Back
IN THE HIGH COURT OF DELHI AT NEW DELHI
VIBHU BAKHRU, J.
GVK Jaipur Expressway Private Limited - Petitioner
Versus
National Highway Authority of India - Respondent
O.M.P. (COMM) 377 of 2020
Decided On : 29-10-2021
Arbitration and Conciliation Act, 1996 - Section 31(3) and 34 - Indian Contract Act, 1882 - Section 70 - Concession Agreement - Terms of contract - Scope of work - Change of scope notice in terms of its proposal - Whether construction of additional lanes and toll booths fall within scope of Concession Agreement was required to be addressed in light of contentions advanced by both parties - Petitioner’s claim for cost of constructing additional toll lanes was rejected as the Arbitral Tribunal (by majority), inter alia, found that same was covered within the ‘scope of work’ under the Concession Agreement and petitioner was not entitled to any further payment in respect of same - Petitioner submitted the drawings for construction of additional toll lanes at the toll plazas within the available Right of Way (ROW).
Finding of the Court: Arbitral Tribunal has completely ignored the petitioner’s contention regarding the interpretation of Clause 18.4 of Concession Agreement. whatever was required to be done in order to ensure uninterrupted traffic flow during the normal operating conditions was the obligation of the Concessionaire - Court view that impugned award is contrary to the expressed terms of the contract as it ignores Clause 18.4 of the Concession Agreement, which expressly provides that extension of pavements or ‘other civil works’ would not be included as a part of maintenance unless such construction is a part of the project. There is no clause in Concession Agreement, which specified construction of additional toll lanes as a part of the project - Impugned award is set aside.
Result: Petition is allowed.
JUDGMENT :
Vibhu Bakhru, J.
Introduction
1. The petitioner has filed the present petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereafter the ‘A&C Act’) impugning an Arbitral Award dated 02.11.2019 delivered by the Arbitral Tribunal comprising of three members – Justice (Retired) R.C. Jain, Justice (Retired) Devinder Gupta and Justice (Retired) Sunil Ambwani as the Presiding Arbitrator. The impugned award was rendered by majority by Justice (Retired) R.C. Jain and Justice (Retired) Sunil Ambwani concurring. Justice (Retired) Devinder Gupta entered a separate dissenting opinion.
2. The impugned award was rendered in the context of disputes that had arisen between the parties in connection with the Concession Agreement dated 08.05.2002 (hereafter the ‘Concession Agreement’). The petitioner’s claim for cost of constructing additional toll lanes was rejected as the Arbitral Tribunal (by majority), inter alia, found that the same was covered within the ‘scope of work’ under the Concession Agreement and, the petitioner was not entitled to any further payment in respect of the same. The petitioner contends that the said view is patently erroneous and disregards the express terms of the Concession Agreement.
Factual context
3. The parties entered into a Concession Agreement dated 08.05.2002 in respect of in respect of “design, engineering, financing, procurement, construction, operation and maintenance for widening of existing 2 lanes to 6 lanes divided carriageway facility including rehabilitation of existing 2-lanes from KM 273.500 to KM 363.885 km on Jaipur-Kishangarh Section of National Highway-8 in Rajasthan” on Build, Operate and Transfer (BOT) basis (hereafter the ‘Project Highway’).
4. Admittedly, the Concession Agreement was divided into two phases. First, being the construction phase and the second, being the operation and maintenance phase. The entire construction of six-lanes of the Project Highway was to be completed by the Commercial Operation Date (COD). In terms of the Concession Agreement, ‘construction period’ began from the appointed date (that is, the date on which the concession period commenced) and ended on the COD. The construction period ended on 20.10.2005 with the Independent Consultant (IC) issuing a Final Completion Certificate. There is no dispute that the petitioner had completed the construction of the Project Highway, in terms of the Concession Agreement, prior to the COD.
5. However, the obligations of the petitioner under the Concession Agreement did not end with the issuance of the Final Completion Certificate. It was also required to operate and maintain the Project Highway in terms of the said Concession Agreement.
6. The project review meetings were held between the parties periodically and, the issue of increase in traffic volume was discussed at the said meeting. The increase in the volume of traffic was due to congestion at the toll plazas and this was a matter of concern for the parties. One of the solutions, as discussed, was to increase the number of toll lanes required to accommodate the volume of traffic at the toll plazas. The petitioner had commissioned a consultant (M/s Consulting Engineering Group Limited) to prepare a comprehensive report with regard to the volume of traffic and to also suggest the number of lanes required to accommodate the projected traffic volume.
7. News items regarding congestion at toll plazas resulting in inconvenience and delays to users were reported in various newspapers. In this context, the IC sent a letter dated 02.06.2012 advising the petitioner to explore the possibility of providing additional toll lanes at the two toll plazas in question. Thereafter, on 18.06.2012, the petitioner sent a proposal for increasing the number of toll lanes. The petitioner also pointed out that the issue regarding the requirement of additional toll pl
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
