JUDGMENT

1. The present petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 assails an award dated 17.12.2010 passed by an Arbitral Tribunal, pursuant to an arbitration agreement incorporated in the Contract Agreement dated 14.11.2002 entered into between the parties.

The background facts:

2. The contract between the parties is a construction contract, involving construction of "Civil Works of Dam, Spillway and Power House of 400 MW Koteshwar Hydro Electric Project at Koteshwar, Uttarakhand". A letter of award (hereinafter referred to as "LoA") was issued in favour of the Respondent on 31.8.2002, followed by contract agreement dated 14.11.2002; the contract period was 45 months from the date of LoA. The contract sum was Rs.334,51,66,092/- [Rupees Three Hundred Thirty Four Crores Fifty One Lakhs Sixty Six Thousand and Ninety Two Only].

3. The contract contains an arbitration clause for resolution of disputes through arbitration by an Arbitral Tribunal comprising of three arbitrators, each party appointing one arbitrator and the two appointed arbitrators appointing the presiding arbitrator.

4. A total of 14 claims were raised by the respondent; 6 counter claims were raised by the petitioner, which have been adjudicated by the Arbitral Tribunal vide the impugned award.

5. The scope of work as elaborated in the "special conditions of contract" is as under:

"i. Construction of river diversion works, i.e., lining of diversion tunnel along with intake structure and outlet works, upstream and downstream cofferdams. Sain Nala Cofferdam and its diversion, and concrete plug in diversion tunnel.

ii. Construction of concrete gravity dam comprising non-overflow blocks, spillway and stilling basin with training walls etc., under-sluices, bridge on the spillway, including foundation and abutment treatment and underground grouting works.

iii. Construction of power house complex, comprising power intakes, 4 Nos. shafts and penstocks, power house (4 x 100 MW), access tunnel, tail race channel, transformer platform over control rooms, switch yard platform, cable trench/gallery and permanent service road from dam crest to left abutment, power house and switch yard. The nature of work includes dewatering and pumping, excavation and disposal, underground excavation of embankment, concreting, drilling and grouting, reinforcements etc., as set out in pages 336 & 337 of Volume-1 of the contract.

The exclusions from the contract are also agreed as specified at page-337 and these exclusions are: supply and installation of gates, guides; hoisting system for spillway intake structure, draft tubes; turbines, governors, generators, various electrical & mechanical systems; transformers, switch yard structures, internal and external electrification in dams, etc., as detailed in page-337 of Volume-1 of the contract.

The Major components under the scope of work are; Completion of the balance works of river diversion tunnel, construction of a concrete dam of 97.5 mtrs height and 253 mtr long, along with power intakes and spillway, sluice blocks, stilling basin for energy dissipation down stream of spillway; four numbers of pen stocks, pressure shafts and steel lined pressure tunnels; a surface power house complex to house, the turbines, governors, generators, electrical equipment etc., to accommodate 4 units of 100 MW each capacity as detailed in Sec. A.2 Page-T7 of Volume-2 of the contract."

6. The work envisaged under the c