Failure to raise claims for escalation in a timely manner and acceptance of payments in full and final settlement preclude further claims.

JUDGMENT

Vibhu Bakhru, J.

1. The appellant has filed the present appeal under Section 37(1)(c) of the Arbitration & Conciliation Act, 1996 (hereafter `the A&C Act') impugning an order dated 27.11.2018 (hereafter `the impugned order') passed by the learned Single Judge rejecting the appellant's petition [being OMP(COMM) No.27/2018 captioned Shri K.R. Anand v. Navayuga Engineering Co. Ltd. The appellant had filed the said petition under Section 34 of the A&C Act seeking to set aside an arbitral award dated 16.11.2017 (hereafter `the impugned award').

2. The impugned award was rendered in the context of disputes that have arisen between the parties in connection with the Sub Contract Agreement dated 10.12.2004.

Factual Context:

3. In the year 2004-05, the respondent was awarded a contract bearing no. 10/EE-I/PF P/2004-05 relating to construction of a bridge across river Yamuna near Geeta Colony, Delhi by the Public Works Department, Delhi (hereafter the `PWD').

4. Thereafter, on 10.12.2004, the respondent sub-contracted a part of the works, as contained in Section II of the Bill of Quantities, to the appellant in terms of the Sub Contract Agreement (hereafter `the Agreement'). The contract between the parties was on a back-to-back basis, as is evident from Clause 13 of the Agreement. The stipulated date for commencement of the works was 30.01.2005 and the entire works were to be completed within a period of thirty-six months, that is, on or before 29.01.2008.

5. The appellant claims that it was to be paid in accordance with the rates paid by the PWD plus escalation in terms of Clause 9 of the Agreement.

6. Admittedly, the works were completed by the appellant on 22.12.2008. The appellant claims that the delay in execution of the works was due to breaches committed by the PWD and thus, it was entitled to an additional payment on account of the increase in rates of material, labour and other items etc.

7. Certain disputes had also arisen between the respondent and PWD in relation to the contract executed between them. Accordingly, by a communication dated 04.06.2008, the respondent invoked the agreement to refer those disputes to arbitration. The appellant states that since it was not a party to the contract subsisting between the respondent and PWD, it could neither join the arbitral proceedings nor seek any relief in this proceeding. The appellant claims that there was an understanding between the parties, whereby the respondent had also agreed to pursue the claims in respect of the works executed by the appellant.

8. The appellant raised bills on the respondent for the works executed. Admittedly, the respondent paid the said bills. The appellant had also issued certificates evidencing the receipt of the amount of the bills.

9. The arbitral proceedings initiated by the respondent against the PWD culminated in an arbitral award dated 26.12.2011, in favour of the respondent. Thereafter, PWD, by way of an application under Section 34 of the A&C Act [being OMP No 420/2012], challenged the said arbitral award before this Court. By an order dated 31.03.2014, the said application was allowed by a Single Bench of this Court and the said award was set aside in respect of certain claims.

10. Thereafter, the respondent filed an appeal against the order dated 31.03.2014 under Section 37 of the A&C Act [being FAO OS No 264/2014]. On 15.03.2016, a Coordinate Bench of this Court allowed the said appeal and partially modified the judgment passed by the learned Single Judge, thereby reinstating the award in respect of certain claims preferred by the respondent against PWD. Thereafter, both the respondent and PWD challenged the said order by filing their respective Special Leave Petitions before the Supreme Court.

11. The appellant claims that the arbitral award secured by the respondent also includes claims in respect of escalation pertaining to the work executed by the appellant.

12. On 27.04.2016, the appellant states that it issued