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2021 Supreme(Del) 1312
IN THE HIGH COURT OF DELHI AT NEW DELHI
Vibhu Bakhru, J.
Sms Water Grace Bmw Pvt. Ltd. - Appellant
Versus
Govt Of NCT Of Delhi Directorate Of Health Services - Respondent
Original Miscellaneous Petition (COMM) No. 537 of 2020
Decided On : 13-12-2021
Darpan Wadhwa, Advocate, Sandeep Das, Advocate, Sitesh Mukherjee, Advocate, Aarushi Mishra, Advocate, Anuj Aggarwal, Advocate, Ayushi Bansal, Advocate, Aishwarya Sharma, Advocate, Sanyam Suri, Advocate
The main legal point established in the judgment is that an Arbitral Tribunal's interpretation of a contract is within its jurisdiction and will not be interfered with unless it is perverse or outside the terms of the contract.
Headnote:
Arbitration and Conciliation Act - Obligations of petitioner to collect and treat bio-medical waste from Healthcare establishments - Agreement dated 21.07.2006 - Impugned award dated 18.03.2020 - Clause 10 of the Agreement
Fact of the Case:
The petitioner filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996, impugning an arbitral award dated 18.03.2020, which rejected the petitioner's claims and counter-claims regarding the obligations to collect and treat bio-medical waste from Healthcare establishments as per Clause 10 of the Agreement dated 21.07.2006.
Finding of the Court:
The court found that the impugned award was not contrary to the terms of the Agreement and was not vitiated by patent illegality. The court held that the Arbitral Tribunal's interpretation of Clause 10 of the Agreement was reasonable and within its jurisdiction. The court dismissed the petition.
Issues: The principal question addressed was whether the impugned award was contrary to the terms of the Agreement and whether it was vitiated by patent illegality.
Ratio Decidendi: The court held that the Arbitral Tribunal's interpretation of the Agreement was within its jurisdiction and not perverse. The court emphasized that an Arbitral Tribunal is the final authority for interpreting the contract and its decision cannot be interfered with merely because a different interpretation is possible.
Final Decision: The petition was dismissed as unmerited.
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 18.03.2020 (hereafter the impugned award) rendered by the Arbitral Tribunal constituted of a Sole Arbitrator (hereafter the Arbitral Tribunal).
2. The controversy between the parties, essentially, relates to the obligations of the petitioner to collect and treat bio-medical waste from Healthcare establishments identified by the Government of NCT of Delhi (the respondent), free of any charge, in terms of Clause 10 of an agreement dated 21.07.2006 (hereafter the Agreement).
3. The petitioner contends that in terms of the said clause, its liability to collect, transport and treat bio-medical waste from the Healthcare establishments was limited to approximately 1000 kgs. per day. The respondent disputes the same. According to the respondent, the petitioner was obliged to collect, transport, treat and dispose of all the bio-medical waste from all Healthcare establishments identified by it, free of charge, during the term of the Agreement.
4. The Arbitral Tribunal accepted the respondents contention and rejected the claims made by the petitioner. It also rejected the counter-claims raised by the respondent.
Factual background
5. The petitioner is engaged, inter alia, in the business of treating waste material.
6. The Directorate of Health Services, Government of NCT of Delhi (the respondent) had acquired land measuring 1000 sq. meters at Ghazipur, Delhi, for establishment of the Centralised Treatment Facility (hereafter CTF) for treatment of bio-medical waste. It invited tenders for establishing a CTF for bio-medical waste generated from private hospitals/public nursing homes, diagnostic centers, laboratories/blood banks, medical/ISM colleges, as a joint venture, on BOT (Build Operate Transfer) basis for a period of ten years.
7. The joint venture was premised on the respondent providing the site and infrastructural support to the selected party/agency for establishing the CTF, in terms of transferring the site on such terms and conditions as may be approved by the Delhi Development Authority/Municipal Corporation of Delhi. The selected tenderer was obliged to incur all capital expenditure for establishing the CTF as well as for operation and maintenance.
8. The tender documents also expressly provided that the selected tenderer would transport and treat bio-medical waste generated in hospitals and dispensaries under the Government of NCT of Delhi (where treatment facilities were not available on site) free of cost.
9. The petitioner tendered for the project and was successful. The respondent issued a Letter of Intent dated 23.04.2006 (hereafter LoI) and called upon the petitioner to furnish a Performance Bank Guarantee. The petitioner submitted the Performance Bank Guarantee on 21.07.2006 and thereafter, the parties entered into the Agreement dated 21.07.2006.
10. In terms of the Agreement, the respondent agreed to provide the land at Ghazipur for setting up the CTF. And, in terms of Clause 12 of the Agreement, the petitioner agreed to pay a sum of Rs. 4,32,000/- to the respondent as monthly charges till the date of handing over of the site back to the respondent.
11. In compliance with its obligations, the respondent delivered possession of the land at Ghazipur to the petitioner on 07.08.2006. The petitioner applied to the Delhi Pollution Control Committee (hereafter DPCC) for Consent to Establish the proposed Centralized Bio-Waste Treatment Facility [under the Air (Prevention and Control of Pollution) Act, 1981 and the Water (Prevention and Control of Pollution) Act, 1974] at the site. However, the DPCC declined to grant the Consent to Establish as sought, by its letter dated 25.06.2007. The petitioner states that it immediately handed ov
