Public Works Department Nh Wing And Anr vs Ms Gvr Infra Projects Ltd
- Court
- Delhi High Court
* IN THE HIGH COURT OF DELHI AT NEW DELHI
st
Date of decision: 01 JULY, 2026
IN THE MATTER OF:
+ O.M.P. (COMM) 236/2026 & I.A. 13159/2026
PUBLIC WORKS DEPARTMENT NH WING AND ANR
.....Petitioners
Through: Mr. Anirudh Sanganeria and Mr.
Bikram Singh Patel, Advocates
versus
MS GVR INFRA PROJECTS LTD .....Respondent
Through: Dr. Amit George, Mr. Dhiraj
Abraham Philip, Mr. Vaibhav
Gandhi, Mr. Febin Mathew Varghese,
Mr. Shivam Parashar and Ms.
Soyarchon Khangrah, Advocates
CORAM:
HON'BLE MR. JUSTICE SUBRAMONIUM PRASAD
JUDGMENT
1. The present Petition under Section 34 of the Arbitration and
Conciliation Act, 1996 [“ the Act ”], has been preferred against the Arbitral
Award dated 15.01.2026 passed by a three-member Arbitral Tribunal
[“ Impugned Award ”], while adjudicating disputes having arisen between
the Petitioners (Respondents in the arbitral proceedings) and Respondent
(Claimant in the arbitral proceedings).
2. By way of the Impugned Award, the Arbitral Tribunal allowed all the
claims, except Claim No. 5 and awarded a sum of Rs. 48,57,61,126/- along
with an interest at the rate of 12% per annum in favor of the Respondent
herein, while dismissing the counter-claims of the Petitioners.
Signature Not Verified
Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:02.07.2026
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O.M.P. (COMM) 236/2026 Page 1 of 40
3. A brief factual background pertinent to the adjudication of the instant
Petition is given below:
i. The Ministry of Road Transport and Highways [“ MORT&H ”],
Government of India, acting through the Superintending Engineer
(EAP), which is the Petitioner No. 2 herein, invited bids for
execution of the works of „ Rehabilitation and Upgradation to 2
lane/2 lane with paved shoulder configuration and strengthening
of Nuapada – Bangomunda Section from (Km 90.0 to Km 158.0 of
NH-217 in the State of Odisha under Phase 1 of National
Highways Inter Connectivity Improvement Project (NHIIP) ‟, on an
item rate basis [“ the Project ”].
ii. The Respondent submitted its bid on 03.10.2013, which came to
be accepted by MORT&H vide the Letter of Acceptance dated
14.02.2014. Subsequently, a detailed Agreement dated 21.03.2014
was executed between MORT&H and the Respondent, whereby
the Respondent was required to executed the work of Rs.
135,78,78,887/- within a period of 730 days from the date of
commencement, i.e., 13.06.2014 [“ the Contract ”].
iii. The scheduled completion date of the Project as per the Contract
was 11.06.2016.
iv. Additionally, M/s EptisaServicios de Ingenieria S.L. in
cooperation with the Eptisa India Private Limited was appointed
as the Engineer for the Project [“ Engineer ”].
v. Clause 20 of the Contract set out the procedure to be followed by
the parties for „ Claims, Disputes and Arbitration ‟, according to
which the disputes, if any, remaining unresolved after having
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Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:02.07.2026
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O.M.P. (COMM) 236/2026 Page 2 of 40
undergone the mechanisms of the Dispute Board as well as
amicable settlement, were to be settled through arbitration under
Clause 20.6, which is being reproduced below:
“ 20.6 Arbitration:
Any dispute between the Parties arising out of or in
connection with the Contract not settled amicably
in accordance with Sub - Clause 20.5 above and in
respect of which the DB 's decision (if any) has not
become final and binding shall be finally settled by
arbitration. Arbitration shall be conducted as
follows:
(a) if the contract is with foreigncontractors,
(i) for contracts financed by all
participating Banks except under sub-
paragraph (a) (2) below: international
arbitration (1) with proceedings
administered by the arbitration
institution designated in the Contract
Data , and conducted under the rules
of arbitration of such institution ; or ,
if so specified in the Contract Data,
(2) international arbitration in
accordance with the arbitration rules
of the United Nations Commission on
International Trade Law
(UNCITRAL); or (3) if neither an
arbitration institution nor UNCITRAL
arbitration rules are specified in the
Contract Data , with proceedings
administered by the International
Chamber of Commerce (ICC) and
conducted under the ICC Rules of
Arbitration; by one or more
arbitrators appointed in accordance
with said arbitration rules.
