The court upheld the arbitral tribunal's authority to decide disputes not found in the Adjudicator's decision, and found no grounds to interfere with the Arbitral Award under Section 34 of the Arbitration Act.

ORDER :

PRAYER : Original Petition filed under Section 34(2) of the Arbitration and Conciliation Act 1996 prayed that the Court may be pleased to set aside the Arbitral Award dated 20/07/2019.

The Chennai Metropolitan Water Supply and Sewerage Board (CMWSSB/the employer) floated a tender in relation to the provision of sewerage facilities to the Thirumazhisai Town Panchayat. M/s.Tecton Engineering and Constructions LLC, the respondent herein/contractor, was the successful bidder. Consequently, an agreement dated 10.02.2010 was executed between the petitioner and the respondent. The contract documents included the agreement, letter of acceptance, conditions of contract, specifications, bill of quantities, drawings, etc. These documents collectively constitute the Contract. The Contract stipulated that work should be completed within a period of 24 months. The execution of work was delayed and work was eventually completed on 15.03.2015.

2. The conditions of contract comprised both General Conditions of Contract (GCC) and Special Conditions of Contract (SCC). The GCC defined the term “Adjudicator” and provided for the appointment of an Adjudicator jointly by the employer and the contractor to resolve disputes in the first instance.

3. Upon disputes arising between the petitioner and the respondent, 8 claims, which were labelled as claims 1, 2, 3(a), 3(b), 4, 5, 6 and 7, were referred to the Adjudicator under letter dated 25.01.2016 of the respondent. The award dated 16.09.2016 was pronounced in respect thereof by the Adjudicator(the Adjudicator’s Award). By the Adjudicator’s Award, an aggregate sum of Rs.2,83,39,260.86 was awarded to the contractor against 4 claims. The other 4 claims were completely rejected. By communication dated 04.10.2016, the petitioner refused to abide by the Adjudicator’s Award. By a subsequent communication dated 08.10.2016, the petitioner informed the respondent that the decision of the Adjudicator would be referred to an arbitrator by the petitioner. In these circumstances, the arbitral tribunal was constituted.

4. Before the arbitral tribunal, the petitioner did not assail the Adjudicator’s decision before the arbitral tribunal. Instead, the respondent herein submitted a statement of claim wherein 19 claims were made by the respondent. The petitioner herein filed a counter statement and refuted these claims. Upon considering the pleadings, the arbitral tribunal framed 8 issues, which are set out at paragraph 8.1 of the arbitral award dated 20.07.2019 (the Arbitral Award). The respondent herein adduced documentary evidence by filing 384 documents, which were exhibited as Exs.C1 to C384. The petitioner herein also adduced documentary evidence by filing 7 documents, which were exhibited as Exs.R1 to R7.

5. An Advocate Commissioner was appointed for the limited purpose of verifying the documents produced before the arbitral tribunal by learned counsel for the claimant, and he filed a report dated 17.02.2019. The petitioner herein cross-examined the Commissioner with regard to the report. Eventually, by the Arbitral Award, the arbitral tribunal awarded a sum of Rs.4,19,19,719/- towards claim Nos. 1 to 4, 6 to 10 and 14 (part) with interest thereon at 12% p.a. from the date of award until the date of payment. In addition, the petitioner herein was directed to refund the remainder of the retention amount of Rs.38,90,560/- upon completion of the defect liability period of 2 years from 21.05.2018. The petitioner herein was further directed to pay pendente lite interest on Rs.2,98,49,986/- at 9% p.a. from 13.10.2016 till the date of award. The petitioner was also directed to discharge and return the performance security deposit of Rs.38,48,700/- and the original performance guarantee and bank guarantee within one month from the date of award and, in case of default, the respondent herein is entitled to 12% p.a. as interest on the bank guarantee and the security deposit of Rs.38,48,700/-. A sum of Rs.44,300/- and a s