The Court held that the Arbitral Tribunal's findings on the earth work in hard rock and use of tie bolts were based on sufficient evidence and were not contrary to the contract. The Court also upheld the award of reimbursement for additional royalty and excise duty. However, the Court set aside the award of compensation and future interest, as they were contrary to the contract. The Court also rejected the counter-claims raised by the respondent.

JUDGMENT

Vibhu Bakhru, J. The petitioners have filed the present petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereafter the `A&C Act') impugning an arbitral award dated 30.01.2021(hereafter the `impugned award') delivered by the Arbitral Tribunal comprising of a learned Sole Arbitrator.

2. The impugned award was rendered in the context of disputes between the parties in connection with a contract dated 05.11.2014 relating to the work of "Construction of service buildings, loco shed, RCC Trunk Drain and Misc. Civil Works in connection with the Construction of Private Railway Siding for Solapur Super Thermal Power Project of NTPC Limited near Hotgi Railway Station in Solapur District, Maharashtra-Pkg.4" (hereafter "the Contract").

3. The petitioners contend that the impugned award is vitiated by patent illegality as, it is contrary to the terms of the Contract and has been made in disregard of the documentary evidence placed on record.

Factual Context

4. Petitioner no. 2 (hereafter `NTPC') had appointed Petitioner no. 1 (hereafter `IIL') as their Project Management Consultant for work of Detail Project Report (DPR), Detailed Engineering, Project Management and Construction of Coal Transportation System for its power plant namely Solapur Duper Thermal Power Project (2X660 MW) at Solapur Maharashtra through a Letter of Award bearing no. 01/CS-9571-350-9-CY-LOA-5779 dated 01.06.2012.

5. Thereafter, on 07.12.2012, NTPC executed a Power of Attorney in favour of IIL on 07.12.2012.

6. On 10.07.2014, IIL issued a Notice Inviting Tender (NIT) for Package no. 4 concerning works related to the construction of service buildings, loco shed, RCC Trunk Drain and Miscellaneous Civil Works in connection with the construction of Private Railway Siding for Solapur Super Thermal Power Project at Solapur District, Maharashtra.

7. The respondent (hereafter `Cannon') submitted its bid pursuant to the NIT. It was declared as the lowest bidder and accordingly, IIL issued a Letter of Award (LoA) dated 30.09.2014 in favour of Cannon, for execution of the aforesaid works at a contract price of Rs.21,25,74,013.74/-. In terms of the Contract, the works were to commence on 30.09.2014 and were to be completed within a period of eleven months, that is, on or before 29.08.2015.

8. Cannon completed the works on 30.06.2016. However, during the execution of the works, certain disputes arose between Cannon and IIL. The disputes between the parties related mainly to Cannons' claims for: (i) earthwork at the rates applicable for excavation in Hard Rock; (ii) additional payment for use of Tie bolts for RCC Wall Shuttering; (iii) additional payment for providing finish to RCC/PCC Surface; (iv) release of balance payment of Final Bill that was withheld by IIL/NTPC; and (v) reimbursement of additional royalty and excise duty. The said disputes are briefly outlined, hereafter.

A. Hard Rock in Earth Excavation

9. On 19.11.2014, Cannon informed IIL that during excavation they experienced 0.90 meters of hard rock at the bottom layer and further, requested the Project Head of IIL to physically visit the site to classify the excavated work. The Project Head of IIL visited the excavated site and classified the earth-work. He also recorded the reduced level of the earth including hard rock in the field book. Thereafter, IIL regularly recorded the measurement of the earth-work in the field book, classifying the soil as hard rock. The Running Account Bills (RA Bills) from the 2nd RA Bill till the 5th RA Bill reflected these levels, which were jointly signed by Cannon and IIL.

10. On 08.12.2014, Cannon addressed two letters to the Project Head of IIL and referred to the Central Public Works Department Specifications, 2009 (hereafter the `CPWD Specifications') for the earth work. On 25.12.2014, Cannon once again addressed a letter reiterating that it had encountered hard rock while excavating at various locations and further pointed out various items