The court upheld that a party must substantiate any claims under an arbitration agreement with credible evidence; failure to do so results in rejection of claims under the risk and expense clause.

JUDGMENT

Sanjeev Narula, J. (Oral)

I.A. 923/2022 (seeking exemption for filing certified copies of the orders/documents and for filing dim and illegible documents)

1. Exemption is granted, subject to all just exceptions.

2. The Petitioner shall file better copies of exempted documents, compliant with practice rules, before the next date of hearing.

3. Accordingly, the application stands disposed of.

I.A. 924/2022 (for condonation of delay of around 57 days in refiling the petition)

4. For the grounds and reasons stated there in, the application is allowed and delay in refiling the petition is condoned.

5. The application is disposed of.

O.M.P. (COMM) 60/2022 & I.A. 922/2022 (for stay of Award)

6. The present petition under Section 34 of the Arbitration and Conciliation Act, 1996 [hereinafter, "the Act"] is directed against the Award dated 26th June, 2021 passed by the learned Sole Arbitrator, whereby claims of the Petitioner (Respondent at arbitration) stood rejected and the claims of the Respondent (Claimant therein) were allowed in part to the extent of Rs.2,78,96,798/- along with interest thereon.

FACTS

7. The Respondent viz. Ahaar Consumer Products Pvt. Ltd. [hereinafter, "AHAAR"], registered with Ministry of Defence, Union of India [hereinafter, the "UOI"] secured a contract through open tender for the supply of `Wheat Atta Whole Meal, Sujji, Maida and Dalia' for 21 Sup Depots in Northern Command Zone for the financial years 2011-12 and 2012-13 [hereinafter, "Agreement"]. The scheduled quantity and value was different for each depot, due to its location & difficult reach.

DISPUTE

8. As per AHAAR, quantities as ordered, stood supplied. However, it is stated that the complete payment was not made. UoI controverts and contends that AHAAR failed to supply the food items on several occasions, and consequently, local purchase(s) had to be undertaken by various supply depots, once in the year 2011-12 and 12 times in the year 2012-13 at their risk & expense.

AHAAR invoked arbitration, leading to the appointment of the Arbitral Tribunal on 7th October, 2018.

AT ARBITRATION

9. At Arbitration, AHAAR made a claim of Rs.6,69,01680.90/- along with interest payable at 11% per annum from 1st April, 2013 amounting to Rs.10,16,47.787/-. UOI, on the other hand, defended the claim and made a counter-claim for an amount of Rs.1,31,01,201.28/-.

10. The parties led evidence, and on consideration thereof, the learned Arbitrator allowed the claims of AHAAR in part, and rejected the counterclaims of the UoI. Aggrieved with the award, UoI has filed the instant petition.

CONTENTIONS ADVANCED

ON BEHALF OF UOI

11. Ms. Monika Arora, Central Government Standing Counsel, submits that the learned Arbitrator failed to take into consideration the documents and evidence placed on record during arbitration - which establish the counterclaim of the UOI. She submits that AHAAR did not make the complete supplies of the ordered goods and that the total payment made for the stock received on 2011-13 were as follows:

"2(b) Total payment made for stocks received 2011-2013:

12. Ms. Arora submits that since there was a shortfall in supplies, UoI was entitled to take recourse to the contractual stipulation - apropos the condition of risk and expense. She explains that the requirement for procuring su