The main legal point established in the judgment is that the decision of the arbitral Tribunal is entitled to substantial discretion in awarding interest, and the court does not sit as the first appellate Court and cannot re-appreciate the evidence and supplant its opinion over that of the arbitral Tribunal.

JUDGMENT

Vibhu Bakhru, J. - The petitioner (hereinafter 'GaIL') 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 20.11.2019 (hereinafter 'the impugned award') rendered by an arbitral Tribunal comprising of a former Chief Justice of the High Court of Jammu and Kashmir 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 connection with an agreement dated 28.05.2012 (hereinafter the 'agreement').

3. The controversy in the present case arises in the following context: -

4. Tenders were invited by GaIL (being Tender no. a096/T-069/11-12/MS/38) for the works regarding setting up of a 'Dematrialised (DM) Water Plant and Condensate Polishing Unit (CPU) for GaIL Petrochemical Complex - II at Pata, Uttar Pradesh' (hereinafter the 'Project'), on the terms and conditions stipulated therein.

5. Pursuant to the said invitation to tender, the respondent submitted its bid for executing the Project, on 27.02.2012. The respondent's bid was accepted and thereafter, GaIL issued a Fax of acceptance dated 03.05.2012 (hereinafter the 'Foa'), accepting the respondent's bid to execute the Project for a consideration of ?55 crores inclusive of all taxes and duties except service tax at the rate of 4.944%. The 'Extended Stay Compensation' was stipulated as ?10,00,000/- per month. In terms of the Foa, the respondent was required to furnish a Performance Bank Guarantee and enter into a formal agreement within a period of fifteen days from the date of the said Foa, as per the provisions of the tender documents.

6. Subsequently, on 22.05.2012, GaIL issued the Letter of acceptance (hereafter the 'Loa'). M/s Engineers India Limited (hereafter 'EIL') was appointed as the 'Engineer in-Charge' under the agreement. The effective date of commencement of the Project was stipulated as 03.05.2012 and the works were to be completed within a period of eighteen months, that is, on or before 02.11.2013. Thereafter, on 28.05.2012, the parties signed the agreement.

7. The execution of the Project was delayed. GaIL withheld amounts as reduction of price as stipulated under Clause 27 of the GCC. It also withheld an amount of ?1,20,00,000/- as the value of Cathodic Protection System, on the ground that the same was within the scope of work but was not installed. Disputes arose between the parties regarding the Price Reduction Schedule (hereinafter 'PRS'), installation of Cathodic Protection System (hereinafter 'CPS'), extra works performed under the agreement and bank charges.

8. The context in which the aforesaid dispute arose are briefly stated hereafter.

9. The respondent, by a communication dated 25.10.2013, requested EIL for provisional extension of time for a period of four months without imposition of liquidated damages. The respondent stated that the delays in execution of Project works were caused, inter alia, due to local disputes, delay in supply items, force majeure events, delay due to rainy season, delay in supply item and sequential work front. Thereafter, by a letter dated 28.10.2013 addressed to GaIL, EIL recommended that provisional extension of time be granted to the respondent till 31.01.2014 without prejudice to GaIL's right to impose PRS as per the provisions of the agreement, in the case the delays were attributable to the respondent.

10. On 31.10.2013, GaIL granted provisional extension of time to the respondent till 31.01.2014 without prejudice to its right to impose PRS, in terms of Clause 27.1 of the General Conditions of the Contract (hereinafter 'GCC').

11. By various communications thereafter, the respondent sought further extensions of time from GaIL as the completion of the Project was delayed. GaIL granted provisional extension of time till 31.12.2015 without prejudice to its right to impose PRS, in terms of Clause 27.1 of the GCC.

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