IN THE HIGH COURT OF DELHI AT NEW DELHI
Manoj Kumar Ohri, J.
Mahanagar Telephone Nigam Ltd. - Appellant
Versus
M/s Ralhan Construction Company - Respondent
FAO 271 of 2019 & CM. APPL. 31033 of 2019
Decided On : 31-01-2023
Arbitration & Conciliation Act, 1996 - Section 37(1)(b), 34 - Arbitral award - Set aside of order award - Appeal was filed by appellant seeking setting aside of order award - Held, While interpreting Clause H, Special Conditions of Contract of Agreement between parties, arrived at conclusion that primarily, it was appellant’s responsibility to apply for completion certificate and respondent had to co-ordinate in efforts - Interpretation was upheld by learned ADJ while deciding objection petition filed by appellant - On a reading of judicial dicta cited hereinabove, Court find force in submission of learned counsel for respondent that if a clause can be interpreted in two ways and view taken by Arbitrator is a possible one if not a plausible one, this Court would not interfere, scope of enquiry being limited - Therefore, Court is of considered view that Award is not vitiated by any error of fact or law on face of record, and that Arbitrator did not misconduct himself within meaning of Arbitration Act - No ground for interference with Award and/or impugned order is made out - Appeal dismissed.
JUDGMENT :
Manoj Kumar Ohri, J.
1. By way of present appeal filed under Section 37(1)(b) of the Arbitration & Conciliation Act, 1996 (hereinafter, referred to as ‘the Arbitration Act’), the appellant has assailed order dated 16.04.2019 passed by the learned ADJ-07, South-East, Saket Courts, New Delhi in Arb. No. 212/2018, whereby its objections under Section 34 of the Arbitration Act to Award dated 09.05.2018 (and subsequent amendments thereto) were dismissed.
2. Though the present appeal was filed by the appellant seeking setting aside of the order dated 16.04.2019, the Award dated 09.05.2018, and the subsequent amendments thereto, learned counsel for the appellant, on instructions, restricted her challenge during the course of submissions only to respondent’s claim Nos. 2 and 3, which were in relation to release of balance payment of security deposit lying with the Department, directed to be released to the respondent vide the Award.
3. Facts of the case, pithily put, are that the appellant had floated a tender dated 20.11.2007 for the civil and electrical portion of construction of Automobile Workshop-cum-Administrative building at Rohini, Sector-VI, Delhi. The said work was awarded to the respondent for a consideration amount of Rs. 18,68,11,252/-. The time stipulated for completion of the work was 18 months from the date of issuance of letter of award. Purportedly, the civil component of the work was completed on 31.12.2011 and the electrical part was completed on 07.06.2013.
A dispute arose between the parties relating to payments under the agreement, which led the respondent to initiate arbitration proceedings in terms of Clause 53 thereof. The matter was adjudicated by a Sole Arbitrator, who passed an Award dated 09.05.2018, allowing all claims of the respondent either partially or fully, except claim Nos. 18 and 20. Subsequently, two amendments dated 11.05.2018 and 12.05.2018 were made to the Award by the Arbitrator.
The appellant filed its objections under Section 34 of the Arbitration Act before the learned District and Sessions Judge, West, Saket Courts, praying that the Award dated 09.05.2018 (and the subsequent amendments thereto) be set aside. However, the objections were dismissed vide the order impugned herein, i.e. order dated 16.04.2019.
4. Learned counsel for the appellant contended that the Arbitrator erred in interpreting Clause H, Special Conditions of Contract in the Agreement between the parties to conclude that it was the appellant’s responsibility to file application for obtaining completion/occupancy certificate from local authorities. It was further contended that in reaching the above conclusion, the Arbitrator also erred in relying upon the ‘Hand Book of Building Permit Procedure 2006, Delhi Development Authority’, as the same was not executed between the parties and was an extraneous document filed by the respondent. On strength of the aforesaid, it was argued that the impugned Award was arbitrary, capricious and beyond the scope of mutually agreed terms in the contract entered between the parties. Learned counsel also contended that the concerned Arbitrator misconducted himself by carrying out the proceedings in a biased and hasty manner. In support of her contentions, she relied on the decision in M/s L.G. Electronics India (P) Ltd. v. Dinesh Kalra reported as 2018 SCC OnLine Delhi 8367.
5. On the other hand, Ms. Salwan, learned counsel for the respondent, defended the arbitral Award as well as the impugned order by submitting that it was the duty of the architect engaged by the appellant to apply for the completion certificate. In this regard, reference was made to an agreement executed between the appellant and the architect namely M/s. R.K. & Associates. It was also submitted that the said agreement was executed in relation to the subject work order and the respondent’s obligation was to make efforts and co-ordinate after the appellant had filed the application for obtaining the completion certific
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The court confirmed that the scope of interference under Section 37 of the Arbitration Act is limited, emphasizing the binding nature of arbitration agreements.
The limited grounds for interference with an arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996, emphasize the concept of patent illegality and the criteria for setting asi....
The court confirmed that judicial interference in arbitral awards is limited to cases of patent illegality or perverse findings, respecting the finality of arbitration.
The court reaffirmed the limited scope of judicial review of arbitral awards under Sections 34 and 37 of the Arbitration and Conciliation Act, emphasizing that courts cannot reappraise evidence or in....
The main legal point established in the judgment is the limited scope of interference under Section 37 of the Arbitration and Conciliation Act, 1996, and the importance of interpreting the contract a....
The court emphasized that arbitral awards should not be interfered with solely based on disagreements with findings, affirming the limited grounds for appeal under Section 34 of the Arbitration Act.
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