2023 Supreme(Mad) 461

IN THE HIGH COURT OF JUDICATURE AT MADRAS
T. RAJA, D. BHARATHA CHAKRAVARTHY, JJ.
M/s. Transtonnelstroy – Afcons (JV) & Ors. - Appellants
Versus
M/s. Chennai Metro Rail Ltd. & Ors. - Respondents
O.S.A.(CAD) Nos.147 of 2021, 85 and 79 of 2022 and 148 of 2021 and C.M.P. Nos.21000, 21003, 21008 and 21010 of 2021
Decided On : 01-02-2023

The Arbitral Tribunal erred in calling for additional materials being the data entered into by the parties during the execution of the contract and the relevant software, from the claimant, well after reserving orders and thereafter technically analysing the same on its own and consequently awarding the claim, is bad in law on the ground that the respondent was otherwise unable to present their case.

Headnote:

The Court held that the Arbitral Tribunal erred in calling for additional materials being the data entered into by the parties during the execution of the contract and the relevant software, from the claimant, well after reserving orders and thereafter technically analysing the same on its own and consequently awarding the claim, is bad in law on the ground that the respondent was otherwise unable to present their case. The Court further held that the observations / directions of the learned Single Judge in paragraph No.22 of the impugned judgment, enabling the parties to raise the issue once again before the Tribunals in pending Arbitrations, is unsustainable.

Fact of the Case:

Chennai Metro Rail Limited (CMRL) is a company incorporated under the Companies Act, 2013 for the purpose of creating, designing, establishing, maintaining, and running metro rail in and around the city of Chennai. CMRL issued notice inviting tenders on 21.04.2010 for the works of design and construction of five underground stations and associated tunnel works between Washermanpet to May Day Park (5.6 kms, four stations) and Chennai Central to Egmore (1.7 kms, two stations) where Chennai Central is the common station in both the routes. This tender is termed as 'UAA-01' package of the Chennai Metro Rail Project under Phase - I. TTA-JV emerged as the successful bidder for a total project consideration of Rs.1566,81,00,000/- (Rupees One Thousand Five Hundred and Sixty Six Crores and Eighty One Lakh only). The contract is a Design-Build Lumpsum Turnkey, governed by F.I.D.I.C (Federation Internationale Des Ingenieurs - Conseils) Part - 1 of 1995 Edition, the General Conditions of Contract (GCC) modified via Conditions of Particular Application (CPA), the Employer's Requirements on design, construction, Interface Management, etc., Outline Design Specifications including Tender Documents, etc. CMRL issued another notice inviting tenders on 21.04.2010 for the works of design and construction of four underground stations between Shenoy Nagar (SSN) and Thirumangalam Ramp (2TI) and Associated Tunnels in Corridor 2. This tender is termed as 'UAA-05' package of the Chennai Metro Rail Project under Phase – I. TTA-JV emerged as the successful bidder for a total project consideration of Rs.1030,99,50,000/- (Rupees One Thousand Thirty Crores Ninety Nine Lakhs and Fifty Thousand only). The contract is a Design-Build Lumpsum Turnkey, governed by F.I.D.I.C (Federation Internationale Des Ingenieurs - Conseils) Part - 1 of 1995 Edition, the General Conditions of Contract (GCC) modified via Conditions of Particular Application (CPA), the Employer's Requirements on design, construction, Interface Management, etc., Outline Design Specifications including Tender Documents, etc.

Finding of the Court:

The Court found that the Arbitral Tribunal erred in calling for additional materials being the data entered into by the parties during the execution of the contract and the relevant software, from the claimant, well after reserving orders and thereafter technically analysing the same on its own and consequently awarding the claim, is bad in law on the ground that the respondent was otherwise unable to present their case. The Court further held that the observations / directions of the learned Single Judge in paragraph No.22 of the impugned judgment, enabling the parties to raise the issue once again before the Tribunals in pending Arbitrations, is unsustainable.

Issues: Whether the course adopted by the Arbitral Tribunal, in calling for additional materials being the data entered into by the parties during the execution of the contract and the relevant software, from the claimant, well after reserving orders and thereafter technically analysing the same on its own and consequently awarding the claim, is bad in law on the ground that the respondent was otherwise unable to present their case?

Ratio Decidendi: The Court held that the Arbitral Tribunal erred in calling for additional materials being the data entered into by the parties during the execution of the contract and the relevant software, from the claimant, well after reserving orders and thereafter technically analysing the same on its own and consequently awarding the claim, is bad in law on the ground that the respondent was otherwise unable to present their case. The Court further held that the observations / directions of the learned Single Judge in paragraph No.22 of the impugned judgment, enabling the parties to raise the issue once again before the Tribunals in pending Arbitrations, is unsustainable.

Final Decision: The Court held that the Arbitral Tribunal erred in calling for additional materials being the data entered into by the parties during the execution of the contract and the relevant software, from the claimant, well after reserving orders and thereafter technically analysing the same on its own and consequently awarding the claim, is bad in law on the ground that the respondent was otherwise unable to present their case. The Court further held that the observations / directions of the learned Single Judge in paragraph No.22 of the impugned judgment, enabling the parties to raise the issue once again before the Tribunals in pending Arbitrations, is unsustainable.