An arbitral award must provide clear and intelligible reasoning; lack thereof renders it void under Section 34 of the Arbitration Act.

ORDER

This petition has been filed under Section 34 of the Arbitration and Conciliation Act, 1996 (for the sake of brevity, hereinafter referred to as ' the Act') challenging the Award passed by the Arbitral Tribunal dated 26.12.2020.

2.The respondents called for a tender for construction of Laboratory-South Block, for IITD & M at Melakottiyur, Kancheepuram District, including internal water supply, sanitary installations, drainage and internal electrical installations. The stipulated date for the start of the work was on 27.06.2013/26.10.2014 and the total period permitted was sixteen months. However, the work was completed with a delay of twenty two months. Penalty was imposed by the respondents based on certain operating clauses of the Agreement which was disputed by the petitioner. A set of claims were made by the petitioner and were referred to the Department for their settlement. The Chief Engineer, allowed a few claims and rejected the others. In view of the same, the petitioner requested the disputes to be referred to the Dispute Redressal Committee which also came to be rejected. Thereafter, the petitioner made a request for appointment of an Arbitrator for referring the dispute between the parties and accordingly, a Sole Arbitrator was appointed.

3.The petitioner broadly made four claims and they are:

(i) Cost overhead, (ii) Reduction in the scope of work, (iii) Escalation of rates and (iv) Interest on delayed payments.

4.The Sole Arbitrator partly granted compensation for claim (a), rejected the compensation under the claim (b), partly granted compensation for claim (c) and in the same manner granted interest at the rate of 4% towards claim (d).Aggrieved by the same, the present petition has been filed before this Court.

5.Heard Mr.P.J.Rishikesh, learned counsel appearing on behalf of the petitioner and Mr.M.Karthikeyan, learned counsel appearing on behalf of the respondents.

6.Before going into the Award, this Court must keep in mind the fact that the Sole Arbitrator is an Engineer and was a former Additional Director General (Special), CPWD. In view of the same, while assessing the Award, this Court cannot apply the yardstick of a legally trained mind and this Court must only see if the Sole Arbitrator has taken a possible view and has assigned proper reasons while granting or rejecting the claims. I had an occasion to deal with the manner in which an Award has to be appreciated when it is passed by a layman in M/s.State Industries Promotion Corporation of Tamil Nadu Ltd., vs. M/s.RPP Infra Projects Limited (Formerly Known as RPP Construction (P) Ltd.) reported in 2025 5 LW 335. Accordingly, the same yardstick will be applied while appreciating the Award passed by the Sole Arbitrator.

7.The Sole Arbitrator has adopted a particular methodology while passing the Award. The entire Award is in the form of a tabular column which contains three columns viz., the case of the claimant, the case of the respondents and the findings of the Sole Arbitrator.

8.Insofar as the first claim made by the petitioner towards cost overhead, the Sole Arbitrator has extracted the grounds raised by the claimant, the documents relied upon by the claimant and also the evidence that was let in by the claimant. It runs to several pages and the Sole Arbitrator has taken into consideration the stand taken by the respondents and has rendered the following findings:

The execution of project was delayed for 996 days. There was severe restriction on the availability of funds throughout the execution of this project. The extension of time was sanctioned fully without any levy of damages by the respondents. On this account