The main legal point established is that an arbitral award must be based on relevant material and evidence, and claims for loss of profit must be substantiated with evidence of missed opportunities.

JUDGMENT

Vibhu Bakhru, J. - The National Highways Authority of India (hereinafter 'NHAI') has filed the present petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter 'the A&C Act') impugning an Arbitral Award dated 05.06.2013 (hereinafter 'the impugned award')passed by the Arbitral Tribunal comprising of three members, Shri P. Sridharan, Sh. Pawan Kumar, and Shri D. Sree Ramamurthy as the Presiding Arbitrator (hereinafter 'the Arbitral Tribunal'). The impugned award was delivered by Shri P. Sridharan and Shri D. Sree Ramamurthy. Sh. Pawan Kumar entered a separate dissenting opinion.

2. The impugned award was rendered in the context of disputes that had arisen between the parties in relation with an agreement dated 26.02.2005 (hereinafter 'the Agreement'). By the impugned award, the Arbitral Tribunal awarded a sum of Rs. 4,69,42,964/- towards the balance outstanding amount for the work of 40 mm thick Bituminous concrete (Dispute no. 4), Rs. 134,75,04,491/- towards the additional costs incurred in the extended period from 15.11.2007 till 23.11.2010 and, Rs. 11,08,93,494 towards the additional costs incurred in the extended period from 24.11.2020 till 02.05.2011 (Dispute no. 5). The Arbitral Tribunal further awarded simple interest at the rate of 10% per annum for the pre-award period and future interest at the rate of 15% per annum from the date of the award till its realization, in case the awarded amount was not paid by NHAI within a period of ninety days.

3. This Court had examined the petitioner's challenge to the impugned award in respect of Dispute No. 4 and by an order dated 13.09.2013, rejected the same. Thus, the principal controversy that remains to be addressed relates to the award for additional costs incurred during the extended period of the contract on account of the delays (referred as Dispute no. 5).

Factual Context

4. NHAI invited tenders for the works regarding "Construction of Chennai Bypass Phase - II Connecting NH-4 & NH-5 and Widening of Chennai Bypass Phase -I connecting NH-45 & NH-4 in Tamil Nadu" (hereinafter 'the Project'), on the terms and conditions stipulated in the Instructions to Bidders (ITB).

5. Pursuant to the aforesaid invitation to tender, the respondent (hereinafter 'HCC') submitted its bid for executing the Project on 15.12.2004. HCC's bid was accepted by NHAI and a contract for implementation of the Project for an amount of Rs. 404,97,93,145/- was awarded to HCC by a Letter of Acceptance dated 25.01.2005 (hereinafter the 'LOA')

6. In terms of the LOA, NHAI called upon HCC to furnish a -Performance Security in the form of an unconditional Bank Guarantee of an amount equivalent to 10% of the contract price, in accordance with Sub-clause 35 of Section I of the ITB and Sub-clause 10 of Section III, Volume I of the Tender Documents, within a period of twenty-eight days after receipt of the LOA.

7. Thereafter, on 26.02.2005, the parties entered into the Agreement for execution of the said Project. In terms of the Agreement, HCC was required to complete the Project within a period of thirty months from the date of commencement of the works. Further, in terms of Clause 47.1 of the General Conditions of Contract (hereinafter 'GCC'), HCC was liable to pay liquidated damages to NHAI in the event of failure to achieve substantial completion within the stipulated period. It was stipulated that the works would be completed on or before 14.11.2007.

8. On 15.05.2005, the Engineer issued a notice to HCC to commence the work. The Project would be completed within the said period of thirty months thereafter.

9. HCC claims that due to certain impediments like delay caused in execution of road works, structures, Adayar Bridge, Porur Bridge, Grade Separator- 1, Cooum Bridge, elevated corridor, rail over bridge, Grade Separator- 2, underpasses and bandas, it was unable to execute the wor