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IN THE HIGH COURT OF DELHI AT NEW DELHI
Vibhu Bakhru, J.
Ircon International Limited - Appellant
Versus
PT-Rahee JV - Respondent
O.M.P. (COMM) 273/2021 and IA Nos. 11808/2021 & 11810/2021
Decided On : 25-03-2022
Arbitral Award - Construction Contracts - Clause 49.5 of the GCC, Section 23 of the Indian Contract Act, 1872, Business Efficacy Test, Section 16 of the A&C Act, Indian Evidence Act, 1872 - The court discussed the interpretation of Clause 49.5 of the GCC and its applicability in cases of delay, the principle of apportionment, and the discretion of the Arbitral Tribunal in evaluating evidence. The court found the decision of the Arbitral Tribunal to be plausible and in accordance with the law.
Fact of the Case:
The petitioner challenged the Arbitral Award regarding delay in completion of construction works and claims for compensation. The respondent claimed financial hardships and losses due to delay, while the petitioner claimed the respondent was responsible for the delay. The respondent executed a No Claim Certificate, but later raised additional claims. The Arbitral Tribunal partly allowed the respondent's claims.
Finding of the Court:
The court found that the Arbitral Tribunal's decision was plausible and in accordance with the law. The court dismissed the petition and concluded that the impugned award did not require any interference.
Issues: Interpretation of Clause 49.5 of the GCC, applicability of exclusionary clauses in cases of delay, validity of the No Claim Certificate, sufficiency of evidence in arbitral proceedings, and apportionment of delay-related claims.
Ratio Decidendi: The court upheld the Arbitral Tribunal's decision, emphasizing the Tribunal's discretion in evaluating evidence and interpreting contract clauses. The court found the decision to be plausible and in accordance with the law.
Final Decision: The petition was dismissed, and the impugned award did not require any interference.
JUDGMENT
Vibhu Bakhru, J. - The petitioner (hereafter "Ircon") has filed the present petition impugning the Arbitral Award dated 19.12.2020 (hereafter the "impugned award") passed by the Arbitral Tribunal comprising of a Sole Arbitrator (hereafter the "Arbitral Tribunal").
Factual Background
2. On 10.02.2009, the East Central Railways under the Ministry of Railways through its Tender No. 22 of 2008-2009 awarded Ircon the project of "Construction of Steel Superstructure and Other Ancillary Works of Rail-cum-road Bridge Across River Ganga at Patna" (hereafter the "Project").
3. Ircon, in turn, issued a Notice Inviting Tender (NIT) on 27.06.2008, in respect of works pertaining to "Fabrication of 17x 123 m + 2 x 64m triangulated steel bridge girders for new rail-cum-road bridge over river Ganges (Ganga) at Patna by setting up of field workshop on the Dighaghat end (South End) of river Ganges including leading of structural steel from Fatuha Stockyard, shop painting and trail assemble of one span of each type in the shop as a complete job", arising out of the aforesaid Project.
4. The respondent was declared as the lowest bidder and accordingly, Ircon issued a Letter of Award (LoA) dated 22.08.2008 in favour of the respondent for execution of the aforesaid works, for a total contract value of ? 135.39 crores.
5. Subsequently, on 22.01.2009, the parties entered into a Contract bearing number IRCON/2044/Ganga Bridge/05 for "Fabrication of 17 x 123 m + 2 x 64m span triangulated steel bridge girders for new rail-cum-road bridge over river Ganges (Ganga) at Patna " (hereafter the "Fabrication Contract").
6. Thereafter, on 27.03.2009, the parties also entered into a Contract bearing number IRCON/2044/Ganga Bridge/07 for "Assemble, Erection/Launching of18 x 123 m + 1 x 64m span triangulated steel girders for new Rail-Cum-Road bridge across river Ganga at Patnafrom Digha Ghat end (South End) including transportation of fabricated components of (17 X 123 m + 1 X 64m)" (hereafter the "Erection Contract") for a total contract value of ? 107.08 crores.
7. The Fabrication Contract and the Erection Contract are hereafter collectively referred to as the "Contracts".
8. In terms of the Fabrication Contract, the works were to commence on 22.08.2008 and were to be completed within a period of forty-two months, that is, on or before 21.02.2012. Admittedly, the respondent completed the said works on 30.09.2015.
9. In respect of the Erection Contract, the works were to commence on 18.02.2009 and were to be completed within a period of forty-five months, that is, on or before 17.11.2012. However, works in respect of the Erection Contract were completed by the respondent after a period of eighty-six months from the date of commencement of the said Contract, that is, on 30.04.2016.
10. The respondent claimed that there was a delay in completion of the works under the Contracts for reasons attributable to Ircon as a result of which, it had suffered financial hardships and incurred heavy losses. Ircon, on the other hand, claimed that the respondent was responsible for the delay in performance of the Contracts.
11. In view of the disputes between the parties, a meeting was held on 10.09.2015 and certain issues were settled as recorded in the Minutes of the Meeting dated 10.09.2015.
12. On 13.12.2016, the respondent executed a No Claim Certificate (hereafter "NCC"). Ircon states that in lieu of the NCC, all claims of the respondent were settled and thus, the respondent was precluded from raising any further claims.
13. However, the respondent by its letter dated 25.01.2018 raised additional claims for losses suffered by it due to Ircon's failure of performing its obligations in a timely manner under the Contracts. The respondent received no response to the aforesaid letter by Ircon. Thereafter, by a letter dated 27.03.2018, the respondent invoked the Arbitration Agreement and sought reference of the disputes to arbitration. The respondent claimed an amount of ? 50,95,18,94
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 ....
The Court upheld the AT's findings regarding the attribution of delay, enforcement of NOC, and the allowance of the claim for escalation cost without a specific clause in the Contract, based on the n....
The main legal point established in the judgment is that the decision of the Arbitral Tribunal must be based on evidence and material on record, and the Court will not interfere with the award unless....
The arbitral tribunal's decision to deny claims for damages due to lack of supporting evidence is valid under Section 34 of the Arbitration and Conciliation Act, emphasizing minimal judicial interfer....
The court upheld the tribunal's award, concluding that the claims did not fall under 'excepted matters' and corroborated the contractor's entitlement to claims based on inadequate adjudication by the....
The interpretation of the contract is within the exclusive domain of the learned Arbitrator, and the court would not interfere with such interpretation.
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 In....
In terms of Section 21 of the A&C Act, the arbitral proceedings commence on the date of receipt of notice invoking the arbitration agreement.
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