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2020 Supreme(Cal) 123

IN THE HIGH COURT OF CALCUTTA
Moushumi Bhattacharya, J.
State Of West Bengal - Appellant
Versus
Pam Development Private Limited - Respondent
Arbitration Petition No. 212 of 2010
Decided On : 03-03-2020

Advocates Appeared:
Jishnu Chowdhury, Advocate, Ratul Das, Advocate, Paritosh Sinha, Advocate, Tirthankar Das, Advocate, Arindam Mondal, Advocate, Aniruddha Mitra, Advocate, Dhilon Sengupta, Advocate, Madan Mohan Roy, Advocate

The main legal point established is that the Arbitrator's reasons must be sufficient and supported by relevant documents, and unintelligible reasons are not acceptable.

Headnote:

Section 34 - Arbitration and Conciliation Act, 1996 - Special Repair Programme 2000-2001 - 2, 11 - The court upheld the Arbitrator's decision to reject claim no.1 for hire charges of land but allowed claim nos.2 to 8(b) for idle charges, refund of security deposit, loss of profit, price escalation, and interest. The court found that the Arbitrator provided sufficient reasons and referred to relevant documents to support the decision.

Fact of the Case:

The disputes arose from a contract for a Special Repair Programme for National Highway-II. The respondent made several claims, and the Arbitrator allowed some while rejecting others. The petitioner challenged the Award on the ground of absence of reasons.

Finding of the Court:

The court found that the Arbitrator's reasons were sufficient and referred to relevant documents. The court upheld the Award and noted the protracted litigation between the parties.

Issues: The issues included the rejection of claim no.1 and the allowance of claim nos.2 to 8(b) by the Arbitrator, and the challenge to the Award based on the absence of reasons.

Ratio Decidendi: The court held that the Arbitrator provided sufficient reasons and referred to relevant documents, supporting the decision to reject some claims and allow others.

Final Decision: The court upheld the Award and disposed of the case.

JUDGMENT

Moushumi Bhattacharya, J. - The impugned Award under challenge in this application under Section 34 of The Arbitration and Conciliation Act, 1996 (the Act) is of a learned Sole Arbitrator and is dated 21st January, 2010.

2. The disputes and differences between the parties arose out of a contract relating to a "Special Repair Programme 2000-2001" for different stretches of the National Highway-II under the Hooghly Highway Division No. II, for which the petitioner published a tender and the respondent was selected as the successful bidder. A formal work order was issued by the petitioner in favour of the respondent on 26th March, 2001 and the work was to be completed within a period of six months under the contract. Due to disagreements arising between the parties, the respondent invoked the arbitration clause in the contract by its letter dated 20th June, 2003 and the learned Sole Arbitrator was appointed thereafter in an application under Section 11 of the 1996 Act.

3. The respondent herein was the claimant before the learned Arbitrator. The respondent made several claims including for hire charges of land for installation of machinery, camp office, etc., idle charges for plant and machinery for the failure of the concerned department of the respondent to ensure cash flow, idle labour and equipment charges, refund of security deposit, amount for price escalation of all materials and dues pending with the department against the work executed and a claim for interest, etc.

4. By the impugned Award, claim no.1 of the respondent for Rs.1,30,000/- for hire charges of land arranged by the respondent/claimant for installation of machinery etc beyond the initial contracted period was rejected by reason of the claim being contrary to the special conditions of contract and for the respondent not being able to prove the said claim. Claim nos.2 to 8(b) which were for idle charges of plant and machinery, idle labour charges, dues pending with the respondent against work executed, refund of security deposit, loss of profit, price escalation, interest at the rate of 8% per annum on the delayed payment of the executed work and on the matured security deposit were allowed by the learned Arbitrator. The learned Arbitrator further held that the claims shall carry simple interest at the rate of 18% per annum from the date of the Award until payment. Costs claimed by the respondent in its letter dated 14th July, 2009 for Rs.6,40,900/- were also allowed.

5. Mr. Jishnu Chowdhury and Mr. Ratul Das, learned counsel appearing for the petitioner, assails the Award on the ground of absence of reasons. Counsel submits that the learned Arbitrator has not referred to any of the documents placed before him and in any event the reasons given are insufficient. Counsel relies on Dyna Technologies Pvt. Ltd. Vs. Crompton Greaves Limited,2019 SCCOnlineSC 1656 for the proposition that reasons must be sufficient, adequate and intelligible. Counsel also relies on Som Datt Builders Limited Vs. State of Kerala, 2009 10 SCC 259 and on State of West Bengal Vs. Bharat Vanijya Eastern Private Limited,2019 SCCOnlineCal 3605 to urge that an Award is liable to be set aside for lack of reasons. It is submitted that the balance claims were allowed without any finding on the question of quantification and the Award does not record the reasons for the Arbitrator being satisfied as to why the claims contained in the letter dated 26th May, 2003 of the respondent should be allowed.

6. Mr. Aniruddha Mitra, learned counsel appearing for the respondent/claimant submits that ten years have passed since the impugned Award and that the work had been completed by the respondent contractor to the full satisfaction of the State. Counsel contends that there are adequate reasons for sustaining the Award and that the Arbitrator has referred to several documents including a letter dated 8th May, 2003 of the respondent with hand written endorsements, a certificate dated 19th May, 2003 iss

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