Limited grounds for interference with an Arbitral Award under Section 34 of the Arbitration Act

ORDER

Chandra Dhari Singh, J. (Oral)--The petitioner by way of the present petition under Section 34 of the Arbitration & Conciliation Act, 1996, (hereinafter referred to as `Arbitration Act.) seeks the following prayers:

"i) summon the records from the Arbitral Tribunal; and

ii) allow the present petition and set aside the challenged part of the impugned Award dated 11.02.2019; and

iii) Stay the operation of the challenged part of the impugned Award dated 11.02.2019 during pendency of the proceedings as the said award has become in-executable on being challenged under section 34 of the Arbitration and Conciliation Act, 1996; and/or

iv) pass such order or further orders as may deem fit in the facts and circumstances of the case in favour of the Petitioner."

BACKGROUND

2. The following course of events has led to the filing of the instant petition:

a. The petitioner is an autonomous body working under the supervision of the Ministry of Road Transport and Highways, Government of India, responsible for executing projects for development and maintenance of the National Highways. The respondent is an Engineering and Contracting Company having its registered office Hyderabad.

b. The parties came together and entered into a Concession Agreement dated 5th September 2007 for the work of widening the existing 2 lane portion from Km 230/000 to Km 278/000, covering 53.017 kilometers, on National Highway No. 7 (NH-7) in the state of Andhra Pradesh, to 4 lanes through a Concession on BOT Annuity basis, which was to be completed within 24 months.

c. During the course of the work, several disputes arose between the parties and the respondent herein invoked the arbitration clause. An Arbitral Tribunal (hereinafter referred to as "Tribunal") was appointed and the arbitration proceedings were initiated, wherein the disputes were bifurcated into ten claims.

d. Upon conclusion of the proceedings, the learned Tribunal made the Arbitral Award dated 11th February 2019. In the said Award, the learned Tribunal rejected the Claims No. 1, 6, and 10 and partially accepted the rest of the claims except Claim No. 7, which was settled between the parties. The learned Tribunal awarded the interest at the rate of SBI PLR plus 2% per annum as per the contract in addition. The learned Tribunal directed that the principal amount as well as the interest thereupon was to be paid by the petitioner herein to the respondent, failing which the entire amount, including interest, would carry the interest rate as aforesaid.

3. The petitioner, being aggrieved by the said Award, approached this Court impugning the Arbitral Award dated 11th February 2019, challenging the findings of the learned Tribunal qua Claims No. 2, 3, 4, 5, 8 and 9.

SUBMISSIONS

4. Learned counsel appearing on behalf of the petitioner submitted that the learned Arbitral Tribunal has passed the impugned Award in contravention of the agreement between the parties and in violation of Section 28(3) of the Arbitration Act. It is submitted that the challenged portion of the Arbitral Award is in conflict with public policy of India and results in unjust enrichment of the respondent causing loss to the public exchequer.

5. It is submitted that the learned Tribunal refined the Contract and the terms thereof while making the Award in its contravention and hence, invites the interference of Section 34 of the Arbitration Act.

6. Qua Claim No. 1, that is, compensation for non-handing over the land, it is submitted that the scheduled date for handing over of the Existing Right of Way (hereinafter "EROW") was on or before 2nd March 2008. The additional right of way was on or before 1st September 2008, i.e., six months from the commencement date. The remaining 50% Additional Right of Way (hereinafter "AROW") was on or before 1st March 2009, i.e., 12 months from the commencement date. The contract further stipulates the dates for handing over of land for service road and wayside amenities was on or before 1st September 2009,