IMPORTANT POINT
The main legal point established in the judgment is the interpretation of the force majeure clause, the arbitrability of certain claims, and the application of legal principles established in previous judgments.

JUDGMENT

Prateek Jalan, J. (Oral)

1. By way of this petition, under Section 34 of the Arbitration and Conciliation Act, 1996 ["the Act"], the petitioner-National Highway Authority of India ["NHAI"] assails an arbitral award dated 31.10.2019 in respect of disputes between the parties under a Contract Agreement dated 01.11.2016 ["the Contract"] for collection of user fee for Laxmipuram Toll Plaza on National Highway No. 5 in the State of Andhra Pradesh.

2. The respondent was responsible for collection of toll fee, and payment of sums as specified in the Contract to the petitioner. It claimed relief from its payment obligations, on the ground that the Central Government's demonetisation of .500 and .1000 notes on 08.11.2016 constituted a force majeure event. Three disputes were adjudicated by the learned sole arbitrator:

i. Application of force majeure clause;

ii. waiver of toll fee payment and refund of penalty with interest; and

iii. refund of expenses for the toll suspension period from 08.11.2016 to 02.03.2017 on account of demonetisation.

3. Mr. Angad Mehta, learned counsel for the respondent contends that all three issues have been decided against NHAI in a judgment of a coordinate Bench dated 17.02.2022 in NHAI vs. M/s C.P. Rama Rao (Proprietor), Judgment dated 17.02.2022 in O.M.P.(COMM) 215/2019: 2022 LAWPACK(Del) 87193: 2022(3) R.A.J. 464. ["CPR judgment"].

4. On the last date of hearing i.e., 01.02.2024, Mr. Yash Kapoor, learned counsel for NHAI submitted that the aforesaid judgment is pending appeal before the Division Bench. Mr. Mehta was, therefore, directed to place the orders of the Division Bench on record, so that the Court can determine as to whether the adjudication of this petition ought to await the result of the appeal.

5. Mr. Mehta has placed on record the orders in FAO(OS)(COMM) 215/2022, which is directed against the judgment dated 17.02.2022. The order of the Division Bench dated 22.01.2024, records as follows:

"1. The only ground alleged by the learned counsel appearing for the appellant for assailing the Arbitral Award dated 14.02.2019 and the impugned order is that the Arbitral Award has not considered the appellant's counter-claim in respect to the period after 28.02.2017.

2. It is contended that the period covered by the Force Majeure event ended on 28.02.2017, however, the appellant's claim was also for a period till 04.08.2017. There is no breakup of the appellant's counter-claim for the period prior to 28.02.2017 and thereafter."

Emphasis supplied.

6. In the present case, it is undisputed that the petitioner's claims pertain only to the period of operation of the force majeure clause, as evident from the enumeration of the disputes reproduced above. The contention of the respondent in claim Nos. 1 and 3 is that it was not liable to make payment of toll fee to NHAI during the period immediately following the demonetisation. In addition to waiver of toll fee during the aforesaid period [Claim No.1], the respondent sought refund of expenses incurred [Claim No.3] and refund of penalty imposed by NHAI [Claim No.2].

7. The CPR judgment is admittedly in respect of a similar claim, with the difference that NHAI, in that case, had a counter-claim in respect of toll fee for the post force majeure period. It is that aspect which is pending before the Division Bench, as recorded in the order dated 22.01.2024. I am, therefore, satisfied that the hearing of this petition need not await the result of the appeal against the CPR judgment.

Re: Claims No.1 and 3:

8. The respondent's case is based upon Clause 25(b) of the Contract, which defines a force majeure event in the following terms:

"25(b) FORCE MAJEURE EVENT:

Except as stated in Clause (a) above, Force Majeure event means an event or circumstances or a combination of events and circumstances referred to in this clause which are beyond the reasonable control of the Party or Parties to this Contract and which party could not have prevented or reasonably overcome with the exerc