An arbitral tribunal cannot ignore express, mandatory contractual notice provisions. Where a contractor fails to follow stipulated procedures for claiming cost escalations and accepts extensions of time on a 'no-cost' basis, an award granting such compensation is perverse and liable to be set aside under Section 37.

COMMON JUDGMENT

(Judgment of the Court was made by P.VELMURUAN, J.

1.Arbitration Appeal has been filed to set aside the order dated 18.06.2024 made in Arb O.P.No.3 of 2019 on the file of the Principal District and Sessions Court, Sivagangai, by confirming the Arbitration award dated 10.10.2018 in the matter of dispute between by M/s.Subaya construction company limited and Tamil Nadu Water and Drainage Board, Madurai, regarding the work of providing under ground sewerage scheme to Sivagangai Municipality work of Collection system package 1.

2. Civil Miscellaneous Appeal has been filed under Section 37(1) & (2) of Arbitration and Conciliation Act 1996, against the fair and decreetal order passed by the learned Principal District Judge, Thoothukudi, in Ar.O.P.No.83 of 2019 dated 18.10.2019.

3. As pleadings and submissions are identical in both the cases, both the appeals are heard together and disposed of by this common judgment.

4. The Tamil Nadu Water and Drainage Board called for tenders for carrying out the work of providing underground sewerage scheme to Sivagangai Municipality in Zone-1 providing collection system (Package 1) and Ramanathapuram Package-2, in which, the 1^st respondent in both the appeals became the successful bidders and the tenders were accepted at the total cost of Rs.12,46,43,802/- and Rs. 9,87,57,743/- respectively, and the work order was issued vide appellant's letter dated 26.12.2006 and 16.06.2006 respectively. However, the 1^st respondent had taken over the respective sites only on 09.02.2007 and 01.12.2006 respectively, and commenced the work only on 05.03.2007 and 20.12.2006 respectively, after repeated reminders and instructions by the appellant Board. The period of contract of the said work was extended at the request of the 1^st respondent from time to time on condition that there will not be any extra commitment to the appellant. After continuous efforts and instructions, the work was completed as per the agreement on 30.03.2011 and 22.09.2011 respectively, and final bill was settled on 12.11.2012 and 15.11.2012 respectively. It is pertinent to note that no protest was made by the 1^st respondent at any point of time, as such, the contract agreement was ended without any protest by the 1^st respondent and they received the final payment accordingly. While so, the 1^st respondent had raised an adjudication before the Adjudicator seeking 60% of the final bill as compensation for the delay in completion of the agreement value and for the delay in completion of the contract work. The 1^st respondent filed a claim petition in both the cases before the Adjudicator on 17.05.2013. The Adjudicator did not peruse the materials placed before him and had recommended the employer to make payment of the approved amount. According to the appellant, if at all there has been delay in the execution work attributable to the employer, it should have been referred as a dispute to the Adjudicator concerned within 14 days of such dispute. However, without adhering to the terms of the agreement, the 1^st respondent had raised the dispute before the Adjudicator according to his own whims and convenience and the Adjudicator's decision was received by the Engineer in both the cases only on 01.08.2013 and the same was not agreed upon by the Engineer. It was communicated to the 1^st respondent vide Engineer's letter dated