The main legal point established in the judgment is that time can be considered at large if parties depart from the contractual mechanism for extension of time, leading to the invalidation of liquidated damages and the need to rework interest rates and amounts awarded on certain claims.

JUDGMENT :

(Prayer in O.P.NO.1068 OF 2018: Original Petition is filed under Section 34 of the Arbitration and Conciliation Act, 1996 to set aside the portions of the Award dated 20.08.2018 passed by the Arbitral Tribunal to an extent, as aggrieved by the Petitioner herein.

O.P.NO.108 OF 2019: Original Petition is filed under Section 34 of the Arbitration and Conciliation Act, 1996 to set aside the Award dated 20.08.2018 passed by the Arbitrator, in so far as claims 1, 2, 3 and 6 are concerned.)

1. This dispute relates to a contract for the construction of the metro station at the Chennai Airport. Pursuant to bids submitted by contractors in this regard, M/s. URC Construction Private Limited (the Contractor) was selected as the successful bidder by Letter of Intent dated 11.05.2012 (the LoI), which was followed by the Letter of Acceptance dated 21.05.2012 (LoA). Thereafter, an Agreement dated 06.06.2012 (the Agreement) was executed between the Airport Authority of India(AAI) and the Contractor. Apart from the above, the tender documents, including the General Conditions of Contract(GCC), constituted the contract documents and are collectively referred to as the Contract. The work was to be executed within 14 months reckoned from the 10th day after the date of the LoI, i.e. on or before 20.07.2013, and the contract value was a sum of about Rs.48.71 crores. However, the work was delayed due to multiple factors during execution and about 20 provisional extensions of time were granted by the AAI. The first and last provisional extensions were granted by letters dated 04.07.2013(Ex.C-14) and 30.09.2015(Ex.C-42) from the AAI to the Contractor and work was completed within the last extended period, which was up to 31.10.2015. Subsequently, the Contractor submitted a final extension of time(EOT) application on 29.12.2015 and the AAI made a determination that out of the total extended period of 852 days, the Contractor is responsible for the delay of 501 days. On that basis, liquidated damages of Rs.1,21,28,760/- was imposed on the Contractor and a dispute ensued with regard to attribution of responsibility for delay and the consequences thereof and such dispute was referred to arbitration. The Contractor was the claimant in the Arbitration Proceeding and made seven claims before the Arbitral Tribunal. The said claims included a claim that extension of time should be granted without levy of liquidated damages and, consequently, for release of the sum of Rs.1,21,28,760/- towards wrongful levy of liquidated damages(Claim 1); a claim of Rs.81,91,014/- towards interest/costs incurred on account of the wrongful levy of liquidated damages and on account of bank guarantee extension and commission charges(Claim 2); a claim of Rs.2,63,96,124/- towards compensation for escalation of cost of material and labour during the extended period(Claim 3); a claim of Rs.1,90,00,150/- towards compensation for additional escalation(Claim 4); a claim of Rs.7,42,42,269.50 towards prolongation costs (Claim 5); interest at 18% per annum (Claim 6); and a claim for costs of litigation (Claim 7). By Award dated 20.08.2018 (the Award), the Arbitral Tribunal awarded a sum of Rs.2,04,73,520/- to the Contractor with pendente lite interest at 6% per annum and post-Award interest at 8% per annum. In specific, a sum of Rs.1,21,28,760/- was awarded towards refund of liquidated damages, a sum of Rs.23,00,000/- towards compensation for withholding amounts towards liquidated damages and milestone charges and a net sum of Rs.60,44,760/- towards escalation in cost of materials and labour. The additional escalation claim and the prolongation claims were rejected in entirety. The Contractor challenged the Award by filing O.P.No.1068 of 2018 in respect of the rejection of its claims, whereas AAI filed O.P.No.108 of 2019 in respect of claims 1,2,3 and 6 that were allowed by the Arbitral Tribunal.

2. I heard the learned counsel for the AAI, Mr. V.Lokesh Kumar, and the learned counsel fo