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2023 Supreme(Del) 702

IN THE HIGH COURT OF DELHI AT NEW DELHI
NAVIN CHAWLA, J.
Union of India – Appellant
Versus
Glove Civil Projects Pvt. Ltd. - Respondent
O.M.P. (COMM) 511 of 2022 and I.A. 21971 of 2022
Decided on : 18-04-2023

Advocates:
Advocate Appeared:
Mr. Vineet Dhanda, CGSC with Mr. Hussain Taqvi, Ms. Gurleen Kaur, Mr. Archit Agarwal, Advs. along with Mr. A.K. Goel, Chief Engineer (HLL Life care Ltd.)
Mr. Rahul Malhotra and Ms. Anchal Tiwari, Advs.

The interpretation of the contract is within the exclusive domain of the learned Arbitrator, and the court would not interfere with such interpretation.

Headnote:

Arbitration and Conciliation Act - Construction Contract - Section 34 of the Arbitration and Conciliation Act, 1996 - [Clause 5 of the Contract, Section 55 of the Indian Contract Act, 1872, and the judgment of the Supreme Court in Hind Construction Contractors v. State of Maharashtra, (1979) 2 SCC 70 : AIR 1979 SC 720] - 5, 9, 11, 34 - The court analyzed the intention of the parties regarding the essence of time in the contract, the grant of extension of time, and the effect of delay on the completion of the project. The court found that time was not of the essence of the contract based on the provisions of the contract and the conduct of the parties. The court emphasized that the interpretation of the contract is within the exclusive domain of the learned Arbitrator and would not interfere with such interpretation. The court dismissed the petition challenging the Arbitral Award.

Fact of the Case:

Disputes arose from a construction contract for the Construction of New Emergency and Trauma Centre, OPD and OBG Blocks at Jawahar Lal Nehru Medical College, Aligarh Muslim University, Aligarh (U.P.). The work was completed with a delay of 32 months, and the final bill was remitted by the petitioner to the respondent. The respondent invoked the arbitration agreement, and the learned Sole Arbitrator awarded various reliefs to the respondent.

Finding of the Court:

The court found that time was not of the essence of the contract based on the provisions of the contract and the conduct of the parties. The court dismissed the petition challenging the Arbitral Award.

Issues: The issues included the essence of time in the contract, the effect of delay on the completion of the project, and the grant of extension of time.

Ratio Decidendi: The court emphasized that the interpretation of the contract is within the exclusive domain of the learned Arbitrator and would not interfere with such interpretation.

Final Decision: The court dismissed the petition challenging the Arbitral Award.

JUDGMENT :

Navin Chawla, J.

This petition has been filed under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the ‘Act’), challenging the Arbitral Award dated 28.02.2022, along with the amended Award dated 13.04.2022, passed by the learned Sole Arbitrator.

BRIEF BACKGROUND:

2. The disputes between the parties arose out of the ‘Contract Agreement no. PMSSY-II/ALIGARH/2011-12/PACKAGE-I for the Construction of New Emergency and Trauma Centre, OPD and OBG Blocks at Jawahar Lal Nehru Medical College, Aligarh Muslim University, Aligarh (U.P.)’. The subject Contract was awarded by the petitioner to the respondent vide Notice of Award dated 17.10.2011, with a contract value of Rs. 67,97,60,335/-. The stipulated time for completion of the contract was set at 21 months with effect from 01.11.2011, with a completion date of 31.07.2013. Admittedly, the work was completed with a delay of 32 months on 31.03.2016. The final bill was remitted by the petitioner to the respondent on 09.10.2017.

3. On 08.09.2018, the respondent invoked the arbitration agreement between the parties whereupon, a petition was filed under Section 11 of the Act and the learned Sole Arbitrator was appointed by this Court on 30.05.2019.

4. The learned Sole Arbitrator by way of the Impugned Award, awarded the following reliefs to the respondent:—

    “383. Accordingly, for the reasons set out hereinabove, the Tribunal, under the provisions of the Arbitration Act, allows the claims in favour of the Claimant and against the Respondent as per the following terms and quantifying the same:

Claim No./Claim Description Claim Amount Allowed

Claim No./Claim Description

Claim Amount Allowed

Claim No. 1-for Payment under Clause 10C of the GCC

Rs. 94,39,878/-

Claim No. 2- Compensation for escalation in the cost of Steel and Cement in the extended period

Rs. 21,45,779/-

Claim No. 3- Compensation for escalation on materials (other than Cement and Steel) in the extended period

Rs. 1,92,33,376/-

Claim No. 4 (i)- Cost towards renewal of Bank Guarantees in the extended period

Rs. 27,20,017/-

Claim No. 4 (ii)- Refund of extra interest recovered by the Respondent on mobilization advance

Rs. 38,87,054/-

Claim No. 4 (iii)- Interest amount withheld against Milestone(s)

Rs. 3,54,698/-

Claim No. 5 (a)- Compensation for on-site Manpower Retention in the extended period

Rs. 1,36,81,159/-

Claim No. 5 (b)- Compensation for on-site Tools and Plant Retention in the extended period

Nil

Claim No. 5 (c)- Compensation for on-site Electricity charges in the extended period

Rs. 13,19,850/-

Claim No. 6- Damages for Head Office Overheads and expenses in the extended period

Rs. 4,35,04,661/-

Claim No. 7- Insurance Charges for the extended period

Rs. 20,70,433/-

Claim No. 8-Claim for rate less paid than the agreement rate for fire alarm

Nil

Claim No. 9- A total Simple Interest of [@7.5% on Rs. 7,85,29,480/- for 69 months].

Rs. 4,36,45,877/-

Claim No. 10- towards cost of Arbitration and other expenses.

Rs. 22,00,000/-

Total

Rs. 14,42,02,782/-

    384. Resultantly, in view of the foregoing analysis and findings, the Tribunal hereby passes an award, under the provisions of the Arbitration Act, for a total sum of Rs. 14,42,02,782/- in favour of the Claimant and against the Respondent. The said amount is hereby recoverable in law by the Claimant from the Respondent by virtue of this Award.”

5. By way of a correction order dated 13.04.2022, the following amendment was made in the impugned award:—

    “5. Accordingly, the claim description, as allowed, in the table to paragraph no. 383 at Column 9 is corrected thus:

“Claim No. 9 - A total simple interest of 7.5% on Rs. 9,83,56,905/- for 71 months””

SUBMISSIONS OF THE LEARNED COUNSEL FOR THE PETITIONER:

6. The l

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