An arbitral award can be set aside under Section 34 of the Arbitration and Conciliation Act, 1996 if it is made in the absence of evidence for the claims.

JUDGMENT :

PRATEEK JALAN, J.

By way of this petition under Section 34 of the Arbitration and Conciliation Act, 1996 [“the Act”], the petitioner-National Highways Authority of India [“NHAI”], challenges an award dated 21.02.2019, by which a learned arbitral tribunal has adjudicated disputes between the parties under agreement dated 08.09.2005.

2. By the order dated 26.04.2023, the statement of Mr. Rajiv Kapoor, learned counsel for NHAI, was recorded to the effect that he presses the challenge in the petition only with regard to claim Nos. 5, 6 and 8. The challenge to claim Nos. 6 and 8 was rejected, and notice was issued only with regard to claim No. 5.

3. Mr. Kapoor today submits that he wishes to challenge the award also on three other claims, of relatively less significant amounts, in respect of which (akin to the challenge in claim No. 5) the learned arbitral tribunal has made an award in the absence of evidence. The aforesaid claims are claim Nos. 10, 14 and 19.

4. Dr. Swaroop George, learned counsel for the respondent, states that he was informed in advance that the petitioner intended to press the petition with regard to these three additional claims, and that he has taken instructions in respect of all four claims.

5. With the consent of Dr. George, notice is issued with regard to claim Nos. 10, 14 and 19 also, returnable forthwith.

6. The challenge in all these four claims [claim Nos. 5, 10, 14 and 19] is predicated on a single ground i.e., that the arbitral tribunal has noticed that there was no material led by the claimant [the respondent herein] in support of quantification of these claims, but has awarded various sums without any evidence.

7. The relevant extracts of the arbitral award in this regard are reproduced below:—

CLAIM NO. 5 : CLAIM FOR EXTRA AMOUNT PAID TO THE BANKS FOR EXTENDING BANK GUARANTEES-RS. 3,40,69,195/-

“E-5. A reference to Annexure CA-3 on pages 204 to 209 of SOC shows the details of commission paid by the Claimant to the bank for the extension of BGs from time to time. However, no evidence for the various figures of the commission allegedly paid by the Claimant has been filed.

***** ***** *****

E-7. AT is convinced that some commission has to be paid to the bank for extending the BGs. The claim cannot be denied simply on the plea of absence of evidence for the same by the Claimant. In the absence of the appropriate evidence filed by the Claimant, the AT restricts the claimed amount to 90% of the claim i.e. Rs. 2,93,43,847/- and considers at would be fair and reasonable to award a sum of Rs. 2,64,09,462/- (Rupees Two Crores Sixty Four Lakh Nine Thousand Four Hundred Sixty Two only) in favour of the Claimant.”

[Emphasis supplied]

CLAIM NO. 10 : CLAIM FOR EXTRA CHARGES DUE TO CONTINUATION OF BASE CAMP FOR AN AMOUNT OF RS. 50,00,000/-

“J-2. The Claimant has made a claim of Rs. 50,00,000/- on account of alleged expenses towards land lease and other related costs in maintaining its base camp up to the date of termination.

However, it has not given any details for the claim

***** ***** *****

J-5. In the absence of any details filed by the Claimant, the AT is inclined to make only a fair assessment and considers that it would be fair and reasonable to award a sum of Rs. 10,00,000/- (Rupees Ten Lakhs).”

[Emphasis supplied]

CLAIM NO. 14 : CLAIM FOR LOSS DUE TO

Unauthorized deduction for entry tax for an

AMOUNT OF RS. 51,66,398/-.

“N-6 Although no evidence about the figures shown in CA-8 has been given by the Claimant, the fact about imposition of Entry Tax by the State Govt. of Assam subsequent to 28 days prior to date of submission of the bid cannot be denied. Further, the Respondent has not denied the alleged deduction of Entry Tax by it from 2005 to 2014 In view of above, the AT is inclined to come to conclusion that the claim is admissible and considers it as fair and reasonable to award asum of Rs. 51,66,398/- (Rupees Fifty One Lacs Sixty Six Thousand Three Hundred Ninety Eight Only) in favour of the Claimant.”

[Emphasis