An arbitrator's award must provide intelligible reasoning; failure to do so violates public policy, allowing for it to be set aside under Section 34 of the Arbitration Act.

JUDGMENT :

HARISH VAIDYANATHAN SHANKAR, J.

1. The present petition has been filed under Section 34 (2) of the Arbitration and Conciliation Act, 1996 , [Act], seeking to set aside the Arbitral Award dated 18.08.2017 , [Impugned Award], to the extent of the Petitioner's claims which were rejected or not considered, passed by the learned Arbitral Tribunal in the matter titled “M/s Gorkha Security Services v. Directorate of Health Services”.

2. At the outset, it is noted that during the course of oral arguments, the Petitioner expressly confined its submissions solely to the findings rendered by the learned Arbitrator in respect of Claim No.4 in the Impugned Award.

BRIEF FACTS:

3. The Directorate of Health Services, Respondent, under the aegis of the Government of N.C.T. of Delhi, issued a Notice Inviting Tender[ NIT] seeking bids to provide security manpower to be deployed across various dispensaries operated by the Respondent in Delhi.

4. M/s Gorkha Security Services, [Petitioner] is a partnership firm engaged in the business of providing security and manpower services. The Petitioner participated in the said bidding process and stood successful, pursuant to which vide a Letter of Award dated 21.12.2010, [Agreement], the contract for providing Sweeper-cum-Chokidar, [SCC], was awarded to the Petitioner for an initial period of two years from 01.01.2011 to 31.12.2012. The said period was extended from time to time till 31.03.2015.

5. The terms and conditions of the Agreement were the same as provided for in the NIT. The Petitioner, as per a pre-requisite compliance to the Agreement, deposited an amount of Rs. 27,11,000/- as security in the form of FDR in favour of the Respondent.

6. The Petitioner raised monthly bills in terms of the Agreement for the services provided at various dispensaries of the Respondent, against which the Respondent failed to release payments for five out of the eight districts in which the said services were provided.

7. The Respondent failed to pay the Petitioner the enhanced contractual rates, which were in line with prevailing minimum wages, before November 2014, which is stated to be against the terms and conditions of the NIT. The relevant terms state that if the minimum wages are revised by the Government of N.C.T. of Delhi or the Government of India, the incremental wages will be provided to the service providers. The Respondent only paid the incremental wages from November 2014 onwards.

8. In light of this non-payment of enhanced minimum wages, the Petitioner was forced to raise monthly bills at unrevised value to the Respondent, while paying the deployed SCCs the prevailing enhanced minimum wages and statutory contribution from its pocket.

9. Aggrieved by the non-payment of various monthly bills and enhanced minimum wages, various representations were made by the Petitioner to the Respondent, but no heed was paid and no representation was addressed.

10. The Petitioner, thereafter, served legal notices dated 18.03.2015 and 14.04.2015 demanding the due payment against bills raised and the payment as per the enhanced minimum wages, but the payments were still not paid. Consequently, vide letter dated 26.03.2015, the Petitioner expressed its intention to withdraw the services of SCC from all the dispensaries due to non-payment of the dues.

11. Aggrieved by the same, vide letter dated 22.07.2015, the Petitioner invoked Clause 50 of the terms and conditions of the NIT, which contained the „Arbitration Clause'; however, no Arbitrator was appointed.

12. Ther