IMPORTANT POINT
The court ruled that non-disclosure of material facts in arbitration proceedings constitutes grave misconduct, rendering the arbitral award illegal and overlapping with previous awards.

JUDGMENT :

Pankaj Bhandari, J.

1. Appellant has preferred this appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (for short ‘the Act’) aggrieved by Order dated 17.06.2019 passed by Commercial Court No.3, Jaipur, whereby the objections filed by the appellant under Section 34 of the Act was dismissed and the Award dated 07.09.2014 passed by Arbitral Tribunal was confirmed.

2. It is contended by Mr. Rajesh Maharshi, counsel appearing for the appellant that a Build, Operate and Transfer (BOT) Agreement was entered into between the appellant and the respondent. The total period of the Agreement was 11 years and 8 months, which included the construction period of 18 months. The period for collection of the toll was till 15.05.2008. It is contended that the respondent initially filed a claim which was allowed. In the earlier award, Arbitral Tribunal has extended the concession period till 31.07.2010. It is argued that in the present award, compensation has been given for termination of the concession period on 15.05.2008 and compensation has been awarded for period 15.05.2008 to 30.11.2008 and that the present award is overlapping with the earlier award.

3. It is also contended that the respondent filed a writ petition before the High Court which was dismissed and this fact was not brought to the notice of the arbitrator and it was for the first time, when the appellant was drafting the appeal under Section 37 of the Act, that this came to the notice of the appellant. It is further contended that since the claimant-respondent has concealed a material fact, which tantamounts to grave misconduct on the part of the respondent and, therefore, the award requires to be dismissed on this ground alone.

4. Counsel for the appellant has placed reliance on M/S Unibros Vs. All India Radio 2023 INSC 931; K.V. George Vs. Secretary to Government, Water and Power Department, Trivanandrum and Anr. (1989) 4 SCC 595.

5. Mr. N.K. Mallo, Sr. Adv., counsel for the respondent has opposed the appeal. It is contended that new grounds cannot be taken in appeal under Section 37 of the Act. It is contended that the fact that the writ was dismissed was neither taken before the arbitrator nor before the Commercial Court in application moved under Section 34 of the Act and the appellant cannot now raise a new ground in an application filed under Section 37 of the Act. It is also contended that the writ was dismissed on ground of alternative remedy and only a passing observation was made by the High Court which is not binding on the Arbitral Tribunal as it has no effect and thus the same cannot be termed as falling within the definition of res judicata. Counsel for the respondent has placed before the Court the definition of ‘however’.

6. It is contended that the claim made before the present Arbitral Tribunal was not overlapping with the earlier claim, as in the present claim, amount was claimed under different heads on account of non-collection of toll due to stay by the Court on account of bank guarantee retained by the appellant and in lieu of the amount which was paid to the railways. It is argued that the said amount was not claimed before the first Arbitral Tribunal. It is contended that in the first award, demand for escalation in the project cost was the only issue and there was no other claim, whereas in the second award, the claim were under different heads, which were not earlier claimed by the respondent. It is contended that before the present Arbitral Tribunal, compensation was sought to the tune of Rs.6,11,74,451/- for loss incurred on account of taking over the facility wrongfully and illegally on 15.05.2008 in breach of express extension till 30.11.2008.

7. Counsel for the respondent contends that scope under Section 34 is limited. In this regard, he has placed reliance on Dolphin Drilling Ltd. Vs. Oil and Natural Gas Corporation (2010) 3 SCC 267; Rashida Haroon Kupurade Vs. Divisional Manager, Oriental Insurance Company Ltd. & Ors. (2