Back
IN THE HIGH COURT OF DELHI
Vibhu Bakhru, J.
KMC Construction Ltd. - Appellant
Versus
National Highway Authority of India - Respondent
O.M.P. (COMM.) 458 of 2020, I.A. Nos. 257 of 2021 and 2649 of 2021
Decided On : 23-12-2021
| Table of Content |
|---|
| 1. factual background of the arbitration case. (Para 1 , 2 , 3) |
| 2. overview of claims and counter-claims. (Para 4 , 5) |
| 3. modification application filed by kmc. (Para 6) |
| 4. arguments presented by kmc in arbitration. (Para 7 , 8 , 9 , 10 , 11 , 12 , 13) |
| 5. court's analysis and observations on claims. (Para 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45 , 46 , 47 , 48 , 49 , 50 , 51 , 52 , 53 , 54 , 55 , 56 , 57 , 58) |
| 6. final ruling and order of the court. (Para 59 , 60) |
JUDGMENT
Vibhu Bakhru, J.
1. The petitioner (hereafter `KMC') has filed the present petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereafter `the A&C Act') impugning an Arbitral Award dated 24.09.2019 (hereafter `the impugned award') rendered by an Arbitral Tribunal constituted by three members (hereafter `the Arbitral Tribunal'). KMC also impugns an order dated 21.11.2019 (hereafter the `revised order'), whereby its application under Section 33 of the A&C Act was rejected.
2. KMC challenges the impugned award in respect of its Claims Nos. 3, 5, 13, 19 and 22.
3. Briefly stated, the facts that are necessary to address the controversy are stated hereunder.
3.1. NHAI, by a Letter of Acceptance (LoA) dated 22.08.2001, awarded a contract for the work of `Widening to four lanes and strengthening of the existing two lane carriageway between Km 278/000 to Km 340/000 of Udaipur-Ratanpur-Gandhinagar Section of NH-8 in Rajasthan, package no. UG-1' (hereafter the `Project') to KMC. Subsequently, the parties entered into an agreement dated 05.10.2001 (hereafter `the Agreement'). In terms of the Agreement, KMC agreed to execute the works at a Contract Price of Rs.164,75,76,353/-. The works for the Project were to commence on 30.10.2001 and completed by 30.04.2004.
3.2. It is KMC's case that NHAI had failed to handover the site to it and had provided an incorrect Detailed Project Report (DPR). Despite this, KMC completed the project two months prior to the stipulated date of completion. The works were completed on 28.02.2004 at a Contract Price of Rs.248,00,00,000/- against the original Contract Price of Rs.164,75,76,353/-. KMC submitted its completion statement on 08.05.2004. It is KMC's case that the Engineer did not process the payments due to it and extended the defect liability period. Finally, the Engineer issued the Defect Liability Certificate on 24.05.2006. The Engineer issued a Statement at Completion proposing a recovery of Rs.18,16,34,122/- against the Final Bill of Rs.70,51,84,650/-. Further, the Engineer did not give its decision on the other sums payable to KMC.
3.3. NHAI invoked the Performance Bank Guarantee furnished by KMC in the sum of Rs.16,47,57,636/-.
3.4. In view of the disputes, KMC invoked the Arbitration Agreement by a letter dated 16.09.2006 and nominated Sh PV Rama Raju as an Arbitrator. NHAI nominated Sh VS Dixit as its nominee Arbitrator. Both nominated Arbitrators appointed Sh Prafulla Kumar as the Presiding Arbitrator and the Arbitral Tribunal was constituted on 12.11.2006.
3.5. In the meanwhile, KMC also filed a Writ Petition (bearing W.P. No. 18269/2006) before the High Court of Andhra Pradesh seeking interdiction of the invocation of the Bank Guarantee. By an order dated 29.11.2006, that High Court restrained NHAI from encashing the
3.6. Before the Arbitral Tribunal, KMC raised twenty-two claims aggregating to Rs.135,96,28,549/-. NHAI filed its Statement of Defence and also raised counter-claims.
3.7. By a letter dated 11.10.2013 addressed to the Arbitral Tribunal, both parties requested the Arbitral Tribunal to keep the arbitral proceedings in abe
The court emphasized that arbitration awards must adhere strictly to contract terms regarding payment and interest, rejecting arbitrary reductions of entitlement.
The court held that the rejection of KMC's claims for escalation, additional payment, early completion bonus, and loss due to non-release of Performance Bank Guarantee was not illegal. However, the c....
The court affirmed that arbitral awards are upheld unless blatant illegality is shown, emphasizing the tribunal's final authority under Section 34 of the Arbitration and Conciliation Act.
Patent illegality should be illegality which goes to the root of the matter. In other words, every error of law committed by the Arbitral Tribunal would not fall within the expression ‘patent illegal....
The inapplicability of the ground of patent illegality to international commercial arbitration and the importance of interpreting specific contractual clauses in determining the validity of claims an....
The main legal point established in the judgment is the interpretation and application of Section 34 of the arbitration and Conciliation act, 1996 to an international commercial arbitration, and the ....
The court affirmed the limited scope of review under Section 34 of the Arbitration and Conciliation Act, emphasizing respect for arbitral awards unless stark violations of public policy or procedural....
The main legal point established in the judgment is that the decision of the Arbitral Tribunal must be based on evidence and material on record, and the Court will not interfere with the award unless....
The court upheld the tribunal's award, concluding that the claims did not fall under 'excepted matters' and corroborated the contractor's entitlement to claims based on inadequate adjudication by the....
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
