The court ruled that waivers in commercial contracts must be respected unless coercion is proven, clarifying that economic pressure does not inherently constitute duress.

JUDGMENT :

(Manoj Kumar Gupta, J.)

1. The instant appeal has been filed under Section 13 of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act , 2015 read with Section 37 of the Arbitration and Conciliation Act, 1996 (for the sake of brevity hereinafter referred to as 'the Act') challenging the order of the Commercial Court, Gautam Budh Nagar dated 23.5.2022 in Arbitration Case No. 13 of 2015, setting aside the Arbitral Award dated 15.12.2014, by the Sole Arbitrator, in a dispute between the parties.

BACKGROUND

2. In the year 2002, the New Okhla Industrial Development Authority (NOIDA), the respondent herein, entered into negotiation with U.P. State Bridge Corporation Limited for construction of two flyovers with clover leaves and allied work at M.P. Road No.3 Express Highway near Amity School and at T-junction near Film City, Gautam Budh Nagar. It submitted a proposal of Rs.106.10 crores for execution of the Project on turnkey basis, including centage charges but which was not accepted.

3. The appellant herein, i.e. Hindustan Steel Works Construction Limited (HSCL), is a Government of India Undertaking, registered under the Companies Act, 1956. It also gave proposal to NOIDA to execute the Project at the same cost of Rs.106.10 crores. The offer of HSCL was accepted by NOIDA and the parties entered into a formal contract-a Memorandum of Understanding (MoU) on 27.03.2003. The work under the contract was to be completed by the HSCL within 27 months from the date of start, which was to be counted from 30 days after the receipt of deposit advance from NOIDA or from the date of possession of land, which ever is earlier. The HSCL was obliged to submit performance security equivalent to 5% of the contract value in shape of bank guarantee. NOIDA was under obligation to pay interest free deposit advance of 15% of project cost secured by the bank guarantee (excluding centage charges) within thirty days from the date of award of work. The advance so paid was to be adjusted in the subsequent demand of funds on the basis of actual work executed by HSCL. The subsequent demand was to be submitted after utilization of 75% of the deposit advance released as above. Under Clause 7, HSCL was entitled to price variation in cost of building material as per NHAI guidelines and formula for computing the same was provided for in the General Conditions of Contract (GCC) executed between the parties in addition to the MoU. Clause 11 stipulated that if the work is temporarily suspended due to any reason which is not attributable to HSCL, suitable extension of time shall be granted by the NOIDA on the request of HSCL. In case the work is delayed due to reasons attributable to HSCL, it was made liable to penalty at the rate of 5% per month of centage charges to NOIDA. The period for which extension would be granted is provided in the GCC. The GCC also provided for compen