The appeal was allowed, reinstating the arbitrator's award which concluded that the termination of the contract was illegal due to failure in fulfilling mutual obligations concerning site availability.

JUDGMENT :

1. This is an appeal by the claimant/contractor filed under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act, 1996') against the order dated 18.11.2024 passed by the learned Single Judge, setting aside the award dated 06.04.2022 passed by the learned Sole Arbitrator in an application under Section 34 (2) of the Act, 1996.

2. For the sake of convenience, the parties are referred to as per their status before the learned Sole Arbitrator, i.e., the appellant herein as the claimant and the first respondent herein as the respondent. For better appreciation, it would be necessary to note certain relevant and undisputed facts of the case.

3. The first respondent herein invited bids for “Supplying, Laying, nd Jointing, Testing and Commencing of 2 Row of 2000 mm Notional Diameter Mild Steel Spirally Welded Pipes from Chembarambakkam Water Treatment Plant upto Poonamallee Bye Pass Road Junction near Saveetha Dental College via Poonamallee Bye Pass Road”. In response to the same, the claimant participated in the bidding process and emerged as the successful bidder. Accordingly, the work order dated 30.11.2012 was issued to the claimant for a total value of Rs.39,67,95,746/-. The total contract period was agreed to be 18 months from the start date. Accordingly, an agreement was entered into on 18.01.2013, and in terms of the same, the Letter of Acceptance, Notice to Proceed, Contact Data, General and Special Conditions of Contract, Drawings and Bill of Quantities etc., would form part of the agreement. Accordingly, the site was handed over on 21.03.2013 and in terms of the same, the work is expected to be completed within 18 months i.e., by 20.09.2014. Though the site was shown to have been handed over on 21.03.2013, admittedly the entire site was not handed over till the date of termination of contract. However, the said work could not be completed within the time, resulting in the claimant making a request for extension of time on seven occasions, and the same was also granted by the respondent till 30.04.2017. However, the further extension sought by the claimant was not acceeded to by the respondent.

4. Before commencement of work, the claimant submitted a Performance Bank Guarantee for a sum of Rs.79,36,000/- valid till 31.01.2015, and during the course of execution, the validity of the said Bank Guarantee was extended from time to time till 31.07.2019. During the course of execution of the work, the claimant had submitted Running Account Bills, Seven in number, and out of the same, six of them were processed and payments were made to the claimant after effecting necessary deductions towards retention money etc., While so, considering the inordinate delay in execution of the work and complaining about non-availability of work front for execution of the work and handing over of the work site in piece-meal, the claimant made a request for foreclosure of the work by addressing a letter dated 19.12.2017 and to release the claimant, while stating that the reasons for non-completion of the work are beyond the control of the Board as well as the contractor, and requested for payment of the dues. However, the said request was not acceded to by the respondent and consistently required the claimant to execute the work to the extent, the site was made available. However, the claimant, expressed its inability to execute the balance work, in the light of the abnormal delay. At this juncture, the claimant sought for referring the matter for adj