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Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:02.07.2026
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(b) if the Contract is with domestic
contractors, arbitration with proceedings
conducted in accordance with the laws of the
Employer’s country.
The place of arbitration shall be the neutral
location specified in the Contract Data; and
the arbitration shall be conducted in the
language for communications defined in
Sub-Clause.
1.4 [Law and Language]
The arbitrators shall have full power to open up,
review and revise any certificate, determination,
instruction, opinion or valuation of the Engineer,
and any decision of the DB, relevant to the dispute.
Nothing shall disqualify representatives of the
Parties and the Engineer from being called as a
witness and giving evidence before the arbitrators
on any matter whatsoever relevant to the dispute.
Neither Party shall be limited in the proceedings
before the arbitrators to the evidence or arguments
previously put before the DB to obtain its decision,
or to the reasons for dissatisfaction given in its
Notice of Dissatisfaction. Anydecision of the DB
shall be admissiblein evidence in the arbitration.
Arbitration may be commenced prior to or after
completion of the Works. The obligations of the
Parties, the Engineer and the DB shall not be
altered by reason of any arbitration being
conducted during the progress of the Works.‖
vi. In June 2018, a sub-contractor being M/s LEKCON Infrastructure
(P) Limited was appointed vide a Tripartite Agreement dated
15.06.2018, entered into between the MORT&H, the Respondent
as well as the Sub-Contractor.
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Signed By:HARIOM
SINGH KIRMOLIYA
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vii. Material on record reveals that the Respondent was admitted into
Corporate Insolvency Resolution Process [“ CIRP ”] on
15.10.2018. The Resolution Plan was finally approved on
09.04.2021.
viii. It is stated that thereafter, the execution of the Project encountered
certain difficulties, ultimately leading to continuation of works
much beyond the scheduled completion date. This was despite the
grant of extensions of time [“ EOTs ”] by the MORT&H up to
31.03.2022 without imposition of Liquidated Damages [“ LD ”],
thereby permitting the Respondent continuing working beyond the
scheduled completion date.
ix. The Contract was prematurely closed w.e.f. 31.05.2022 after
which final bill submitted by the Respondent on 03.06.2022 was
certified by the Engineer. However, subsequently, the MORT&H
imposed LD on the Respondent on 30.06.2022 and thereafter on
12.08.2022, that the MORT&H conveyed its decision to the
Respondent about foreclosing the Contract. Subsequently on
06.09.2022, the MORT&H recovered the LD by invoking the
Performance Bank Guarantee submitted by the Respondent.
x. The Respondent invoked arbitration under Clause 20.6 of the
Contract vide Letter dated 18.03.2023 addressed to the
Superintending Engineer, MORT&H. In its reply letter sent on
29.03.2023, the MORT&H required to the Respondent to
approach the Chief Engineer (NH), PWD Odisha for grievance
redressal. Accordingly, the Respondent issued an arbitration notice
vide Letter dated 26.04.2023 addressed to the Chief Engineer
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Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:02.07.2026
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(NH), PWD Odisha, and thereafter, the Arbitral Tribunal came to
be constituted as per Clause 20.6 of the Contract.
