An order dismissing an application under Section 23(3) of the Arbitration Act is procedural and not an interim award amenable to challenge under Section 34.

JUDGMENT :

1. The Petitioner has approached this Court under Section 34 of the Arbitration & Conciliation Act, 1996 challenging the Order dated 11.04.2024 passed by the Arbitral Tribunal consisting of a Sole Arbitrator dismissing an application filed by the Petitioner/Counter-Claimant under Section 23(3) of the Arbitration and Conciliation Act, 1996.

2. Shorn of unnecessary details, the facts leading to the present petition are as under:-

i. It is stated that the Petitioner herein floated a tender for "Construction of Roads and Drains in Solapur STPP" for a total order value of Rs.22,35,16,730/-. It is stated that the Respondent made a bid. It is stated that a Letter of Award dated 18.10.2019 was issued in favour of the Respondent herein and the Contract Agreement had been executed between the parties. It is stated that the work was to be completed within 15 months from the scheduled date of work.

ii. It is stated that disputes have arisen between the parties under the said Letter of Award and a Petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 being ARB. P. No.1367/2022 was filed by the Respondent for the appointment of an Arbitrator. Vide Order dated 27.02.2023, this Court had appointed the former Judge of the Apex Court as the Sole Arbitrator to adjudicate the disputes between the parties under the Agreement. The fees of the Sole Arbitrator was fixed as per DIAC Rules.

iii. It is stated that the Petitioner/Counter-Claimant herein has filed nine counter-claims totalling to Rs.1,19,27,70,295/- and contended that as per the Contract, the dispute resolution process by an Arbitrator through arbitration can adjudicate claims and counter- claims only to a maximum of Rs.25 crores. Since the present claim had gone much beyond 25 crores, an application under Section 23(3) of the Arbitration and Conciliation Act, 1996 was filed by the Petitioner/Counter-Claimant withdrawing Claim No.1 which is the loss on account of non-inclusion of capital cost in the tariff amounting to Rs.21,51,25,592/- and counter-claim No.5 which is the return on equity amounting to Rs.83,36,11,670/-. It is stated that the said application was rejected by the Arbitrator stating that once the claims and counter-claims have been filed, they are not amenable to any change as agreed by the parties vide the contract agreement. It is this Order of the Arbitrator which is under challenge in the instant petition.

3. Learned Counsel appearing on behalf of the Petitioner/Counter Claimant contends that the Arbitration Clause postulates that the Arbitrator could adjudicate disputes only to a maximum of Rs.25 Crores and not beyond that. It is stated that though the Contract stipulates that once the claim or the counter-claim has been made, it is final and not amenable to change. A harmonious reading of the various clauses of the arbitration only mean that the maximum limit is Rs.25 crores and that within that limit of Rs.25 crores, whatever claim or counter-claim is made cannot be subjected to any change.

4. The learned Arbitrator had rejected the argument of the Petitioner/Counter-Claimant herein and had dismissed the application filed under Section 23(3) of the Arbitration and Conciliation Act, 1996 for withdrawal of the counter-claims No.1 and 5.

5. Learned Counsel appearing on behalf of the Petitioner herein has virtually reiterated the submissions made by him before the Arbitrator.

6. Per contra, learned Counsel appearing on behalf of the Respondent- Claimant stated that the order dismissing the application under Sect