4. In order to fund the manufacture of the wagons as stipulated in the LOI, CIMMCO tied up with four Financial Institutions(FIs)/Banks to provide funds, albeit, via a lease finance arrangement.

4.1 Consequently, CIMMCO entered into four separate Principal Lease Agreements (PLA) with the following FIs/Banks:

(i) Industrial Development Bank of India Limited (in short “IDBL”);

(ii) SBI Capital Markets Limited (in short “SCML”);

(iii) Development Credit Bank Limited (in short “DCBL”); and

(iv) State Bank of India (Leasing Group) (in short “SBI”).

4.2 The details of the PLAs executed between CIMMCO and the aforementioned FIs/Banks, albeit, in a tabular form, are given hereafter:

S. No.	Name of FI/bank	Date of PLA
1	IDBI	21 May 1997
2	SCML	08 September 1997
3	DCBL	09 October 1997
4	SBI	17 October 1997

5. Given the aforesaid arrangement arrived at between CIMMCO and the FIs/Banks, CIMMCO and UOI entered into, in the first instance, a Sub-Lease Agreement dated 28 May 1997 (in short “SLA”), This was followed by UOI placing an order dated 16 September 1997 CIMMCO for sub-leasing wagons. Besides this, CIMMCO and UOI executed between themselves three more Sub-Lease Agreements. The details of these Sub-Lease Agreements including the number and type of wagons are given as under:

S. No.	Date	Lessor	Equipment/BG Wagon	Quantity of wagons
1.	20 October 1997	SBI	BCNA bogie (Covered wagons)	200
2.	20 October 1997	SCML	BOXN bogie (Open wagons)	206
3.	20 October 1997	DCBL	BOXN bogie (Open wagons)	107

5.1 By virtue of the SLA, UOI sought sub-lease of 687 wagons; the cost of acquisition qua which was pegged at Rs.11,50,000/- per wagon.

5.2 It appears that UOI enhanced its requirement and, accordingly, an amended order was issued in that behalf on 17 November 1997.

5.3 In terms of the aforementioned amendment order, UOI sought to take on sub-lease 1000 open wagons and 200 covered wagons. The cost of acquisition for open wagons, though, remained identical to what was communicated earlier i.e. Rs.11,50,000/- per wagon.

5.4 Insofar the covered wagons were concerned, the cost of acquisition was pegged at Rs.12,50,000/- per wagon.

6. It may be relevant to note at this stage itself that for manufacturing 1200 wagons, CIMMCO required 4800 wheel sets (as each wagon would require four wheel sets) of requisite specifications as provided in the contract obtaining between itself and UOI. Notably, out of the 4800 wheel sets, CIMMCO, on its own, was able to arrange only 1800 wheel sets. There was, thus, a shortfall of 3000 wheel sets.

6.1 CIMMCO, it appears, sought UOI's help in that behalf. According to CIMMCO, UOI loaned 3000 wheel sets from its own stock.

6.2 This apart, CIMMCO, apparently, also entered into a High Seas Sale Agreement dated 17.03.1999 (“HSSA”) with the UOI for supply of 3000 wheel sets.

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