xi. Before the Arbitral Tribunal, the Respondent filed the following
nine (9) claims along with its Statement of Claims:
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Signed By:HARIOM
SINGH KIRMOLIYA
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xii. On the other hand, the Petitioners preferred the following counter-
claims:
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SINGH KIRMOLIYA
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4. As per the Arbitral Tribunal, the fundamental issue to be decided was
the responsibility of delay caused in execution of the Project and the claims
of both the parties arising from the prolongation of the contract period. Apart
from holding that the foreclosure of the Contract on 31.05.2022 was
wrongful, the Arbitral Tribunal also observed that the imposition of LD by
the Petitioners was illegal, as the delay caused in completion of works was
entirely attributable to the Petitioners. In light of this conclusion, the Arbitral
Tribunal rejected the counter-claims of the Petitioners, observing them to be
based on the issue of delay in completion of works, which was found against
the Petitioners. Against these observations, the Petitioners have now
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Signed By:HARIOM
SINGH KIRMOLIYA
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approached this Court under Section 34 of the Act, praying that the
Impugned Award be set aside.
5. Learned Counsel for the Petitioner has submitted as under:
i. The limitation calculated by the Arbitral Tribunal is erroneous, as
the CIRP proceedings initiated against the Respondent do not
debar it from claiming compensation/money due from the
Petitioners during the proceedings under IBC. Rather, the
pendency of proceedings entitled the Respondent to recover
whatever money due and payable by the Petitioners, keeping in
mind the purpose of IBC being that to sustain a company.
ii. The Arbitral Tribunal erred in holding that the contract period was
extended up to 31.12.2022, as in the last meeting between the
parties, it was decided that the EOT can only be granted till
31.05.2022.
iii. The Arbitral Tribunal‟s observation that foreclosure of the
Contract on 31.05.2022 was illegal, is an erroneous one, as the
Sub-Contractor had abandoned the Project Site on 19.04.2022 and
thereafter, both the Respondent and Sub-Contractor requested for
closure of the Contract, expressing their inability to proceed with
the works.
iv. While adjudication of Claim No. 1, the Arbitral Tribunal
wrongfully held the imposition of LD by the Petitioners was
illegal. On this issue, it is submitted that on various occasions, the
Respondent had admitted to abandoning the Project Site and
stopping the works. Moreover, the Petitioners had to face
consequences of the shoddy work executed by the Respondent, as
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Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:02.07.2026
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well as infractions such as non-payment of wages, fines for illegal
mining, etc., which ultimately led to the delay in execution of the
Project. Because the Arbitral Tribunal overlooked these aspects
which were produced by the Petitioners in the form of evidence,
allowing of Claim No. 1 suffers from illegality, having not
appreciated the relevant evidence.
v. Allowing of Claim No. 2 by the Arbitral Tribunal was also
erroneous, as no proof of expenses/losses having incurred on
account of overheads and establishment charges in the extended
period was provided by the Respondent. As such, the Impugned
Award is in violation of the judgment of the Apex Court in
Battliboi Environmental Engineers v. HPCL, 2023 SCC OnLine
SC 1208 , which lays down a much more stringent criteria for
determination of quantum of damages for overheads and loss of
profit.
vi. Pertinently, while allowing Claim No. 2, the Arbitral Tribunal
overlooked a Letter dated 02.05.2018, in which the Respondent
had requested extension of time up to 31.03.2019, without
imposition of any penalty or compensation by either party. In this
regard, the Impugned Award is in violation of the observations of
the Apex Court in M/s C.C. Constructions v. Ircon
International, 2025 INSC 138, holding that when extensions are
accepted by contractors under a clause which debars
compensation, act as an estoppel against the contractor from
claiming the same compensation in arbitral proceedings.
