IMPORTANT POINT
The court upheld the arbitral tribunal's findings on delays caused by the Municipal Corporation but set aside the award for loss of profit due to insufficient evidence.

JUDGMENT :

VIBHU BAKHRU, J.

1. The Municipal Corporation of Delhi (hereafter the MCD) has filed the present appeal under Section 37(1)(c) of the Arbitration & Conciliation Act, 1996 (hereafter the A&C Act) impugning an order dated 19.04.2023 (hereafter the impugned order) passed by the learned Commercial Court in OMP(COMM) No.17/2019 filed by the North Delhi Municipal Corporation (since merged with MCD) under Section 34 of the A&C Act assailing the arbitral award dated 15.05.2019 (hereafter the impugned award) passed by an Arbitral Tribunal comprising of a Sole Arbitrator (hereafter the Arbitral Tribunal).

2. The impugned award was rendered in the context of the disputes that have arisen between the parties in connection with the work of “construction of a poly clinic in Bawana (Narela Zone Delhi)”, which was constructed by the respondent (hereafter the Contractor) at an aggregate value of Rs.1,41,42,502/- in terms of the Work Order No. E.E.(PR)/TC/05-06/32 dated 10.06.2005 (hereafter the Agreement). In terms of the Agreement, the work was to commence on or before 19.06.2005 and to be completed within a period of eighteen months, that is, on or before 18.12.2006. The execution of the work was inordinately delayed and the same was completed on 05.10.2011, that is, after more than seventy-six months from the stipulated date of commencement of the work.

3. The Contractor claimed that he had commenced the work in right earnest immediately after the same was awarded to him. However, the MCD (erstwhile North Delhi Municipal Corporation) had failed to fulfil its reciprocal promises thus disabling him to complete the work within the stipulated period. The Contractor further alleged that the MCD had failed to provide (a) hinderance free site for the execution of the work; (b) drawings/ details/ designs for the work; (c) necessary instructions and designs in time; and, (d) timely payments for the work executed including the additional/extra work as required.

4. The disputes between the parties were referred to arbitration before the Arbitral Tribunal constituted by this Court by an order dated 28.03.2014 in a proceeding passed in ARB. P. No.58/2014. The arbitration was required to be conducted in accordance with the Rules of the Delhi International Arbitration Centre (DIAC). Before the Arbitral Tribunal, the Contractor filed a Statement of Claims raising several claims which are summarized below:

“Claim No. Particular Amount (in Rs.)

1. Amount for extra deviation of executed work 28,85,934/-

2. Amount for execution of extra item 4,54,708/-

3. Security Amount 5,00,000/-

4. Arrears of 10C 10,21,016/-

5. Damages for prolongation of contract from the stipulated date of completion to actual date of completion 47,14,167.30

6. Interest @18% on delay payment of running bills 6,76,696/-

7. Interest @18% on the total claim amount

Total 1,02,52,521/-

8. Cost”

5. The Arbitral Tribunal framed the following issues for consideration:

“1. Whether the Claimant is entitled to recover an amount of Rs.1,02,52,521/- from the Respondent as per the details given in para 31 of the Statement of Claim?

2. Whether the Respondent was responsible for delay in completion of the contract for the reasons pleaded in the Statement of Claim? Or Whether the claimant was responsible for the delay in the execution of the Work?

3. Relief.”

6. Both the parties led evidence. The Contractor (Satya Pal Gupta) examined himself as CW1 and furnished an affidavit in lieu of examination-in-chief (Ex.CW1/A). He also tendered various documents which were exhibited as Ex.CW1/1 to Ex.CW1/96. The MCD examined Sh. B.S. Meena, Executive Engineer (Project) as RW1. He also tendered his affidavit in lieu of examination-in-chief (Ex.RW-1/A) and tendered various documents which were exhibited as Ex.RW-1/1 to Ex.RW-1/30.

7. The Arbitral Tribunal considered the rival contentions including that it did not have the jurisdiction to entertain the claims.

8. The Arbitral Tribunal rejected t