JUDGMENT :

(Prayer: Petition filed under Section 34 of the Arbitration and Conciliation Act, 1996, to set aside the impugned Award dated 21.05.2014 made in the Arbitration of the disputes arising out of the Agreement No.CS/1/CE of 1994 dated 09.02.1994 and the Rider Agreement No.CS/Rider-1/CE of 2000 dated 05.07.2000 passed by the Arbitrator and pass a fresh Award allowing all the claims of the Petitioner.)

1. Aggrieved over the Award passed by the sole Arbitrator, the present Petition has been filed challenging the Award.

1.a. Parties are arrayed as per their own rankings before the Arbitral Tribunal.

2. Brief fact leading to file this Original Petition is as follows:

2.a. The Claimants were awarded contract by the Respondents for manufacture and supply of 5 lakhs BG PSC track sleepers at a contract value of Rs.18.395 Crores governed by IRS conditions of contract and by an Agreement dated 09.02.1994. Thereafter, the Railway Board vide its letter dated 28.03.1995 has refixed the quantum of the inputs of raw materials used in the manufacture of PSC Sleepers as follows:-

Cement

HTS Wire

Existing/Present

60 Kg Per Sleeper

9.7. Kg. Per Sleeper

Revised Quantity

55 Kg Per Sleeper

9 Kg. Per Sleeper

2.b. The Petitioner has supplied the entire track sleepers before July 1997. During the currency of contract the Railways introduced revised norms, the level of inputs for manufacture were reduced and new norms for price variation linked to whole sale price index and Consumer Price Index were introduced. Though the Claimant addressed a letter indicating that revised norms cannot be effected from 28.3.1995 and the bill for the period prior to 01.12.1996 should be paid as per the terms of the original contract and not in accordance with the revised norms, the Respondent proceeded to enforce the revised norms as per its letter dated 13/17.12.1997, with effect from 28.03.1995. Thereafter, by subsequent negotiations, resulted in, implementing new norms and Rider Agreement came to be executed between the parties and it is agreed to implement new norms for the purpose of payment of escalation with effect from 01.10.1996 over and above the updated rate of a PSC Sleeper as on 30.09.1996.

2.c. As the dispute arose between the parties, the matter has been referred to sole Arbitrator in the earlier occasion. The learned Arbitrator in earlier occasion observed that the only dispute was as to whether or not adhoc price variation amounts already paid for respective periods based on updated price of 30.09.1996, is deductible or not from the price variation amount newly calculated as per Rider Agreement from 01.10.1996. The Award passed by the Sole Arbitrator was challenged before this Court by both sides in O.P.No.14 of 2005 and O.P.No.525 of 2005. This Court by order dated 13.8.2008 set aside the Award passed by the earlier Arbitrator on the ground that the Learned Arbitrator has not interpreted the terms of the Rider Agreement and he has gone beyond the agreement. Accordingly, as both side submitted a new Arbitrator may be appointed by the Railway Administration, the Award has been set aside and the Respondent was directed to appoint an Arbitrator to consider the dispute between the parties and pass an Award as expeditiously.

2.d. Pursuant to the above orders the present Arbitrator was appointed by the Railway Administration, who has passed the impugned Award. Before the Learned Arbitral Tribunal almost similar claims were made except claiming payment for escalation bills amounting to Rs.5,00,93,061. Following is the claim:

Claim No.1-A : a direction to the Respondent Department to make payment of the Escalation Bills amounting to about Rs.5,00,93,061/- to the Claimant as per the Rider Agreement No.CS/Rider-1/CE of 2000 dated 5.7.000 in Agreement No.CS/1/CE/1994 dated 9.2.1994, strictly as per the Railway Board’s clarification in its Letter No.92/TK-II/22/II/4 [GGKN] dated 27.08.2002 and also its subsequent proceedings.

3. It is the case of the Respondent that in pursuan