IMPORTANT POINT
An arbitral award cannot be sustained if it is based on assumptions without concrete evidence, particularly in claims for damages or losses, as established under the Arbitration and Conciliation Act, 1996.

JUDGMENT :

R.SUBRAMANIAN, J.

Prayer: Original Side Appeal filed under Clause 15 of the Letter Patent r/w. Order 36 Rule 1 of O.S.Rules and Section 37 of the Arbitration and Conciliation Act, 1996, against the order dated 20.03.2019 passed in O.P.No.153 of 2019.

This appeal under Section 37 of the Arbitration and Conciliation Act is at the instance of the owner. Challenge is to the order of the learned single Judge made in O.P.No.153 of 2019, dismissing an application under Section 34 seeking to set aside the award that was granted in favour of the respondent herein by the sole Arbitrator.

2. The claim arose in the following backdrop:-

The appellant had floated tenders for erection of a power plant at New Gummidipooondi. The respondent had made its bid to carry out civil works in the said project and the tender was awarded by the appellant on 26.02.2011. The agreement was entered into between the parties on 16.05.2011 and the time for completion of the work was fixed at one year. The total value of the contract was fixed at Rs.20.16 crores. It is not in dispute that the total valuation of the work was reduced to Rs.12.24 crores by the appellant. The work was completed in March, 2013 and there were certain balance works which were done up to September, 2013. After completion of the work, certain disputes arose between the parties and an application under Section 11 of the Arbitration and Conciliation Act was moved by the respondent and a retired Judge of this Court was appointed as the sole Arbitrator.

3.The respondent filed a claim statement raising several claims which can be broadly classified as follows:-

i) Claim No.1 relates to unpaid bills which amounted to Rs.1,43,00,000/-.

ii) Claims No.2 relates to hire charges for the machinery and shuttering materials retained at the site by the respondent for the period from March, 2013 i.e., date of completion of the work till September, 2015. The same was quantified at Rs.4,07,62,096/-.

iii) Claim No.3 relates to price variation for the total work executed including extension, which is quantified to Rs.1,20,64,632/-.

iv) Claim No.4 was for the overhead expenses for the extended period of contract and the same was quantified at Rs.3,02,43,024/-.

v) Claims No.5 was for loss of profit due to reduction in scope of work which was valued at Rs.56,25,000/-.

vi) Claim No.6 was for the cost of plant and machinery and other materials which according to the respondent were left at the site by it and which were not allowed to be taken away even after the completion of the contract. The claim under these head was for Rs.5,74,33,787/-.

4.Claim No.1 which related to the unpaid bills was sought to be supported by providing a statement of claim which is titled as final statement of accounts and the details of the claim were set out therein. The claim under this head included VAT reimbursement, withheld amount of the service tax, work done for non-tendered items and the rent for scaffolding pipes etc.

5. The 2nd claim under the head of hire charges was sought to be supported by contending that the value of the entire contract was fixed at Rs.20.16 crores but, the same was unilaterally reduced by the respondent by nearly 34% to Rs.12.24 crores. Expecting to do a work of the value of Rs.20.16 crores, the respondent / claimant had mobilized machineries and other equipments worth nearly Rs.12,00,00,000/- at the site and because of the reduction of the scope of the work by the appellant, the respondent could not use those machineries and other materials in other contracts resulting in a financial loss in the form of hire charges as it was forced to hire machineries from others for its own work in other contracts.

6.Claim No.6 which related to the value of the plant and machinery was sought to be supported by contending that even after the completion of the work in March, 2013, the appellant did not allow the respondent to remove its material claiming that it had a right to retain the material till the payment due to