O.M.P. (COMM) 298/2021

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IN THE HIGH COURT OF DELHI AT NEW DELHI

Date of Decision: 24^thNovember, 2021

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O.M.P. (COMM) 298/2021 & I.As. 12961-62/2021

GAIL (INDIA) LIMITED

... Petitioner

Through:

Ms.

Manmeet

Arora,

Ms.

Chand

Chopra and Mr. Tarang Gupta,

Advocates.

versus

M/S STERLING AND WILSON PRIVATE LIMITED ... Respondent

Through:

Mr. Sanjeev Kumar Tyagi, Advocate

with Mr. Jaydeep Ghosh, AR.

CORAM:

HON'BLE MR. JUSTICE SANJEEV NARULA

JUDGMENT

[VIA HYBRID MODE]

SANJEEV NARULA, J. (Oral):

1.

The present petition under Section 34 of the Arbitration and

Conciliation Act, 1996 [hereinafter, “the Act”] impugns the Arbitral Award

dated 12^thJune, 2021 [hereinafter, “Award”], passed by the learned Sole

Arbitrator, whereby claims of the Respondent – M/s Sterling and Wilson

Private Limited [hereinafter, “SWL”] have been allowed in entirety against

the Petitioner – Gail (India) Limited [hereinafter, “GAIL”].

BRIEF FACTS

2.

Pursuant to a tender floated by GAIL for the work of ‘220 KV Outdoor

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O.M.P. (COMM) 298/2021

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Pata, Uttar Pradesh’ [hereinafter, “Agreement”], SWL emerged as the

successful bidder. A Fax of Acceptance dated 14^thDecember, 2011 was issued

conveying acceptance of the bid. The project was to be completed within 18

months from the date of issuance of Fax of Acceptance, i.e., by 13^thJune,

2013.

3.

On 24^thJanuary, 2012, a Detailed Letter of Acceptance [hereinafter,

“DLoA”] was issued to SWL. The DLoA, along with the Fax of Acceptance,

the Agreement, the Special Conditions of Contract [hereinafter, “SCC”], the

General Conditions of Contract [hereinafter, “GCC”] and the Bidding

Documents, governed the terms of the contract between the parties.

4.

As per Clause 16 of DLoA, the Resident Construction Manager/ Site-

in-charge of Engineers India Limited, was appointed as the Engineer-in-

Charge [hereinafter, “EIC”].

5.

The work under the Agreement was not completed within the scheduled

period of completion. It was only on 16^thFebruary, 2016 that a Completion

Certificate was issued by Engineers India Limited. On 13^thFebruary, 2016,

SWL submitted its final bill under the Agreement – which was disputed by

GAIL. The ‘Site-Clearance’ Certificate was issued by SWL on 16^thFebruary,

2016 after finishing the project. Thereafter, SWL invoked arbitration vide

notice dated 16^thApril, 2018, and disputes were referred to arbitration.

6.

SWL raised claims worth Rs. 2,42,22,993/- under following heads:

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S. No.

CLAIM

SUM CLAIMED

1.

Release of retention money withheld by the Petitioner

on account of Price Reduction Scheme

Rs. 71,52,433/-

2.

Refund of recoveries carried out by the Petitioner from

the final bill submitted by the Respondent

Rs. 23,11,906/-

3.

Claim towards additional work done by the Respondent

(Electrical and Civil)

Rs. 28,56,175/- &

Rs. 12,45,272/-

4.

Compensation for extended stay

Rs. 54,00,000/-

5.

Interest

@15%

per

annum

from

01.03.2016

to

30.09.2018

Rs. 52,57,207/-

Total Sum Claimed (and awarded)

Rs. 2,42,22,993/-

7.

The learned Arbitrator framed issues, which are noted in paragraph 22

of the impugned Award, and on that basis, the afore-noted claims were

allowed in totality by way of the impugned Award.

CLAIMS AND ANALYSIS

8.

The submissions of counsel for both parties are separately dealt

hereinafter as per the heads of claims, which are as under:

9.

CLAIM NO. 1: RELEASE OF RETENTION MONEY WITHHELD ON

ACCOUNT OF PRICE REDUCTION SCHEME

9.1.

The learned Arbitrator has dealt with this Claim in Issues No. (i) & (ii)

of the Award under paragraphs no. 26 to 30.

9.2.

On this point, Ms. Manmeet Arora, counsel for GAIL, states as follows:

(i)

that the Award erroneously holds GAIL responsible for the delay in the

execution of the project – contrary to the documents placed on record

by both parties.

(ii)

The Arbitrator has erroneously and selectively relied upon the letter of

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