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2022 Supreme(Del) 1628

IN THE HIGH COURT OF DELHI AT NEW DELHI
C.Hari Shankar, J.
National Highways - Appellant
Versus
M/s. Abhijeet Angul Sambalpur - Respondent
O.M.P. (Comm) 224 of 2021 and I.A. 9860 of 2021
Decided On : 28-02-2022

Advocates appeared:
Ms. Aishwarya Bhati, ASG, Ms. Neetica Sharma and Mr. Nitin Chowdhary, Advocates, for the Appellant; Mr. Sandeep Bajaj, Devansh Jain and Vipul Jai, Advocates, for the Respondent.

The right of the petitioner to file counter-claims exists independent of any liberty granted by the Arbitral Tribunal, and the decision of the Arbitral Tribunal can be challenged under Section 34 of the Arbitration and Conciliation Act, 1996.

Headnote:

Arbitration - Counter-Claim - Arbitration and Conciliation Act, 1996 - Section 34 - The judgment discusses the misreading of an earlier order by the Arbitral Tribunal, the right to file counter-claims, and the maintainability of the petition under Section 34. The court quashed the decision of the Arbitral Tribunal to decline the counter claims, except for the counterclaim for Rs. 12.2 crores.

Fact of the Case:

The petition under Section 34 of the Arbitration and Conciliation Act, 1996, challenges the decision of the Arbitral Tribunal to not entertain or adjudicate any counter-claims raised by the petitioner-NHAI, except the counter-claim for Rs. 12.2 crores.

Finding of the Court:

The court found that the assumption of the Arbitral Tribunal was based on a misreading of the earlier order and that the right of the petitioner to file counter-claims exists independent of any liberty granted by the Arbitral Tribunal. The court also discussed the maintainability of the petition under Section 34 and quashed the decision of the Arbitral Tribunal.

Issues: Misreading of the earlier order by the Arbitral Tribunal, right to file counter-claims, and maintainability of the petition under Section 34.

Ratio Decidendi: The right of the petitioner to file counter-claims exists independent of any liberty granted by the Arbitral Tribunal. The court also clarified the maintainability of the petition under Section 34 and quashed the decision of the Arbitral Tribunal.

Final Decision: The decision of the Arbitral Tribunal to decline the counter claims, except for the counterclaim for Rs. 12.2 crores, was quashed and set aside. The petition was allowed with consequential relief to NHAI with no order as to costs.

JUDGMENT

C . Hari Shankar, J. - This petition under Section 34 of the Arbitration and Conciliation Act, 1996 ('the 1996 Act'), assails para 6.1.7 of order dated 26th August, 2020 passed by the majority of the learned Arbitral Tribunal, which consisted of three members, whereby the learned Arbitral Tribunal has held that it would not entertain or adjudicate any of the counter-claims raised by the petitioner-NHAI vide its application dated 4th February, 2020 except the counter-claim for Rs. 12.2 crores. The impugned para 6.1.7 reads thus:

    '6. 1.7 It is seen that the AT had allowed the Respondent to file a Counter Claim for the amount of Rs.12.2 Crores only, as claimed through their application dated 04.02.2020.

    However, the Respondent nave filed three Counter-Claims.

    The two Counter-Claims besides the Counter-Claim for Rs. 12.2 Crores have been filed without any authority.

    The AT reiterates that it wilt adjudicate only one Counter-Claim forRs.12.2 Crores as per liberty allowed to the Responding for filing the particular Counter-C1aim.

    The-AT shall not entertain and adjudicate-other Counter Claims.'

    2. The impugned majority decision proceeds on the premise that the learned Arbitral Tribunal had, vide its earlier order (dated 24th September, 2019) allowed NHAI to file a counter-claim 'for the amount of Rs. 12.2 crores only '.

    3. From a reading of the order dated 24thSeptember, 2019 passed by the learned Arbitral Tribunal, it is clear that this assumption of the learned Arbitral Tribunal is actually predicated on a misreading of the order dated 24th September, 2019. The order dated 24th September, 2019, which was passed by the learned Arbitral Tribunal on an application by the NHAI under Section 17 of the 1996 Act, does not state that the petitioner would file a counterclaim only for an amount of Rs.12.2 crores. For ready reference, the entire order dated 24th September, 2019 is reproduced thus:

      'BEFORE THE ARBITRAL TRIBUNAL COMPRISING

      OF

      Shri O.P. Goel PRESIDING ARBITRATOR

      Shri Sudesh Dhiman ARBITRATOR

      Shri K.K. Singal ARBITRATOR

      IN THE MATTER OF ARBITRATION BETWEEN

      M/s Abhijeet Angul Sambalpur Toll

      Road Limited. . Claimant/Concessionaire

      And

      National Highways

      Authority of India . Respondent/Employer

      24.09.2019

      Sub: Four Laning of Angul-Sambalpur Section of NH-42 from Km 112.00 to Km 265.00 in the State of Orissa under NHDP-IV to be executed as BOT (Toll) on DBFOT Pattern. Concession Agreement dated13.03.2012

      Re: Application under Section 17 of the Arbitration & Conciliation Act, 1996on behalf of National Highways Authority of India (Respondent)seeking withdrawal of money towards bank guarantee deposited with State Bank of India Nagpur in the High Court of Delhi along with interest accrued thereon w.e.f. 20.09.2013.

      The Respondent has filed an Application under Section 17 of the Arbitration& Conciliation Act, 1996 on 04.02.2019. The Claimant filed their reply to the application vide letter dated 02.03.2019. The Respondent did not want to file their rejoinder. Arguments were presented by the parties during hearing. Both parties filed their Brief Notes.

      Respondent's case:

      1. As per Concession Agreement, the Claimant was required to submit a performance guarantee of Rs.61 crores. This has not been done. The reasons advanced by the Claimant for not furnishing performance guarantee are not relevant. Against the request of extension of time for 120 days for submission of the performance guarantee, period of7 days was allowed by the Respondent. Despite that the performance guarantee was not furnished.

      2. The Claimant filed an application before Hon'ble High Court of Delhi seeking stay on encashment of the bank guarantee (bid security) of Rs. 12.2 crores available with the Respondent. The Hon'ble High Court stayed the invocation of bank guarantee till final orders. The High Court decided on 22.8.2013 to get the money deposited in the court. On the money being deposited with the Registry of the Court, the Registry will invest the same in an interest bearing fixed

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