The court held that an arbitral award rendered after an inordinate delay violates public policy as per Section 34 of the Arbitration and Conciliation Act, 1996, leading to its invalidation.

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JUDGMENT

CHANDRA DHARI SINGH, J.

FACTUAL MATRIX

1. The petitioner has preferred the present petition raising objections under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the “Act”) for setting aside the Arbitral Award dated 9 ^th June, 2020 1 passed in the matter titled "Star Bus Services Pvt Ltd vs Department of Transport, Government of NCT of Delhi" by the Sole Arbitrator.

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2. The Arbitral Tribunal passed the Impugned Award and awarded the respondent an amount of Rs.57,04,47,373/- with interest at 9% per annum from 5^th June, 2016 till the date of payment. The respondent was also awarded a cost of Rs.2,29,90,875/- vide the Impugned Award.

3. Previously, in light of havoc created by the repeated fatal accidents due to rash and negligent driving by the blue line bus drivers, in the Public Interest Litigation bearing W.P. (Crl.) 878/2007 titled as "Court on its own motion vs. State of Delhi & Ors." and in furtherance of the order passed by the Hon‟ble Supreme Court in MC. Mehta vs. Union of India (1997) 8 SCC 770, the Division Bench of this Court took suo motu action directing the GNCTD to formulate a proper policy for providing better public transport system in Delhi.

4. To provide safer and better quality public transport system, a policy was formulated by Delhi Integrated Mechanism of Transportation System Ltd. (hereinafter referred to as “DIMTS”) which was entrusted with the task of formulating the said policy for the GNCTD. DIMTS classified 657 bus routes in Delhi into 17 Clusters as part of the scheme, and each cluster comprised of bunch of routes.

5. On 26^th February, 2008, the Respondent invited bids for provision of bus services in Cluster-01 vide Request for Qualification (RFQ) for private stage carriage buses through corporate entities to which Claimant was an eligible entity. After due evaluation of proposals, the GNCTD accepted the proposal of the Claimant in respect of Cluster-01 and in furtherance of the same, issued a 2 Letter of Acceptance dated 5^th May 2009. Between the Claimant and the Respondent, a Concession Agreement dated 12^th April, 2010 was duly executed whereby the respondent was to induct 231 low floor CNG buses for the route as specified in Cluster-I, which was a BOOT contract i.e. Build-Own-Operate- Transfer Contract. The period of concession under the Contract was 10 (ten) years beginning from Commencement Date.

6. As per the terms agreed between the Claimant and the Respondent in CA, the Respondent was required to provide a consolidated Depot at Gadaipur, Delhi, with certain civil infrastructure facilities stipulated therein. During the subsistence of the contract, issues arose between the parties due to the termination of the said contract by the respondent on 4.2.2016.

7. The lis of the provision of buses with respect to the Concession Agreement underwent a series of litigations. Finally, this Court in O.M.P. (T) (COMM.) No. 05 of 2016 and Arbitration Appeal No. 31 of 2015, with the consent of the parties, terminated the mandate of the Sole Arbitrator and appointed Justice R.C. Lahoti (Retd.), as the Sole Arbitrator to adjudicate the d