The court confirmed that arbitration awards can only be set aside under limited grounds, primarily concerning public policy violations or patent illegality, reaffirming the binding nature of clear contractual obligations.

JUDGMENT

Neena Bansal Krishna, J. (Oral)

CM APPL. 18527/2022 (Exemption)

Allowed, subject to all just exceptions.

Application is disposed of.

FAO(OS) (COMM) 84/2022 & CM APPL. 18526/2022 (stay)

1. An appeal under Section 37 1(c) of the Arbitration and Conciliation Action, 1996 (hereinafter referred to as the Act, 1996) read with Section 13 of the Commercial Courts Act,2015 has been filed to challenge the judgment dated 24th December, 2021 of the learned Single Judge dismissing the objections filed by the appellant challenging the award granting Rs.2,21,32,831/- and interest to the respondent.

2. The facts in brief are that the respondent Jaiprakash Hyundai Consortium (hereinafter referred to as "JHC") which is a consortium between M/s Jaiprakash Associates Limited, a Company registered under Companies Act, 1956 and M/s Hyundai Engineering & Construction Company Ltd., a Company registered under the laws of South Korea, submitted its bid in response to the invitation to bid by the appellant in 1992, for various works including civil work of pressure shaft and Power House complex relating to Napth Jhakri Hydroelectric Project (hereinafter referred to as "the project"). The respondent emerged as the successful bidder and the Letter of Award 26th May, 1993 was issued for a total value of Rs.475.01 crores which was followed by the Agreement dated 24th June, 1993. The date of commencement of the project was 1st July, 1993 and was expected to complete power shafts within a period of fifty seven months and the power house complex within sixty three months from the date of commencement of the project. Resultantly, the scheduled dates of completion were 31st March, 1998 and 30th September, 1998 respectively.

3. The dispute arose between the parties regarding the appellant's failure to perform its obligations under the Agreement. According to the respondent, in terms of sub clause 4.5(i) of Chapter IV of Additional Conditions of Contract (ACC) which was included as an integral part of the Agreement, the appellant was obligated to provide the respondent with AC 3 phase 50 cycle, 440/400 V construction power at various work sites, colonies and offices. However, appellant failed to provide the requisite construction power causing the respondent to incur additional expenses for stepping down and stepping up the power for distribution and consumption at the site. A meeting was held on 9th July, 1993 between the parties wherein the appellant undertook to provide 22 KV construction power at various sites even though this was not in conformity with the terms of Agreement. The respondent by its letter dated 3rd September, 1993 disputed it as not being in conformity with the contract and claimed that as per the terms of the Agreement, appellant was obligated to provide construction power at 440/400 V instead of 22 KV. The appellant reiterated its stand to supply the construction power at 22 KV in various meetings subsequently held between the parties between 9th October, 1993 to 12th October, 1993.

4. JHC, the respondent vide its letter dated 23rd December, 1993 communicated to the appellant that it required construction power at 440/400 V at five points stated therein. The construction power was admittedly provided only at two points; viz. one point in the power house complex and at one point near Butter Valve House. The respondent claimed that it had incurred additional expenditure since it had to install a large number of transformers and other gadgets for stepping down the construction power from 22 KV to 440/400 V.

5. The additional expenses incurred by the respondent were submitted to the Enginee