Judicial intervention under Section 34 of the Arbitration Act is limited; an award may only be set aside for contravention of public policy or patent illegality, rather than disagreements over contractual interpretation.

JUDGMENT :

HARISH VAIDYANATHAN SHANKAR, J.

1. The present petition has been filed under Section 34 of the Arbitration and Conciliation Act, 1996Arbitration and Conciliation Act, 1996, A&C Act, challenging theAward dated 19.02.2010 , Impugned Award passed by the learned Sole Arbitrator in the matter titled “M/s TDI International India Ltd. v. Delhi Metro Rail Corporation Ltd.”

2. At the outset, it is pertinent to note that the challenge in the present Petition is confined only to Claim Nos. 1 and 3. The findings rendered by the learned Arbitrator in respect of the remaining claims have attained finality and are not under challenge before this Court.

BRIEF FACTS:

3. The Petitioner, who was the Claimant in the arbitral proceedings, is a company engaged in the business of outdoor, indoor, and transit advertising. In October 2006, the Respondent herein (Respondent in the arbitral proceedings) invited tenders for the grant of advertisement rights in Line 3 (East Extension) of MRTS Phase-I, covering Mandi House, Pragati Maidan, and Indraprastha Metro Stations.

4. The Petitioner participated in the tender process and was declared the successful bidder. Accordingly, a Letter of Acceptance dated 09.11.2006 (revised on 15.11.2006), LoA was issued in its favour. Thereafter, a Licence Agreement dated 27.11.2006, License Agreement was executed between the parties.

5. Under the terms of the Licence Agreement, the Respondent was to provide prefabricated advertising panels inside Mandi House Metro Station and bare advertising spaces inside Pragati Maidan and Indraprastha Metro Stations. The bare spaces were to be identified and developed by the Petitioner, subject to the Respondent’s approval. The licence period was stipulated to be four years from the date of handover or from the date of notice for takeover of the first panel, whichever was earlier, subject to the provision of electricity to the concerned panel.

6. Pursuant to the LoA, the Petitioner submitted the required location layout plans on 16.11.2006 and the electrical routing plans on 22.01.2007. The Respondent approved both the location layout plans and the electrical plans on 03.03.2007.

7. However, by letter dated 07.03.2007, the Respondent withdrew its approval in respect of two advertising sites, namely Site Nos. 29 and 30, admeasuring 800 sq. ft. (74.50 sq. m.), situated on the Foot Over Bridge at Indraprastha Metro Station.

8. It is stated that the Petitioner objected to the withdrawal of the aforesaid sites and sought their restoration, contending that the Foot Over Bridge formed an integral part of the station premises and that no viable alternate locations were available. The Respondent, on the other hand, maintained that advertising was permissible only within the station premises and called upon the Petitioner to propose alternate sites.

9. It is further stated that despite the withdrawal of the said sites, the Respondent continued to raise invoices towards the licence fee, including charges attributable to the withdrawn area. The Petitioner disputed such billing and claimed remission of the licence fee corresponding to the withdrawn advertising space. The Respondent, however, asserted that the licence fee remained payable strictly in terms of the Licence Agreement.

10. At Mandi House