Judicial intervention in an arbitral award is extremely limited. Courts cannot re-appreciate evidence or substitute their own interpretation for that of the arbitrator. Interference is restricted to cases of patent illegality, perversity, or conflicts with the fundamental policy of Indian law or basic notions of justice.

Per Rajani Dubey, J

1. The Appellants – S.E.C.L. authority filed this arbitration appeal under Section 37 of the Arbitration and Conciliation Act, 1966 (for short ‘the Arbitration Act’) read with Section 13 of the Commercial Courts, Commercial Court Act, 2015 (for short ‘the Commercial Act’) against order dated 06.02.2018 passed by the learned Commercial Court (District Level), Naya Raipur (C.G.) in M.J.C. No.09/2017, whereby the application preferred by the appellants herein under Section 34 against the arbitral award dated 05.02.2017 passed by the learned Sole Arbitrator, was dismissed holding it to be not against the public policy of India.

2. Brief facts of the case are that the Appellants and the respondent-company entered into a contract on 09.11.1990 for construction of 250 units of miners’ quarters (D/S), including development work at Khurasia Colliery in the Chirmiri Area of SECL (Chhattisgarh), vide Agreement No. CE(C)/BSP/AGT/2/153.

3. Prior to execution of the agreement, the Chief Engineer of the appellants (SECL) issued a provisional letter of acceptance dated 28.02.1990. Subsequently, the Additional Chief Engineer issued a work order dated 31.03.1990, requiring the contractor to deposit an additional sum of Rs. 66,227/- (Rs. Sixty Six Thousand Two Hundred Twenty-Seven only) towards 1% security deposit, making a total initial security deposit of Rs. 1,66,227/-. It was further stipulated that 5% of the gross value of running account bills would be deducted towards security deposit, aggregating to Rs. 8,31,137/- (Rs. Eight Lakh Thirty One Thousand One Hundred Thirty-Seven only).

4. The stipulated period for completion of the work was 18 months, to be reckoned from the 10th day of issuance of the letter of intent or from the actual date of handing over of the site, whichever was later. The arrangement of cement was primarily the responsibility of the contractor; however, the appellants could supply cement subject to availability, with the cost to be recovered as per the rates specified in the schedule. Electricity was to be supplied at a single point, and the cost of consumption was to be recovered at the rates prescribed by SECL from time to time.

5. The respondent sought extension of time on multiple occasions. Initially, by letter dated 11.06.1992, the appellants granted extension up to 28.06.1992. Thereafter, the respondent applied for further extension up to 31.12.1992 vide letter dated 30.08.1992. Subsequently, the respondent further sought for extension of time upto 30.09.1993 and 30.09.1994, which was further granted by the appellants.

6. During the subsistence of the contract, the disputes arose between the parties in relation to the said contract. The respondent invoked the arbitration clause as stipulated in the Contract; however, the appellants failed to appoint an Arbitrator. Consequently, the respondent filed an application under Section 11(6) of the Act, 1996 before this Court, pursuant to which a Sole Arbitrator was appointed. Thereafter, the learned Sole Arbitrator after having considered the material facts, documentary as well as oral evidence of the parties, passed the arbitral award on 05.02.2017 holding that the respondent is entitled for retention amount and also for refund of security deposit & bank guarantee. The order dated 05.02.2017 passed by the Sole Arbitrator was subjected to challenge before the Commercial Court, Naya Raipur (C.G.) being M.J.C. No.09/2017 and the learned Commercial Court, vide impugned order dated 16.02.2018 dismissed the application of the appellants on the ground that the order passed by the learned S