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2019 Supreme(Mad) 1104
IN THE HIGH COURT OF JUDICATURE AT MADRAS
N. SATHISH KUMAR, J.
The Government of Tamilnadu, Rep. by its Secretary, Public Works Department, Chennai & Others – Petitioners
Versus
M/s. GMP International GMBH of Hardenberg Strassee 4-5, Rep.by its Authorised Singatory Col. C. Jaisankar (Retd.) – Respondent
O.P. No. 74 of 2019
Decided On : 28-06-2019
For the Petitioner: Sricharan Rangarajan, Addl.Govt.Pleader (CS).
For the Respondent:T. Gowthaman, Advocate.
The main legal point established in the judgment is that the power of the court to set aside an arbitral award is limited and can only be exercised in specific circumstances as outlined in the Act.
Headnote:
Arbitration and Conciliation Act - Architectural Consultancy - Section 34
Fact of the Case:
The petitioner filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996 challenging the award passed by the sole arbitrator in favor of the claimant. The claimant, an internationally acclaimed company specialized in Architectural Consultancy, was appointed as a consultant for the construction of the New Complex for the Tamil Nadu legislative Assembly. Disputes arose regarding the payment dues of the claimant, leading to the arbitration proceedings.
Finding of the Court:
The court analyzed the evidence and found that the claimant was entitled to a sum of Rs. 23,49,21,943, along with interest. The court also addressed the limitation aspect and the claim for the extended period of development, ultimately dismissing the petition and upholding the award.
Issues: The main issues included the entitlement of the claimant to the claims made, the impact of a pending inquiry on the arbitration proceedings, the entitlement to interest and costs, and other reliefs.
Ratio Decidendi: The court emphasized that the power to set aside an arbitral award would be exercised only in specific cases, such as when the award is contrary to the fundamental policy of Indian law, interest of India, justice, or morality, or if it is patently illegal. The court also highlighted that the arbitrator's decision is generally considered binding between the parties, and the court shall not ordinarily substitute its interpretation for that of the arbitrator.
Final Decision: The court dismissed the petition, upholding the arbitral award and emphasizing that the award could not be interfered with under Section 34 of the Arbitration and Conciliation Act, 1996.
(Prayer: Petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 to set aside the impugned Award dated 28.02.2018 passed by the Sole Arbitrator in Arbitration No.1 of 2015.)
1. This Original Petition is filed under Section 34 of the Arbitration and Conciliation Act, 1996 challenging the Award passed by the sole Arbitrator in favour of the claimant.
2. The case of the claimant is that the claimant’s company is an internationally acclaimed company specialized in Architectural Consultancy practice. The First Respondent floated a tender for appointment of a consultant for the construction of the New Complex for the Tamil Nadu legislative Assembly at Omandurar Government Estate. The claimant declared as the successful bidder and was appointed as the consultant for providing Architectural consultancy services. For the purpose of executing the responsibilities, the claimant entered into a sub-consultancy agreement with M/s.Archivista Engineering Project Private Limited Company. The claimant has executed his work effectively and submitted his invoice dated 28.04.2011 to the third respondent. After the General elections in 2011 the second respondent took a policy decision to convert the newly constructed secretariat complex into Multi Speciality Hospital and a Medical College. Claimant made a consolidated claim of Rs.48,28,57,947/- as on 13.11.2013, and also filed the O.P.No.388 of 2014.
3. The respondents have denied all the allegations and it is the contention of the respondents that the subject matter is sub-judiced before the Commission of Inquiry and only after receipt of the said report, payment dues of claimant can be ascertained. That apart, the eligible claim worked out by the respondent to the claimant is only to the tune of Rs.10,31,15,407/-.
4. Based on the respective pleadings, the Arbitral Tribunal framed the following issues:
1. Whether the claimant is entitled to any of the claims made in its Claim Statement?
2. Whether the pendency of an enquiry by the Commission of Enquiry which is in existence is having any bearing on this Arbitral Proceedings?
3. Whether the claimant is entitled to any interest on the claim and if so, what is the rate of interest?
4. Whether the Claimant/Respondent is entitled to any cost and if so, what is the cost?
5. To what such other reliefs the claimant is entitled?
5. After analyzing the entire evidence and facts the Tribunal has found that the Respondent/claimant is entitled to a sum of Rs.23,49,21,943/-. That apart interest at 12% on the above said sum from 14.01.2012, the date of termination till the date of filing claim statement and interest at 10% from the date of filing the claim statement till the date of Award. Though the petitioner is challenging the Award on various grounds only on two grounds the State has opposed the Award.
6. The Learned Additional Government Pleader (CS) Mr. Sricharan Rangarajan appearing for the Petitioner/State mainly focused his argument that the claim is barred by limitation. The Learned Additional Government Pleader mainly contended that though the plea of limitation has not been raised in arbitral proceedings, it is his contention that the cause of action arose from the date of final bill then the claim ought to have been prepared within three years. In this case admittedly, the cause of action arose three years much prior to the date of reference. Therefore, the claim is barred by limitation. The another contention of the learned Additional Government Pleader is that as far as the claim for the extended period there is no evidence available on record to award the damages towards the claim on extended period of development. Hence it is his contention that the Award of the Arbitrator in that aspect has to be set aside. In support of his contention he relied upon the following judgments:
1. Major (Retd) Inder Singh Rekhi vs. Delhi Development Authority [(1988) 2 SCC 338]
2. Panchu Gopal Bose vs. Board of Trustee for Port of Calcutta [(199
