An arbitral award must stay within the bounds of the arbitration agreement; claims exceeding this scope can be annulled, underscoring limited judicial interference in arbitration matters.

JUDGMENT :

RAJNESH OSWAL, J.

1. This application under section 34 of the Arbitration and Conciliation Act, 1996 (for short ‘the Act’) has been preferred by the applicants for setting aside the award dated 25.03.2017, which includes the Majority Award issued by the Arbitrators, namely, Mr. Y.P. Singh and Mr. Sheikh Abdul Salam, as well as the Minority Award issued by Arbitrator, namely, Mr. Ali Mohd. Magray.

Facts:

2. Brief facts necessary for the disposal of the present application are that a contract for construction of the Tunnel RD 640-M to 3060-M of Sumbal Power Link Channel USHP Kangan was initially awarded to M/S National Projects Construction Corporation Ltd. (NPCC) for an estimated cost of Rs. 3.70 crores but the NPCC could execute the work only to the extent of Rs. 120 lacs (approx.) as such, the balance work was allotted to the respondent (hereinafter to be referred as ‘the claimant’) in the year 1988 on the rates as well as the terms and conditions as indicated in the agreement dated 04.06.1988, for an amount of Rs. 421.00 lacs. The period of completion of work was 30 months i.e. w.e.f. 01.06.1988 (date of start of work) to 31.12.1990 (date of completion of work), but the said work was actually completed on 30.04.2002. The completion certificate was issued on 14.09.2002.

3. This is an admitted case of both the parties that there were disturbed conditions in the Valley, as a result of which, the work could not be executed within time and numerous extensions were granted to the claimant. It needs to be noted that both the applicants as well as the claimant have levelled allegations against each other for non-completion of work within the stipulated time. After the completion of work, the claimant raised the issue with the applicants in respect of losses suffered by the claimant on account of delay in completion of the project. The claimant as such, lodged as many as 12 claims for an amount of Rs. 9.54 crores with the applicants, but the applicants rejected all the claims of the claimant. The claimant opted for arbitration and, as such, the matter was referred to the Arbitral Tribunal.

4. The claimant submitted 12 claims in total before the Arbitral Tribunal claiming Rs. 9,54,47,132.15/- along with interest at the rate of 24% per annum, whereas the applicants besides objecting the claims of the claimant, lodged counter-claim of Rs. 7,04,76,800/-. The claimant filed the rejoinder to the reply as well as the counter-claim filed by the applicants and denied the counter-claims of the applicants. On the basis of the claims as well as counter-claims submitted by the parties, the Arbitral Tribunal framed as many as 15 issues for its determination, the same are extracted as under:

(i) Whether the Claimants are entitled to compensation to the tune of Rs. 19,24,479.00 and Rs. 17,64,150.00 for suspension of work for different spells, between October, 1989 to December, 1990. If so how?

(ii) Whether the claimants are entitled to bonus for the reasons and on the ground mentioned under Claim 2 of the Statement of Claims, to the tune of Rs. 1,32,15,759.00. If so, how?

(iii) Whether the Claimants are entitled to the compensation on account of non-availability of electric power at site and/ or erratic supply of electric power and/or low voltage to the tune of various amounts claimed under Claim No. 3 in the Statement of Claim. If so, how?

(iv) Whet