The court confirmed that arbitrators' findings on contractual breaches and damages claims must be upheld unless shown to be improper within limited review under Section 34 of the Arbitration Act.

JUDGMENT

[VIA VIDEO CONFERENCING]

Sanjeev Narula, J. (Oral)

CONTENTS

1. The present petitions under Section 34 of the Arbitration and Conciliation Act, 1996 [hereinafter `the Act'] have been filed by BHEL seeking setting aside of two separate Impugned Arbitral awards, both dated 10th March, 2020, in respect of Contract No. 659/2010 and 640/2009, which have been challenged separately in O.M.P. (COMM) 471/2020 and 472/2020 respectively [hereinafter referred to as `Awards'].

2. Under the afore-noted Awards, the Sole Arbitrator has partly allowed the claims of the Respondent herein-Vasavi Power Services Private Limited (being the Claimant in arbitration) [hereinafter referred to as `VPSPL'] and rejected BHEL's counter- claims.

3. The nature of claims of VPSPL in the two contracts - which were subject matter of two separate references - are nearly identical. The heads of claim in both the petitions are also overlapping, barring certain additional heads of claims in O.M.P. (COMM) 472/2020. The reasoning and the fact finding is also similar, since the two contracts were interdependent and interrelated. In these circumstances, although there are two separate awards passed by the Arbitrator, the Court finds it apposite to pass a common judgment to decide the two petitions arising out of the two separate awards.

BRIEF FACTS

4. For the sake of brevity and considering the commonality in the two petitions, facts of the case summarised hereinafter as well as the extracts of Impugned Award are culled out from OMP (COMM) 472/2020. The factual differences and objections raised by BHEL that are found to be exclusive to a particular petition will be noted and dealt with separately.

A. The Contracts

4.1. VPSPL, being the L-1 bidder, was awarded the work for "Erection, Testing, Commissioning, Trial Operations and Handing Over of 2X 250 MW STG with related auxiliaries and piping at 1500MW Pragati III CCPP of Pragati Power Corporation at Bawana, Delhi" by BHEL vide the following contracts: (i) No. 621/2009 dated 07th September, 2009, (ii) No. 640/2009 dated 22nd December, 2009, and (iii) No. 659/2010 dated 30th March, 2010. Although the three contracts are separate, but some parts are interdependent for the purpose of completion and execution. For the present judgment, we are concerned with two contracts, being: (i) Contract No. 640/2009, under which, value of the work awarded was Rs.7.5 crores, scheduled commencement date was 19th January, 2010, zero date was decided as 18th March, 2010, and the scheduled completion date as 18th January, 2011 (later extended to December, 2011); and in respect of (ii) Contract No. 659/2010, the value of the work awarded was Rs.7.5 crores, scheduled commencement date and the zero date was decided as 18th March, 2010, and scheduled completion date was 17th March, 2011.

B. The Dispute

4.2. Due to alleged delay, inaction and inability of VPSPL to complete the works in a timely and satisfactory manner, BHEL - vide letter dated 25th and 28th October 2011 - withdrew part of the work from VPSPL's scope of work under the Contracts No. 640/2009 and 659/2010 respectively, (also referred to as `descoped work')