JUDGMENT :

(Prayer: Civil Miscellaneous Appeal filed under Section 37(1)(c) of Arbitration and Conciliation Act, 1996 to set aside the order dated 03.06.2019 passed by Court of District Judge at Karaikal in O.P.No.1 of 2014 partially confirming the Award dated 05.05.2014 of the sole Arbitrator.)

1. This appeal has been filed under section 37 of the Arbitration and Conciliation Act, challenging the order dated 03.06.2019 passed by the learned District Judge, Karaikal under section 34 of the Arbitration and Conciliation Act in A.O.P.No.1 of 2014 allowing the application filed by the Appellant in part by modifying the Arbitral Award both in favour of the Appellant as well as the respondent under the Arbitral award dated 05.05.2014.

2. The respondent was a successful bidder in a tender floated by the Appellant for the construction of 34 bunk houses at the Appellant’s rig site. The Appellant executed a letter of award (LOA) dated 23.07.2009 in favour of the respondent awarding the tender to the respondent and thereafter, purchase order dated 24.09.2009 was also issued in favour of the respondent. Under the letter of award dated 23.07.2009, there is a condition which stipulates that 34 bunk houses will have to be constructed by the respondent and delivered to the Appellant within 120 days from the date of the said letter of award. The Appellant levied liquidated damages of Rs.10,22,631/- upon the respondent as according to the Appellant, the respondent delivered the bunk houses after a delay of 414 days from 23.07.2009 being the date of the letter of award.

3. However, it is the case of the respondent that the delay at various stages was only due to the Appellant as the approval of drawings and inspections by the Appellant was done belatedly.

4. There arose disputes between the parties and hence, the respondent initiated arbitration before the Arbitral Tribunal as according to them, the Appellant has illegally deducted a sum of Rs.10,22,631.17/- from the total value of the purchase order and paid only Rs.1,95,18,677/- and without any justification also invoked the Performance Bank Guarantee submitted by them to the Appellant to the tune of Rs.15,40,600/-. The respondent has also claimed compensation for the losses suffered by them which includes the supplies/fund blockage loss, stock circulation loss, man power and workspace loss. According to the respondent, as per the contract, 34 bunk houses will have to be constructed and delivered by them to the Appellant only from the date of approval of drawings by the Appellant. According to the respondent, since the drawings were approved by the Appellant only on 13.11.2009, delivery of 34 bunk houses by the respondent to the Appellant is well within the period of 120 days.

5. Before the Arbitral Tribunal, the respondent has made 20 claims against the Appellant.

6. The Appellant has disputed the claims made by the respondent before the Arbitral Tribunal by filing a reply statement. It is their contention that as per the letter of award dated 23.07.2009, the respondent ought to have delivered 34 bunk houses within a period of 120 days from 23.07.2009 i.e., the date of letter of award and since the same was not delivered on time, they are entitled for counter claim against the respondent. The Appellant has made a counter claim towards cost of four bunk houses which were damaged and unusable, expenses incurred towards damage of other bunk houses and interest at 18% per annum and also for cost aggregating to a sum of Rs.47,75,483.27/-. According to the Appellant, time is the essence of the contract and therefore, they are entitled for the losses mentioned in the counter claim.

7. The Arbitral Tribunal passed an Arbitral Award dated 05.05.2014 in favour of the respondent in respect of certain claims against the Appellant by holding that the period of 120 days for delivery of 34 bunk houses specified