The court clarified that awards in international commercial arbitration can only be challenged on public policy grounds and not for patent illegality, emphasizing the need for adherence to contractual terms.

ORDER :

SENTHILKUMAR RAMAMOORTHY, J.

1. The petitioner was a partner of a joint venture between M/s.Puncak Niaga Holdings Berhad (PNHB), Lanco Infratech Limited (Lanco) and the petitioner (the JV). The JV was formed under a Joint Venture Agreement dated 28.01.2002(the JV Agreement). The JV Agreement was for purposes of bidding for and executing work for the Chennai Metropolitan Water Supply & Sewerage Board (the CMWSSB) in relation to the Chennai Water Supply Augmentation Project-I. After the execution of the JV Agreement, the parties modified the status of the petitioner under the JV Agreement by entering into an agreement titled Key Terms to the Supplementary Joint Venture Agreement(Key Terms Agreement). By virtue of the Key Terms Agreement, Package 8 under the work awarded to the JV was sub- contracted to the petitioner. Disputes arose between the parties in relation to the sub-contract and these disputes were referred for arbitration.

2. The petitioner was the claimant before the Arbitral Tribunal. By the claim statement, the petitioner raised 34 claims for an aggregate sum of Rs.8,44,26,981/-. The respondent filed a statement of defence along with five counter claims for an aggregate sum of Rs.13,61,61,931/-. On 07.03.2017, the Arbitral Tribunal framed seven issues, which are set out at internal pages 8 and 9 of the arbitral award dated 13.11.2019 (the Award). By the Award, the Arbitral Tribunal allowed four claims and interest thereon: a sum of Rs.36,43,463/- towards payment of final bill; a sum of Rs.11,41,703/- towards the balance refundable as security deposit, after giving credit to the amount of Rs.50,00,000/- deposited earlier; a sum of Rs.21,870/- towards expenses for services; a sum of Rs.2,44,750/- towards expenses for making holes in the pipes; and interest on the above claims at 18% per annum from the date of Award till the date of payment. All the counter claims were rejected. Out of the 30 rejected claims, the petitioner did not assail the Award with regard to two claims. The Award is assailed in respect of about 28 claims.

3. Oral arguments on behalf of the petitioner were advanced by Mr.Anirudh Krishnan, learned counsel, and on behalf of the respondent by Mr.Harishankar Mani, learned counsel.

4. Mr.Anirudh Krishnan submitted that the arbitral proceedings qualify as an international commercial arbitration as per the Arbitration and Conciliation Act,1996(the Arbitration Act). Therefore, he submitted that the Award is being assailed as being violative of public policy. According to learned counsel, an award in an international commercial arbitration may be assailed on the same grounds as a domestic award except to the extent that the ground of patent illegality is unavailable. In support of this proposition, he relied upon the judgment of the Hon'ble Supreme Court in Vijay Karia and Others v. Prysmian Cavie Sistemi SRL and others (Vijay Karia), 2020 SCC OnLine SC 177. He also relied upon paragraph 27 of the judgment in Associate Builders v. Delhi Development Authority (Associate Builders) (2015) 3 SCC 49 ) to contend that an award in an international commercial arbitration may be interfered with if a binding precedent is disregarded and on paragraph 7 of the judgment in Hindustan Petroleum Corporation Ltd. v. Banu Constructions and another (2021) SCC Online Mad 724 for the proposition that reasons for conclusions are vital in an arbitral award and that such award may be interfered with in the absence thereof.

5. According to learned counsel, the Key Terms Agreement incorporated the terms of the agreement between the JV and CMWSSB except with regard to payment and payment terms. In order to substantiate this submission, he referred to Clause 19. By drawing reference to the Award, at internal pages 18 to 22 thereof, he pointed out that the Arbitral Tribunal summarized the delay events and set out discussions and conclusions at internal pages 26 and 27 of the Award in relation to such delay events. As regards delay