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IN THE HIGH COURT OF DELHI
Vibhu Bakhru, Amit Mahajan, JJ.
Gammon India Limited - Appellant
Versus
National Highways Authority of India - Respondent
FAO(OS) (COMM) 26 of 2022 and CM No. 7018 of 2022
Decided On : 24-11-2022




Inconsistent findings across arbitral awards do not provide grounds for setting aside an award under Section 34 of the Arbitration & Conciliation Act, 1996.

Headnote:(A) Arbitration & Conciliation Act, 1996 - Section 37(1)(c) - Appeal against dismissal of application to set aside arbitral award - The Impugned Award was rendered with findings that each award must stand independently. The court reiterated that inconsistent findings between arbitral awards do not justify setting aside an award. The court emphasized that the merits of disputes are not reviewed under Section 34. (Paras 24, 28, 30, 32)

(B) Arbitral Proceedings - The contractor's claims were assessed across three separate arbitral awards, with the Second Award being upheld due to its independent reasoning and lack of patent illegality. (Paras 26, 36)

(C) Practice Directions - The court issued directions to avoid conflicting arbitral awards, emphasizing that such directions are suggestions rather than mandatory requirements. (Paras 39, 45)

Facts of the case:
The appeal is brought by the contractor against the order dismissing their application seeking to set aside the Second Arbitral Award due to perceived inconsistencies with earlier awards and delay attributed to NHAI.

Findings of Court:
The learned Single Judge found the Second Award well-reasoned, separate from previous awards, and consistent with principles under the A&C Act.

Issues: The key issues revolved around whether the Second Award could be set aside due to its inconsistency with the First and Third Awards and the legitimacy of the practice directions issued by the court.

Ratio Decidendi: The court held that mere inconsistency between arbitral awards is not a valid reason to set aside an award under Section 34 of the A&C Act. It underscored the need for awards to stand on their own merits without conflation.

Result: Appeal dismissed.

Table of Content
1. failure to complete contract on time. (Para 2 , 3 , 4)
2. disputes underlying multiple arbitral proceedings. (Para 5 , 6)
3. claims raised in second arbitration process. (Para 13 , 14 , 15 , 16 , 17)
4. findings and awards in third arbitration. (Para 18 , 19 , 20 , 21 , 22)
5. inconsistency of awards does not nullify individual awards. (Para 28 , 30 , 31)
6. judicial approach towards separate arbitral awards. (Para 29 , 32 , 35 , 37)
7. judicial discretion in handling overlapping arbitration disputes. (Para 38 , 39 , 40 , 41 , 42 , 44)

JUDGMENT

Vibhu Bakhru, J. The appellants have filed the present intra court appeal under Section 37(1)(c) of the Arbitration & Conciliation Act, 1996 (hereafter `the A&C Act') impugning an order dated 23.06.2020 (hereafter `the impugned order') passed by the learned Single Judge. By the impugned order, the learned Single Judge dismissed the appellant's application under Section 34 of the A&C Act, numbered as OMP (Comm) 392/2020, seeking to set aside the arbitral award dated 21.02.2011(hereafter `the impugned award' or `the second award').

Factual Context

2. On 23.12.2000, a contract for the "Work of Widening To 4/6 Lanes and Strengthening of Existing 2 Lane Carriageway of NH-5 in the State of Orissa from Km. 387.700 to Km. 414.000 (Khurda to Bhubaneswar)" (hereafter `the Project') was executed between Gammon Atlanta JV, a Joint Venture of Gammon India Ltd. and Atlanta Ltd (hereafter `the contractor') and National Highways Authority of India (hereafter `NHAI'). The appellants are the constituent joint venture partners of Gammon Atlanta JV (the contractor)

3. The date of commencement of the contract was stipulated to be 15.01.2001 and the Project was to be completed within a period of thirty-six months, that is, by 14.01.2004. The contract value was set as Rs.118.9 crores.

4. The Project, however, could not be completed within the stipulated period and extension of time for completing the Project was granted till 31.12.2006. In the month of March, 2007, vehicular traffic was allowed on the main carriageway. According to the contractor, the said date was to be considered as the date of taking over of the carriageway and completion of the Project.

Arbitrations

5. Various disputes arose between the parties over the course of the Project. The disputes between the parties were subject matter of three arbitral proceedings, which are hereafter referred to as the First Arbitration, Second Arbitration, and the Third Arbitration. These arbitration proceedings culminated into three arbitral awards including the impugned award/the Second Award. These arbitral awards are referred to as the First Award, the Second Award, and the Third Award. These awards were rendered by different arbitral tribunals comprising of three members each. The arbitral tribunals making the respective awards are referred to as the First Arbitral Tribunal, the Second Arbitral Tribunal, and the Third Arbitral Tribunal.

6. The controversy, in the present petition, relates to the Second Award rendered by the Second Arbitral Tribunal. The contractor claimed that after the contract was signed between the parties, an order dated 16.01.2001 was issued for commencing the work (commencement order), however, by that time, the Engineer had not been appointed and therefore, it was not possible to commence any work. M/s Sheladia Associates were appointed as the Engineer and the contractor was informed of the same on 05.03.2001. The contractor claims that there were various impediments in commencing and executing the works, including on account of delay in handing over the site, removal of hindrances, delay in taking decisions, and delay in release of funds. The contractor claims that even as on 21.07.2003, only 46% of the hindrance free site was handed over to the contractor.

The First Arbitration

7. These were referred to the Dispute Resolution Board (DRB) constituted as per Sub-clause 67.1 of the Conditions of Particular Ap

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