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2024 Supreme(Online)(DEL) 12437

$~P-1, 2 & 3 * IN THE HIGH COURT OF DELHI AT NEW DELHI Decided on:- 28th May, 2024 + O.M.P. (COMM) 518/2023 & I.As. 25419/2023, 25420/2023 WADIA TECHNO ENGINEERING SERVICES LIMITED ..... Petitioner versus DIRECTOR GENERAL OF MARRIED ACCOMMODATION PROJECT & ANR. ..... Respondents + O.M.P. (COMM) 526/2023 & I.As. 25658/2023, 25659/2023 WADIA TECHNO ENGINEERING SERVICES LIMITED. ..... Petitioner versus DIRECTOR GENERAL OF MARRIED ACCOMMODATION PROJECT & ANR. ..... Respondents + O.M.P. (COMM) 527/2023 & I.As. 25660/2023, 25661/2023 WADIA TECHNO ENGINEERING SERVICES LIMITED. ..... Petitioner versus DIRECTOR GENERAL OF MARRIED ACCOMMODATION PROJECT & ANR. ..... Respondents Appearance:- Mr. Jayant Mehta, Senior Advocate with Mr. Shambo Nandy & Ms. Nikita Sethi, Advocates for Wadia Techno Engineering Services Ltd. in Item Nos. 37 to

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Mr. Shashank Garg, CGSC with Ms. Aradhya Chaturvedi & Ms. Nishtha Jain, Advocates for Respondent in Item No. 37.

Mr. Kirtiman Singh, CGSC with Mr. Varun Pratap Singh, Mr. Waize Ali Noor, Mr. Varun Rajawat & Mr. Aryan, Advocates for Respondent in Item Nos. 38 &

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CORAM:

HON’BLE MR. JUSTICE PRATEEK JALAN

J U D G M E N T

1. By way of these petitions under Section 34 of the Arbitration and Conciliation Act, 1996 [“the Act”], the petitioner assails three arbitral awards dated 17.08.2023, which arise out of similar contracts between the parties. The contracts were for consultancy services to be provided by the petitioner, in connection with construction of various married accommodation projects of the respondent.

2. The nature of the contracts, and contentions of the parties, in all three cases, are on similar lines. The petitions have, therefore, been taken up for hearing together, with the consent of learned counsel for the parties.

A. FACTS

3. The respondent issued notices inviting bids on 12.02.2009 for selection of a “Detailed Engineering and Project Management Consultant” [“the Consultant”] for three married accommodation projects. The Consultant was required to provide services at the pre- construction stage, during construction, and post-construction. These included preparation of the tender for appointment of a contractor to carry out the construction, selection of the contractor and supervision of the contractor’s performance. The detailed scope of work was provided in the tender documents. Payment of consultancy charges was to be made in 5 stages. 30% of the consultancy payment was payable during the pre- construction phase (Stage 1 and Stage 2 payments), 55% during the construction phase (Stage 3 payment) and 15% in the post-construction phase (Stage 4 and Stage 5 payments).

4. The petitioner’s bids for the three consultancy contracts were the lowest, and Letters of Acceptance were issued in its favour on 22.05.2009. Parties also entered into three contracts, all dated 22.05.2009 [“Contract”].

5. The details of the contracts in each of the case are provided below:

Case No. OMP (COMM) 518/2023 [“Vizag case”] OMP (COMM) 526/2023 [“Pune case”] OMP (COMM) 527/2023 [“Ahmednagar case”]
Site of Project Behmunipatnam (Vizag) Kirkee (Pune) and Lonavala (Navy) Ahmednagar, Deolali & Nasik
Fee provided under the Contract 1.18% of the Project Cost 1.51% of the Project Cost 1.9% of the Project Cost
Estimated project cost Rs. 254 crores Rs. 243 crores Rs. 195 crores
Estimated time for completion 3 years 3 years 3 years

6. Contractors were duly engaged for construction of the projects, but the projects took much longer to complete, compared to the originally contemplated periods. The petitioner contended that it was entitled to enhanced compensation as a result. The petitioner’s claims in the Vizag case were also based upon an enhancement in the project cost paid to the contractor. In the Pune and Ahmednagar cases, the contracts of the original contractors were terminated and “risk and cost contracts” were entered into with other contractors for completion of the projects. The petitioner sought enhanced compensation based upon the value of the risk and cost contracts in those two cases.

7. As the parties were not able to arrive at an agreement on these claims, the disputes were referred to arbitration under the three contracts. 8. The petitioner raised the following claims before the learned Arbitrator:

Claim No. Particulars of Claim Amount of Claim (Rs.) [Vizag case] Amount of Claim (Rs.) [Pune case] Amount of Claim (Rs.) [Ahmednagar case]
01 Towards enhancement in DEPMC Fees (Stage - 1 and Stage - 2) consequent to enhancement of the Project Cost, after adjusting the payments received on this account as per Appendix- A. 13,63,874.00 47,78,298.00 52,44,322.00
02 Towards enhancement in DEPMC Fees (Stage – 3), consequent to enhancement of the Project Cost, after adjusting the 23,30,820.00 1,13,39,318.00 80,03,787.00
payments received on this account as per Appendix- B.
03 Towards enhancement in DEPMC Fees (Stage-4 and Stage-5) consequent to enhancement of the Project Cost, as per Appendix - C 61,95,798.00 77,60,817.00 75,84,696.00
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