The exclusive rights of a logistics service provider under an agreement for an event encompass both VIK and non-VIK services, obliging the event organizer to provide an opportunity for the provider to match third-party bids, failing which it constitutes breach of contract.

JUDGMENT

Vibhu Bakhru, J. The Ministry of Youth Affairs and Sports (hereinafter `MYAS') has filed the present petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter `the A&C Act') impugning an Arbitral Award dated 29.10.2018 (hereinafter `the impugned award') delivered by the Arbitral Tribunal comprising of three members-Justice (Retd.) Shri R.C. Lahoti, Justice (Retd.) Shri D.P. Wadhwa, and Justice (Retd.) Shri S.C. Agrawal as the Presiding Arbitrator (hereinafter `the Arbitral Tribunal').

2. The impugned award was delivered by the Arbitral Tribunal in respect of disputes that had arisen between the parties in connection with the Logistics Service Provider Sponsorship and Services Agreement dated 16.07.2010 (hereinafter `the Agreement').

Factual Context

3. In 2009, the Organising Committee of Commonwealth Games, 2010 (hereinafter the `OC') issued a Request for Proposal (hereinafter `RFP') inviting bids for appointing a Logistics Service Provider for the OC and Queens Baton Relay on the terms and conditions stipulated therein.

4. Pursuant to the RFP, the respondent (hereinafter `Agility') submitted its bid and was declared the successful bidder. Thereafter, by a Letter of Intent dated 10.03.2010 (hereinafter `LOI'), the contract for providing the Logistic Services was awarded to Agility. Subsequently, the LOI was revised and amended on 11.03.2010.

5. In terms of the LOI, Agility was to provide Value-in-Kind (hereinafter `VIK') services for an amount of Rs.11 crores and Value-in-Cash (hereinafter `VIC') for an amount of Rs.1.5 crores. Further, Agility was required to furnish a Performance Bank Guarantee (PBG) to the tune of 10% of the VIK, that is, Rs.1.10 crores; and, Corporate Guarantee/Indemnity to the tune of 100% of the value of the VIK, that is, Rs.11 crores. However, according to the Arbitral Tribunal, the amended LOI dated 11.03.2010 did not contain the pre-condition of providing PBG of 10% of the VIK.

6. The OC directed Agility to begin logistics support for various supporting events that were scheduled as test events. However, the services provided during the test events were not covered under the scope of services provided in the RFP or any other document. Thus, it was claimed by Agility that a specific assurance and promise was made by the OC to duly and adequately compensate Agility for the services so provided.

7. On 16.07.2010, the Agreement was executed between Agility and the OC.

8. Thereafter, by a communication dated 13.10.2010, Agility requested that it be provided the signed copy of the Agreement. However, Agility claims that it was provided a photocopy of the Agreement on 21.12.2010.

9. Agility had submitted its bid aggregating Rs.12.5 crores. The same comprised of two components - VIK services of the value of Rs.11 crores and VIC services for a sum of Rs.1.5 crores. Agility had agreed to provide the said services in consideration of the sponsorship as offered in terms of the RFP. Clause 31.1 of the RFP indicated the rationale for the bidders to offer logistics services in consideration for being the official logistics sponsor. The said clause is set out below:

"31.1 The Sponsorship Offer of the Logistics Tender is a unique feature of the Tender. Since the Organising Committee of the Commonwealth Games, Delhi 2010, will be providing a huge International Platform to the Logistics Service Provider as the Logistics Partner for the Games. It is required that the Organising Committee also gets a value in return."