The main legal point established in the judgment is the limited grounds for challenging arbitral awards under Section 34 of the A&C Act, emphasizing the principles of public policy and fundamental Indian law.

JUDGMENT

Vibhu Bakhru, J. - The petitioner 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 09.05.2020 (hereinafter the ‘impugned award’) delivered by the Arbitral Tribunal constituted by a former judge of this Court as the Sole Arbitrator.

2. The impugned award has been rendered in the context of disputes that have arisen between the parties in relation to an agreement dated 02.07.2012 (hereafter ‘the Agreement’).

3. By the impugned award, the Arbitral Tribunal has partly denied the claims preferred by the petitioner. The Arbitral Tribunal has denied that petitioner’s claim for damages and loss of profit on account of delay in completion of works.

Factual Context

4. India Tourism Development Corporation Ltd. (hereinafter referred to as “ITDC”) invited tenders on 09.02.2011 for “Construction of Memorial of Smt. Vidyavati Ji Mother of Great Martyr Shaheed Bhagat Singh Ji” at Village Moranwali, District Hoshiarpur, Punjab (hereinafter referred to as the “Memorial”).

5. The petitioner tendered its bid to execute the works on 11.04.2011, pursuant to the aforementioned notice inviting tenders. By a letter dated 23.11.2011, ITDC accepted the petitioner’s bid to execute the works at a price of ?3,67,73,933.74/-.

6. Thereafter, ITDC issued a detailed Work Order – Work Order no. ITDC Engg/DGM/Moranvali/2012 dated 20.12.2011 – in favour of the petitioner. On 02.07.2012, the parties entered into the Agreement. In terms of the Agreement, the petitioner was obliged to complete the works within a prescribed period of 12 (twelve) months to be reckoned from the seventh day of issue of the Letter of Intent or, the date of actual handing over the site, whichever was later. Therefore, the work was to be completed by 19.12.2012.

7. However, the works could not be completed within the stipulated time. The same were completed on 30.01.2018; that is, after a delay of five years, one month and eleven days. The petitioner claims that the delay in completion of works is for reasons attributable to ITDC.

8. Whilst the petitioner claimed that the delays were justified, ITDC asserted that the petitioner was liable for a delay of thirty-nine days.

9. The RA Bills (Running Account Bills) were cleared by ITDC. However, there was a considerable delay in clearance of the Final Bill. The same was cleared in two tranches. The first tranche of ?28 Lacs was paid on 20.11.2018, that is, after a delay of ten months. The second tranche of ?10,82,249/- was paid on 02.02.2019, that is, more than one year after completion of the work. In addition to this, ITDC had also deducted certain amounts from the payments due to the petitioner including compensation of ?4 lacs on account of delay of thirty-nine days in completion of the works.

10. On 14.03.2019, the petitioner sent a notice and requested for appointment of an arbitrator with mutual consent. It asserted that the appointment procedure mentioned in Clause no. 48 of the Agreement was contrary to Section 12(5) of the A&C Act and, proposed the name of Sh. Amarjit Singh, (Retd.) Chief Engineer, Mohali for being appointed as the Arbitrator with mutual consent.

11. However, ITDC unilaterally appointed Justice (Retired) S.P. Garg, a former judge of this Court as the Sole Arbitrator.

12. The petitioner filed its Statement of Claims raising several claims. A tabular statement summarizing the claims made, is set out below:-