The court upheld the arbitrator's award, emphasizing that even without precise evidence, reasonable estimates of damages are acceptable in arbitration, reaffirming the principle that awards must be logically deduced from the evidence presented.

JUDGMENT

VINOD KUMAR, J.

1. This appeal under Section 37 of the Arbitration and Conciliation Act , 1996 (‘the Act’, hereinafter) has been filed with the following prayers:

“(a) Set aside the Impugned Order dated 09.02.2023 passed by the Ld. District Judge in OMP (COMM) 63/21 between Bharat Heavy Electricals Limited vs. Delkon India Pvt. Ltd. and/or

(b) Set-aside the Award dated 02.06.2021 passed by the Ld. Sole Arbitrator and/or (c) Pass such other or further order(s) as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case.”

2. For sake of convenience, the appellant would be also referred to as ‘BHEL’ and the respondent would also be referred to as ‘Delkon’.

3. Vide impugned award dated 02.06.2021, the arbitrator rejected all claims of BHEL except claim no.11 which was partly allowed. The Arbitrator however, partly allowed the counter claims of Delkon. Aggrieved by this award, BHEL filed objections under Section 34 of the Act before learned District Judge (Comm-02), South District, Saket Court, New Delhi (in short ‘District Judge’) who dismissed the same vide impugned judgment dated 09.02.2023.

DISPUTE

4. The appellant-BHEL invited bids for execution of erection, testing, and commissioning of two 210MW boilers at Feroz Gandhi Thermal Power Project, Unchahar, Uttar Pradesh. The respondent's (Delkon) bid was successful and accordingly, a letter of intent (hereafter “LOI”) dated 21.06.1996 was issued by the appellant. This was followed by a Contract Agreement No.50/96 dated 12.11.1996, which contained arbitration Clause 33. The total value of works awarded to the respondent was Rs.3,13,20,000/-. The stipulated period for the completion of this work was 29 months, commencing 15 days subsequent to the date of the issuance of the LOI. According to Clause 4 of the Contract, respondent was to immediately get in touch with the Construction Manager of the appellant at the work site for further instruction regarding the commencement of the work in order to complete the work in time, keeping in view Clause 52 of the contract which refers to the Time Schedule.

5. Dispute arose, when as per appellant-BHEL, the respondent-Delkon failed to deploy agreed manpower as per the schedule and deployment chart. Several letters were issued by the appellant to the respondent regarding inadequate Tools & Plants (in short T&P) alongside poor progress of respondent’s work, subsequently, leading to the contract being terminated by the appellant on 15.01.1997, relying on Clause 25.3 of the contract i.e.-

“25.3 To terminate the contract after due notice and forfeit the Security Deposit and recover the loss sustained in getting the balance work done through other agencies in addition to liquidated damages in the event of:

a. Contractor's continued poor progress.

b. Withdrawal from or abandonment of the work before completion of the work.

c. Corrupt act of the contractor. d. Insolvency of the contractor.

e. Persistent disregard of the instructions of BHEL. f. Assignment, transfer, subletting of the contract work without BHEL's written permission.

g. Non-fulfilment of any contractual obligations”

LOCAL COMMISSIONER

6. A petition OMP No.08/1997 dated 20.01.1997 was filed by respondent-Delkon under Section 9 of the Act before High Court of Delhi praying that appellant-BHEL be restrained from encashing Delkon’s Bank Guarantees.

7. Another petition i.e. OMP No.37/1997 dated 01.03.1997 was filed by the respondent to seek the release of its T&P from the work site held under appellant’s control. Via interim order dated 04.03.1997, the