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2023 Supreme(Del) 2853

IN THE HIGH COURT OF DELHI AT NEW DELHI
Navin Chawla, J.
National Highway Authority of India – Appellant
Versus
Rohtak Panipat Tollway Pvt. Ltd. – Respondent
O.M.P. (COMM) 286 of 2018 & I.A. 8863 of 2018, I.A. 2943 of 2019
Decided On : 16-02-2023

Advocates appeared:
Mr. Narender Hooda, Senior Advocate with Mr. Arun Kumar Batta, Ms. Neha Kumari, Mr. Abdul Wahid, Ms. R. Ahuja, Mr.Shaurya Lamba, Advocates, for the Petitioner.
Ms. Roopali Chaturvedi and Ms. Sadiqua Fatima, Advocates, for the Respondent.

The main legal point established in the judgment is the limited jurisdiction of the Court under Section 34 of the Arbitration and Conciliation Act, the interpretation of contractual terms and facts, and the conditional nature of the Independent Engineer's opinion on the grant of Provisional Completion Certificate.

Headnote:

Arbitration and Conciliation Act - Disputes arising out of Agreement for Four Laning of Rohtak - Panipat Section of NH-71A - Claims allowed by Arbitral Tribunal - Challenge under Section 34 of the Act - Limited jurisdiction of the Court - Interpretation of contractual terms and facts - Claim no.1 allowed based on proper appreciation of contractual terms and facts - Claim no.2 set aside due to conditional nature of Independent Engineer's opinion on grant of Provisional Completion Certificate

Fact of the Case:

The petitioner filed a petition under Section 34 of the Arbitration and Conciliation Act, challenging the Arbitral Award dated 06.10.2017 passed by the learned Arbitral Tribunal, as well as the order dated 20.02.2018 passed by the learned Arbitral Tribunal on an application under Section 33(1)(a) and (b) of the Act. The disputes between the parties arose out of the Agreement for the work of 'Four Laning of Rohtak - Panipat Section of NH-71A from KM 0.00 (KM 63.00 OF NH 10) to KM 80.858 (KM 83.39 of NH-1) in the State of Haryana under the NDPH Phase III on Design, Build, Finance, Operate and Transfer ('DBFOT') Basis' awarded by the petitioner to the respondent. The learned senior counsel for the petitioner submitted objections to claim no.1 and claim no.2, while the learned counsel for the respondent argued that the Impugned Award is based on a proper appreciation of the contractual terms and the facts, and, therefore, deserves no interference from the Court.

Finding of the Court:

The Court found that the challenge of the petitioner to the Impugned Arbitral Award on Claim no.1 was rejected, as the Impugned Award granted Claim no.1 in favour of the respondent based on proper appreciation of contractual terms and facts. However, the Impugned Award, so far as it granted Claim no.2 in favour of the respondent, was set aside due to the conditional nature of the Independent Engineer's opinion on the grant of Provisional Completion Certificate.

Issues: The issues involved in the case were the interpretation of contractual terms, the applicability of Clause 41.1 of the Concession Agreement, the limitation period for raising claims, and the conditional nature of the Independent Engineer's opinion on the grant of Provisional Completion Certificate.

Ratio Decidendi: The Court's decision was based on the limited jurisdiction under Section 34 of the Act, the interpretation of contractual terms and facts, and the conditional nature of the Independent Engineer's opinion on the grant of Provisional Completion Certificate.

Final Decision: The challenge of the petitioner to the Impugned Arbitral Award on Claim no.1 was rejected, while the Impugned Award granting Claim no.2 in favour of the respondent was set aside.

JUDGMENT

Navin Chawla, J.

1. The present 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 06.10.2017 passed by the learned Arbitral Tribunal, as well as the order dated 20.02.2018 passed by the learned Arbitral Tribunal on an application under Section 33(1)(a) and (b) of the Act.

2. The disputes between the parties arose out of the Agreement for the work of "Four Laning of Rohtak - Panipat Section of NH-71A from KM 0.00 (KM 63.00 OF NH 10) to KM 80.858 (KM 83.39 of NH-1) in the State of Haryana under the NDPH Phase III on Design, Build, Finance, Operate and Transfer ('DBFOT') Basis" awarded by the petitioner to the respondent.

3. By the Impugned Award, the learned Arbitral Tribunal has allowed the claims of the respondent herein.

SUBMISSIONS OF THE LEARNED SENIOR COUNSEL FOR THE PETITIONER:

CLAIM NO. 1

4. Claim no.1 of the respondent was towards additional lead required for transportation of material on site. The learned senior counsel for the petitioner submits that the mining operation in the State of Haryana was lying closed since 01.03.2010. He submits that the Concession Agreement was signed between the parties on 09.03.2010 and the work commenced in April 2011, that is, after the closure of the mining operation. He submits that, therefore, the respondent could not have been allowed to take the benefit of Clause 41.1 of the Concession Agreement which provides for increase in costs due to change in law.

5. He submits that the claim for additional lead was raised by the respondent for the first time vide letter dated 13.05.2014, while the notice claiming arbitration was issued on 11.02.2016. He submits that, therefore, not only is the claim not maintainable in terms of the Concession Agreement, but is also barred by the Law of Limitation.

6. Placing reliance on Geo Miller and Company Private Ltd. v. Chairman, Rajasthan Vidyut Utpadan Nigam Limited., (2020) 14 SCC 643 and Bharat Sanchar Nigam Limited & Another v. Nortel Networks India Private Ltd., (2021) 5 SCC 738, the learned senior counsel for the petitioner submits that as the cause of action arose on 01.03.2010 and the notice claiming arbitration was issued only on 11.02.2016, the claim was barred by limitation. He submits that the learned Arbitral Tribunal has ignored these important facts in adjudicating the claim no.1 in favour of the respondent.

7. He further submits that as per the Government Order dated 21.04.2012, sand mine in the Districts of Sonepat and Panipat and two small stone mines in the District of Mahendergarh remained operational even after 01.03.2010. Therefore, there was no compelling reason for the respondent to have allegedly chosen to procure the material from outside the State of Haryana. In any case, for this unilateral decision of the respondent, its claim for differential in prices was not justified and could not have been granted.

8. He submits that the learned Arbitral Tribunal has erroneously placed reliance upon the Feasibility Report, despite the fact that the Clause 2.13 of the RFP clearly states that the Feasibility Report is only a preliminary document and that nothing contained therein would be binding upon the Authority nor would it confer any right on the bidders. He submits that the Feasibility Report was only for the purpose of appraising the Concessionaire about the topography of the area and other different details mentioned in the said document, which are only indicative and not binding.

9. The learned senior counsel for the petitioner further submits that the learned Arbitral Tribunal has also erred in placing reliance upon the Letter dated 15.04.2013 from the Independent Engineer (in short, the 'IE') to the petitioner, wherein, the IE allowed the additional carriage charges with regards to transportation of stone aggregates from the State of Rajasthan as change of scope of work. He submits that the said let

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