The non-consideration of a clause in the Concession Agreement by the Arbitral Tribunal is not a ground to set aside the arbitral award, unless it is an error that goes into the root of the award and can be said to be patently illegal.

JUDGMENT

Satish Chandra Sharma, C.J. The instant appeal, under Section 37 of the Arbitration and Conciliation Act (hereinafter referred to as "the Arbitration Act"), has been filed against Judgment dated 29.10.2021 ("Impugned Judgment") passed by the Learned Single Judge in O.M.P. (Comm.) No. 377/2020 filed by the Respondent under Section 34 of the Arbitration Act challenging the arbitral award dated 02.11.2019. The Ld. Single Judge vide the Impugned Judgment has set aside the arbitral award on the ground that the same is contrary to the express terms of the contract.

2. Shorn of details, the brief facts leading up to the filing of the present appeal are as under:

i. The Appellant herein i.e. the National Highways Authority of India (NHAI), on 03.05.2000 issued notice inviting proposals for shortlisting of bidders for a project described as "widening of existing 2-lanes to 6-lanes divided carriageway facility including rehabilitation of existing 2-lanes from Km 273.500 to Km 363.885: on Jaipur-Kishangarh section of NH-8 in Rajasthan on Build Operate and Transfer (BOT) basis" (hereinafter referred to as "the Project").

ii. The bid of the Respondent, which is a consortium of M/s GVK International NV and M/s B Seenaiah & Company (Projects) Ltd. was accepted by the Appellant by a letter of acceptance dated 01.03.2002.

iii. On 08.05.2002, the Respondent entered into Concession Agreement in respect of the Project with the Appellant. It is stated that as per Schedule `C. of the Concession Agreement, the Respondent constructed the Toll Plazas at Km. 286/450 to 286/950 (Jaipur End) and Km 260/200 to Km 360/700 (Kishangarh End).

iv. The Provisional Completion of the said project was achieved on 09.04.2005 and Final Completion Certificate was issued on 20.10.2005 by the Independent Consultant (IC) and thereafter the project has been in the Operation & Maintenance Phase. It is stated that while the Completion Certificate was issued, the project was not completed as the Respondent was required to construct the ETC system in one toll lane in each direction.

v. On 17.03.2010, a project review meeting was held regarding the issue of increased traffic at the Jaipur Toll Plaza and the Respondent was directed to prepare and submit a proposal for construction of additional toll lanes at the toll plaza.

vi. On 22.03.2010, the Respondent submitted its proposal wherein it stated that the project would require additional facilities and there should be a change in scope of the Concession Agreement as per Good Industry Practices which reads as under:

"Sub.: Jaipur-Kishangarh Expressway (NH-8) BOT Project.

Scope for additional requirements of Facilities/Underpasses/Toll Collection Booths on Jaipur-Kishangarh Expressway (NH-8) BOT Project.

Dear Sir,

With reference to the above cited subject and looking at the rate of growth of traffic against project, we are of the opinion that in coming future i.e. by year 2013; this project would be requiring additional facilities, other than as mentioned in Concession Agreement of project, mainly because of extension of SEZ's, new areas of development along the Highway, Extension/increase in population of habitant areas(Urban Areas).

In lieu of the above said, we herewith submit a proposal for review & suggestions on the additional facilities that would be required as this augmentation of facilities shall initiate a change of scope order as per Good Industry Practices.

Thanking you & assuring you the best of services at all times,

Yours faithfully,

P.K. Reddy,

GM-Maintenance"

vii. On 03.07.2012, the IC recommended to the Project Director of the Appellant for construction of additional toll lanes/additional toll collection facilities to reduce waiting time of vehicles as per Article XVII of the Concession Agreement. It is stated that the Respondent disagreed with the aforesaid opinion of the Independent Consultant and that construction of additional toll lanes as additional facilities would be contrary to the Concession Agreement.

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