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2026 Supreme(Del) 92
IN THE HIGH COURT OF DELHI AT NEW DELHI
HARISH VAIDYANATHAN SHANKAR, J.
RPG Cables Limited – Petitioner
Versus
Bharat Sanchar Nigam Ltd. – Respondent
O.M.P. (COMM) 76 of 2017
Decided On : 13-02-2026
For the Petitioner:Mr. Jayant Bhushan, Senior Advocate along with Ms. Shreya Jain, Mr. Gaurav Tanwar, Mr. Amartya Bhushan and Mr. Yujit Mehra, Advocates.
For the Respondent:Mr. Dinesh Agnani, Senior Advocate along with Ms. Leena Tuteja and Ms. Ishita Kadyan, Advocates.
The court upheld that a minimum service life of Optical Fibre Cables, guaranteed at 20 years, imposes liability regardless of warranty expiry, reinforcing obligations established in contractual terms.
Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 34 - Challenge to arbitral award - Petitioner contested liability for defective Optical Fibre Cables (OFCs) beyond warranty claims, arguing it was solely due to installation issues. Arbitrator held Petitioner liable for the sum of Rs. 12.63 crores and stipulated reimbursement amounts. (Paras 1, 2, 12, 35)
(B) Legal Principles - Obligation beyond warranty - The arbitrator affirmed that the minimum service life of 20 years was contractual, binding even after warranty expiry; failure prior to this term indicated liability. (Paras 51, 56)
(C) Findings of Court - Evidence showed deterioration mainly in colored fibres, attributable to substandard materials, rejecting the installation defect defense. Arbitrator's verdict deemed reasoned and enforceable, as per contractual obligations. (Paras 46, 60, 72)
(D) Issues - Whether the Petitioner could be held liable beyond the warranty period; and the validity of arbitrator's findings regarding causation of cable defects. (Paras 33, 49) (E) Ratio Decidendi - Petitioner liable for the defective OFCs as findings supported they failed well before the promised lifespan; proper deference to arbitrator's technical conclusions was maintained. (Paras 44, 72) (F) Result - Petition dismissed; no grounds for interference in the arbitral award were established. (Paras 83, 84)
| Table of Content |
|---|
| 1. challenge to arbitral award under section 34 (Para 1 , 2 , 3) |
| 2. factual background of ofc supply issues (Para 4 , 5 , 6 , 7 , 8 , 9) |
| 3. timeline of disputes and arbitration commencement (Para 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17) |
| 4. evidence presentation and award issuance (Para 18 , 19) |
| 5. petitioner's contentions on liability and warranty (Para 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27) |
| 6. errors and allegations against the arbitrator's award (Para 28 , 29 , 30 , 31 , 32 , 33) |
| 7. respondent's arguments against interference (Para 35 , 36 , 37 , 38 , 39) |
| 8. scope of judicial review in arbitration (Para 43 , 44 , 46 , 47 , 48 , 49) |
| 9. mandatory minimum service life of cables (Para 50 , 51 , 52 , 53 , 54) |
| 10. evaluation of technical evidence and expert findings (Para 55 , 56 , 57 , 58 , 59 , 60 , 61) |
| 11. defective manufacturing and deterioration findings (Para 62 , 63 , 64 , 65 , 66 , 67) |
| 12. finality of arbitrators' decisions in technical disputes (Para 68 , 69 , 70 , 71) |
| 13. consideration of historical precedents in arbitration (Para 72 , 73 , 74 , 75 , 76 , 77) |
| 14. commercial gestures and admissions of liability (Para 78 , 79 , 80 , 81) |
| 15. conclusion on the validity of the award (Para 82 , 83 , 84 , 85) |
JUDGMENT :
HARISH VAIDYANATHAN SHANKAR, J.
1. The present Petition has been filed under Section 34 of the Arbitration and Conciliation Act, 1996 , [A&C Act], assailing theArbitral Award dated 05.11.2008 , [Impugned Award] passed by the learned Sole Arbitrator, to the limited extent that the said Award directs the Petitioner to pay a sum of Rs. 12.63 crores to the Respondent. In addition to challenging the aforesaid direction, the Petitioner also seeks, by way of the present Petition, appropriate orders granting the reliefs which were originally claimed by the Petitioner before the learned Arbitral Tribunal.
2. By the impugned Award, the learned Arbitrator substantially rejected the claims raised by the Petitioner and also disallowed a significant portion of the counter-claims preferred by the Respondent. However, while partly allowing the Respondent’s counter-claims, the learned Arbitrator held that the Petitioner is liable to pay a sum of Rs. 12.63 crores to the Respondent towards the cost of unusable Optical Fibre Cables, OFCs supplied under the contract. The learned Arbitrator further directed that, upon receipt of the said amount, the Respondent shall release all pending payments due to the Petitioner and its sister concern and shall also release the Performance Bank Guarantees furnished by the Petitioner in relation to the contract.
3. The learned Arbitrator additionally directed the Respondent to reimburse the Petitioner an amount of Rs. 1,37,500/- towards arbitration fees, upon receipt of the aforesaid sum towards the cost of unusable cables. It was further directed that each party shall bear its own respective costs of the arbitration proceedings and that no interest shall be payable by either party.
BRIEF FACTS:
4. The Respondent, Bharat Sanchar Nigam Limited, BSNL, formerly functioning as the Department of Telecommunications, DOT, has been entrusted with the responsibility of establishing, operating, and maintaining telecommunication services across the country. In furtherance of this mandate, and prior to the incorporation of BSNL in October 2000, the DoT routinely invited tenders for the procurement of OFCs from approved vendors. For administrative convenience, BSNL discharges its functions through various Telecom Circles and Regional Telecom Project and Maintenance Circles for the execution of specialised projects and maintenance activities.
5. In pursuance of the aforesaid procurement policy, the DoT issued tenders dated 15.04.1998, 11.02.1999, and 13.04.1999. Based on these tenders, five Purchase Orders were placed upon the Petitioner between 09.10.1998 and 13.08.1999 for the supply of 12 Fibre and 24 Fibre OFCs. The total quantity ordered comprised 4,100 kilometers of 12 Fibre cables and 1,261 kilometers of 24 Fi
