IN THE HIGH COURT OF DELHI AT NEW DELHI
Vibhu Bakhru, J.
M/s Shivalaya Construction Company Pvt. Ltd. - Appellant
Versus
Delhi Development Authority - Respondent
Original Miscellaneous Petition (COMM.) No. 19 of 2020, Miscellaneous Application No. 514 of 2020, 13845 of 2021
Decided On : 13-12-2021
Arbitration and Conciliation Act, 1996 - Dispute over construction project - Section 34 - [DELAY] - [Construction Project] - [Section 34 of the Arbitration and Conciliation Act, 1996] - The court discussed the provisions of the Agreement, including Clause 2A for early completion bonus, and the extension of time for completion of works. The court also considered the reimbursement of taxes and compensation due to prolongation of works. The key legal provisions interpreted include Clause 2A of the Agreement and the principles of extension of time for completion of works.
Fact of the Case:
The petitioner filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996, impugning an arbitral award related to a construction project. The disputes arose between the parties regarding various claims made by the petitioner, which were partially accepted by the Arbitral Tribunal. The petitioner challenged the rejection of certain claims in the impugned award.
Finding of the Court:
The court found that the impugned award was not vitiated by any patent illegality or public policy violation. The court upheld the rejection of certain claims by the Arbitral Tribunal, as the petitioner failed to substantiate the claims for additional bonus, taxes reimbursement, and compensation due to prolongation of works.
Issues: The issues involved the entitlement to bonus for early completion, reimbursement of taxes, and compensation for prolongation of works. The court also addressed the petitioner's contention of lack of opportunity to deal with certain aspects and the rejection of its claims by the Arbitral Tribunal.
Ratio Decidendi: The court held that the rejection of the petitioner's claims was justified as the petitioner failed to provide sufficient evidence to substantiate the claims. The court also emphasized that the scope of proceedings under Section 34 of the A&C Act does not entail re-adjudication of the disputes by re-evaluation of the evidence and material before the court.
Final Decision: The petition was dismissed, and all pending applications were disposed of.
JUDGMENT
Vibhu Bakhru, J. - The petitioner (hereinafter SCCPL) has filed the present petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter the A&C Act) impugning an arbitral award (hereinafter the impugned award) dated 13.09.2019 passed by the Arbitral Tribunal constituted by Justice (Retired) Shiv Narayan Dhingra, a former Judge of this Court, as the Sole Arbitrator (hereinafter the Arbitral Tribunal).
2. The impugned award was rendered in the context of disputes that have arisen between the parties in relation to an agreement dated 05.05.2014 (hereafter the Agreement).
Factual Matrix
3. Delhi Development Authority (hereinafter DDA) had issued a Notice Inviting Tenders (NIT) for taking up the work of "Construction of peripheral SW drains and culverts in Section G-7 and G-B at Narela Sub City" (hereinafter the Project). SCCPL had participated in the bidding process pursuant to the aforesaid notice, and on 03.04.2014, DDA accepted SCCPLs bid for an amount of Rs. 33,71,38,882/-. Thereafter, on 02.05.2014, DDA issued a Letter of Acceptance (hereinafter the LOA), in favour of SCCPL. The date of commencement of works was stipulated as the 15th day from the issuance of the LOA or from handing over of the site, whichever was earlier.
4. On 05.05.2014, the parties entered into the Agreement and the site was handed over to SCCPL. As per the said LOA, the date of completion of the work was twelve months, which was to commence from 16.05.2014 and the works were to be completed by 15.05.2015.
5. SCCPL claims that it had fully mobilised its resources in accordance with the provisions of the Agreement and commenced the works relating to the Project, however, there was a delay in the execution of the works due to various reasons attributable to DDA and it was not possible for SCCPL to complete the work within the stipulated period, that is, on or before 15.05.2015.
6. By a communication dated 23.03.2015, SCCPL requested DDA to revise the milestones and the stipulated date for completion of the works. SCCPL also stated that it reserved its right to claim the required extension of time and compensation in terms of Clauses 10C and 10CA of the Agreement, as well as overhead expenses.
7. Thereafter, by a letter dated 12.06.2015, the Executive Engineer of DDA, after considering the aforementioned issues, recommended shifting of the milestones and the stipulated date of completion of the works to 08.12.2015 without prejudicing the right of DDA to recover compensation under Clause 2 and other clauses of the Agreement.
8. On 16.11.2015, SCCPL successfully completed the works. According to SCCPL, it had completed the works sixty-five days before the expiry of the contracted period. This was premised on the assertion that it was entitled to an extension of two-hundred and fifty days and thus, the work was to be completed by 20.01.2016.
9. Thereafter, DDA issued Performance Certificates dated 31.05.2016 and 15.06.2016 to SCCPL regarding completion of the works. The said certificates recorded that "The work has been executed satisfactorily. The overall performance of the work has been found as very good. The E.O.T. has been granted by competent authorities up to the actual date of completion without levy of compensation".
10. Thereafter, SCCPL, by various communications, requested DDA to compensate it on account of prolongation of the Project works and also, requested that various payments, which it claimed were due under the Agreement, be released to it. However, the same were not released by DDA. The last letter was dated 17.06.2017.
11. In June 2017, disputes arose between the parties, inter alia, regarding the compensation due to prolongation of the Project works and, SCCPL asked DDA to appoint an arbitrator in terms of Clause 25 of the Agreement. However, DDA failed to do so.
12. Thereafter, in the month of November 2017, SCCPL appro
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The Arbitral Tribunal has considerable discretion in evaluating evidence and interpreting contract clauses, and its decision cannot be interfered with unless found to be patently illegal or in confli....
The Arbitral Tribunal's decision falls within its jurisdiction and does not amount to patent illegality, as it was based on a plausible interpretation of the exclusionary clause in the contracts and ....
Arbitral tribunals have discretion over fact-finding, and courts should not re-evaluate evidence unless decisions violate public policy or involve patent illegality.
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