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IN THE HIGH COURT OF DELHI
Vibhu Bakhru, J.
Sowil Limited - Appellant
Versus
Indian Highways Management Company Limited - Respondent
O.M.P. (COMM) 93 of 2022 and IA No. 2573 of 2022
Decided On : 22-02-2022




The court affirmed the Arbitral Tribunal's decision that the contract's obligations regarding traffic survey locations were properly interpreted, denying claims for idling losses as the respondent met minimal obligations under the agreement.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Sections 9, 11, and 17 - Disputes regarding the execution of an Agreement for traffic surveys on National Highways leading to arbitration - Petitioner claims damages for idling costs due to alleged delays by Respondent - Court found that Respondent’s action in issuing fresh tenders was not illegal and upheld the Tribunal's award. (Paras 21, 85)

(B) Interpretational issues - The Tribunal correctly interpreted the Agreement’s clauses regarding the obligations to provide traffic survey locations, emphasizing that the variation in locations pertains to each round, not cumulatively for all rounds. (Paras 37, 64)

(C) The Court underscored that the tribunal did not err in its findings regarding idling charges; SOWIL was not entitled to such claims due to fulfillment of minimum assignments by IHMC. (Paras 39, 40)

Facts of the case:
The petitioner, SOWIL, challenged an Arbitral Award arising out of disputes under an Agreement dated 28.10.2014 with the responding IHMC concerning traffic surveys. Disputes revolved around the interpretational issues of contract terms and execution delays.

Findings of Court:
The Arbitral Tribunal's conclusions regarding the legality of the tender process and the claim for idling costs were upheld, deeming the Tribunal’s reasoning consistent and lawful.

Issues: The main issues revolved around whether IHMC's actions constituted a breach of contract and the entitlement of SOWIL to idling costs.

Ratio Decidendi: The Court held that as the Tribunal ruled correctly within the bounds of the contract interpretation, SOWIL's claims for idling costs were invalid since necessary assignments were provided.

Result: Petition dismissed; the impugned award is upheld.

Table of Content
1. background of the contractual disputes. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19)
2. claims raised before the arbitral tribunal. (Para 20)
3. conclusions and reasoning of the arbitral tribunal. (Para 21)
4. arguments made by sowil regarding idling charges. (Para 22 , 23 , 24 , 25 , 26)
5. analysis of contract terms and tribunal findings. (Para 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43)
6. final decision and dismissal of the petition. (Para 44)

JUDGMENT

Vibhu Bakhru, J. The petitioner (hereafter "SOWIL") has filed the present petition impugning the Arbitral Award dated 10.11.2021 (hereafter the "impugned award") passed by the Arbitral Tribunal comprising of a Sole Arbitrator (hereafter the "Arbitral Tribunal"). The said award was rendered in the context of disputes that have arisen between the parties in connection with an agreement dated 28.10.2014 (hereafter the "Agreement").

Factual Background

2. SOWIL is a company incorporated under the Companies Act, 1956. The respondent (hereafter "IHMC") is also an incorporated company and is engaged in providing services pertaining to management of toll collection on national highways through electronic toll systems. IHMC is, inter alia, engaged in the activity of assessing the volume of traffic on National Highways; to standardize the process of data collection; and, for creating a central data repository through traffic surveys using portable Automatic Traffic Counter-cum-Classifiers (hereafter "ATCC").

3. The Ministry of Road, Transport and Highways (hereafter "MORTH"), Government of India had instructed IHMC to conduct traffic surveys at around 1600 locations on National Highways in India.

4. IHMC issued a Request for Proposal (hereafter "RFP") for engaging agencies to conduct ATCC on sections of National Highways in seven different zones, twice a year, for a period of five years (ten rounds of traffic surveys). The surveys were required to be conducted at traffic survey locations to be specified. SOWIL submitted its bid pursuant to the RFP and was awarded the contract for executing the work in respect of Zone-5 (Odisha, West Bengal and North-Eastern States). On 28.10.2014, the parties entered into the Agreement for carrying out the aforesaid work. SOWIL commenced the work in terms of the Agreement on 28.11.2014.

5. During the years 2014 to 2017, SOWIL completed five rounds of surveys at certain specified locations. SOWIL claims that IHMC had delayed notifying the final list of survey locations from the third round onwards.

6. On 30.06.2017, IHMC once again invited tenders for conducting surveys (ATCC) at 284 locations in Zone-5 (which was now restricted to the States of Orissa and West Bengal).

7. Admittedly, IHMC delayed notifying the locations for conducting the sixth round survey. SOWIL claims that IHMC specified the locations in a piecemeal manner rendering the task unworkable at the material time.

8. On 08.03.2018, IHMC issued a Notice Inviting Tenders for the work relating to the balance four rounds of ATCC. At the material time, SOWIL was awaiting information regarding the workable locations for conducting the sixth round survey.

9. Aggrieved by the invitation of fresh tenders for the remaining four rounds, SOWIL filed a petition under Section 9 of the Arbitration & Conciliation Act, 1996 (hereafter the "A&C Act") being OMP(I)(COMM) No.169 of 2018. The said petition was listed before this Court on 19.04.2018 and this Court passed an order restraining IHMC from terminating the Agreement. On 24.04.2018, this Court passed another interim order restraining IHMC from entering into any agreement pursuant to the Notice Inviting Tenders dated 08.03.2018.

10. In view of the disputes between the parties, SOWIL issued a notice dated 26.05.2018 under Section 21 of the A&C Act invoking the Arbitration Agreement for adjudication of the disputes under the Agreement. In t

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