The scope of judicial interference under the Arbitration and Conciliation Act is limited; courts cannot review merits unless there is a clear violation of public policy or jurisdiction.

JUDGMENT :

Moushumi Bhattacharya, J.

1. The Civil Miscellaneous Appeal arises out of an order dated 19.11.2012 passed by the Learned IX Additional Chief Judge (F.T.C),City Civil Court at Hyderabad (‘Trial Court’) dismissing the Arb.O.P.No.1559 of 2009 filed by the appellant/petitioner under section 34 (2) (iii) and (iv) of The Arbitration and Conciliation Act, 1996 (‘the 1996 Act’) for setting aside an Award dated 31.03.2009 to the extent of Claim Nos.4 and 16 under Dispute No.2 passed by the Arbitral Tribunal.

2. The appellant/Engineer-in-Chief (Roads & Buildings), Government of Andhra Pradesh was the claimant in Dispute No.1 in the arbitration proceedings. The respondent No.1/Contractor was the claimant in Dispute No.2. The claims arose out of an Agreement No.E-in-C (R&B) Administrative and EAPs/113/99 dated 01.03.2000 which was executed by the parties for widening and strengthening of Thokapally – Nandyal Road for a sum of Rs.109,87,51,789/- (‘Works’). The Agreement stipulated that the work was to be completed within 44 months.

3. By the impugned order, the Trial Court upheld the Award dated 31.03.2009 passed by the Arbitral Tribunal and dismissed the O.P. filed by the appellant while directing the appellant to pay Rs.33,000/-towards costs to the respondent No.1.

4. The appellant has challenged the impugned order on the ground that the Trial Court failed to appreciate that the Arbitral Tribunal decided on issues which were beyond the scope of submission of the parties. The appellant contends that the Arbitral Tribunal gave a decision contrary to the terms of the Agreement dated 01.03.2000.

5. The events which are relevant to the present dispute are stated below:

(i) The appellant and the respondent No.1 executed an Agreement on 01.03.2000 for a contract price of Rs.109,87,51,789/- pursuant to the respondent being declared as the lowest bidder in a bid floated by the appellant for the execution of Road Works.

(ii) The scheduled date for completion of the Works was 31.08.2002. The respondent No.1 completed the Works within the extended period granted by the appellant i.e., on 03.11.2003.

(iii) The respondent No.1 submitted a Statement at Completion on 28.02.2004 to the Engineer appointed by the appellant viz. M/s. Louis Berger International (LBI) (‘First Engineer’) whereby additional claims amounting to Rs.30,54,97,630/- were made by the respondent No.1.

(iv) On 16.06.2004, the First Engineer was replaced by another Engineer i.e., Executive Engineer (R&B) (‘Second Engineer’).

(v) The Claims Specialist appointed by the appellant submitted a Report i.e., Interim Payment Certificate No.42 on 10.09.2004 recommending the payment of Rs.12,48,31,909.34 ps. to the respondent No.1 in consultation with the appellant and the respondent No.1 as per Clause 53.5 of the Agreement. The appellant rejected the determination of this amount.

(vi) On 08.12.2004, the appellant informed the Second Engineer that the Employer can take a decision only if the Engineer certifies the amounts considered due by the Contractor in the Statement at Completion as per Clause 60.2 of the Agreement as the First Engineer had not certified the same during their incumbency as the Engineer.

(vii) On 20.04.2005, the Second Engineer certified the amount found due to the respondent No.1 to be Rs.13,76,31,668/- through the Interim Payment Certificate No.45 (‘IPC’). The appellant disputed the IPC and referred the matter to the Dispute Review Board (‘DRB’) on 29.06.2005 (‘Dispute No.1’). The respondent also r