The main legal point established in the judgment is the interpretation of the Concession Agreement, specifically the provisions related to the payment of Annuities and the role of the Third Party Engineer (TPE) in issuing certificates for work completion.

Navin Chawla, J.

This petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the "Act") has been filed by the petitioner challenging the Arbitral Award dated 05.10.2018 passed by the Sole Arbitrator adjudicating the disputes that had arisen between the parties in relation to the Concession Agreement dated 19.07.2011 for Redevelopment and Management of Narela Industrial Estate, Delhi.

2. Pnc Infratech Ltd. was the successful bidder for the said work, while the respondent is the Special Purpose Vehicle formed by the said bidder for the purposes of the Concession Agreement.

3. The primary dispute between the parties before the Arbitrator was on a claim of Annuities payable to the respondent by the petitioner under Claim no.1. The Arbitrator in his Impugned Award has held that the respondent was entitled to claim Annuities with effect from 01.11.2013 as the Provisional Certificate of Completion was issued by the Third Party Engineer (TPE) with effect from 31.10.2013.

4. The learned counsel for the petitioner submits that in passing the above Award, the Arbitrator has misinterpreted Section 11.7 of the Concession Agreement which not only mandates the respondent to maintain books of account but also provide all such documents to the Auditor appointed by the petitioner to conduct an audit of the concessionaire's books of account. She submits that the respondent was in breach of this condition and, therefore, was not entitled to claim Annuities.

5. In support of her submission she also relies on Section 12.1 to submit that as the respondent had failed to perform its obligations under the Agreement, which is a pre-condition for payment of Annuities, the respondent was not entitled to claim Annuities.

6. Section 11.7 and Section 12.1 of the Concession Agreement are reproduced here-in-below:

"12.1 Annuity

In consideration of the Concessionaire accepting the Concession and undertaking to perform and discharge its obligations in accordance with the terms, conditions and covenants set forth in this Agreement, and subject to: (i) the provisions of this Agreement, and (ii) the Concessionaire achieving Annuity Commencement Date, DSIIDC agrees and undertakes to pay to the Concessionaire, on the Annuity Commencement Date and on each subsequent Annuity Payment Date as set forth in Schedule 13 ("Annuity Payment Schedule"), the sum of Rs.21.5 Cr. (Rupees Twenty One Crore Fifty Lakhs Only) (the "Annuity") as set forth in its Bid."

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"Section 11.7 Audit and Account

(a) Appointment of Auditors

(i) The Concessionaire shall appoint and have during the subsistence of this Agreement, as its statutory auditors, a reputed firm of chartered accountants duly licensed to practice in India. All fees and expenses of the statutory auditors shall be borne by the Concessionaire.

(ii) Any claim or document provided by the Concessionaire to DSIIDC relating to receipts, income, payments, costs, expenses, accounts or audit, and any matter incidental thereto, in connection with the Project shall, be valid and effective only if effective by the Concessionaire's statutory auditors.

(b) Maintenance of Accounts

(i) The Concessionaire shall, during the subsistence of this Agreement, maintain books of account recording all its' receipts from all sources derived or on account of the Project, income, expenditure, payments and assets and liabilities, on accrual basis in accordance with this Agreement, the Applicable Laws, applicable accounting standards and Good Industry Practice. The Concessionaire shall provide DSIIDC 2 (two) copies of its audited balance sheet and profit and loss account along with a report thereon by its statutory auditors, within 120 (one hundred and twenty) days of the close of the Accounting Year to which they pertain,

(ii) The Concessionaire shall establish and maintain a quarterly reporting system to provide storage and ready retrieval of data related to the construction and operation of the Project in a forma