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Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:02.07.2026
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vii. It is submitted that allowing Claim No. 4 towards losses on
account of bank guarantee commissions and extension of bank
guarantee by the Arbitral Tribunal resulted in unjust enrichment of
the Respondent, for the reason that this claim was interlinked with
Claim No. 2 and once Claim No. 2 was allowed, Claim No. 4
became redundant. In this regard, reliance is placed on the
MORT&H Data Book, according to which bank charges include
overheads and as such, Claim No. 2 was subsumed within Claim
No. 4.
viii. The Arbitral Tribunal committed a gross error in allowing the
amount under Claim No. 6 to the Respondent, as in doing so, it
ignored Technical Specification Clause 3001 and Clause 1.1.5.9 of
the Contract, which clearly provide that routine maintenance of
roads was an obligation of the Respondent, to be done at its own
cost during the construction period. Rather, the Arbitral Tribunal
further overlooked that the Respondent failed to duly maintain the
roads, giving rise to public disturbances as well as legal disputes.
ix. It is submitted that since Claims 1, 2, 3, 4 and 6 were erroneously
allowed, grant of any amounts by the Arbitral Tribunal under
Claim No. 7 towards Goods and Services Tax [“ GST ”], under
Claim No. 8 towards interest and under Claim No. 9 towards cost
of arbitration cannot be sustained.
6. Per contra, learned Counsel for the Respondent, while supporting the
observations of the Arbitral Tribunal, submits that it is only after duly
considering all the evidence produced by the parties in light of the
provisions of the Contract that the claims were allowed in favor of the
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Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:02.07.2026
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Respondent. As such, he states that all the grounds now raised by the
Petitioners require re-appreciation of evidence by this Court and examining
whether the interpretation of the contractual provisions by the Arbitral
Tribunal was correct or not, an exercise which is impermissible under
Section 34 of the Act.
7. This Court has heard the arguments advanced on behalf of the parties
and perused the material on record.
8. Before dealing with the rival contentions, this Court shall remind
itself of the contours within which the instant Petition under Section 34 of
the Act shall be adjudicated upon.
9. This Court recalls the following observations of the Apex Court in
OPG Power Generation (P) Ltd. v. Enexio PowerCooling Solutions (India)
(P) Ltd., (2025) 2 SCC 417:
“ Relevant legal principles governing a challenge to
an arbitral award
30. Before we delve into the issue/sub-issues culled out
above, it would be useful to have a look at the relevant
legal principles governing a challenge to an arbitral
award. Recourse to a court against an arbitral award
may be made through an application for setting aside
such award in accordance with sub-sections (2), (2-A)
and (3) of Section 34 of the 1996 Act. Sub-section (2)
of Section 34 has two clauses, (a) and (b). Clause (a)
has five sub-clauses which are not relevant to the
issues raised before us. Insofar as clause (b) is
concerned, it has two sub-clauses, namely, (i) and (ii).
Sub-clause (i) of clause (b) is not relevant to the
controversy in hand. Sub-clause (ii) of clause (b)
provides that if the Court finds that the arbitral award
is in conflict with the public policy of India, it may set
aside the award.
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Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:02.07.2026
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Public policy
31. ―Public policy‖ is a concept not statutorily
defined, though it has been used in statutes, rules,
notification, etc. since long, and is also a part of
common law. Section 23 of the Contract Act, 1872 uses
the expression by stating that the consideration or
object of an agreement is lawful, unless, inter alia,
opposed to public policy. That is, a contract which is
opposed to public policy is void.
xxx
35 . In Renusagar Power Co. Ltd. v. General Electric
Co., a three-Judge Bench of this Court observed that
the doctrine of public policy is somewhat open—
textured and flexible. By citing earlier decisions, it was
observed that there are two conflicting positions which
are referred to as the ―narrow view‖ and the ―broad
view‖. According to the narrow view, courts cannot
create new heads of public policy whereas the broad
view countenances judicial law making in these areas.
In the field of private international law, it was pointed
out, courts refuse to apply a rule of foreign law or
recognise a foreign judgment or a foreign arbitral
award if it is found that the same is contrary to the
public policy of the country in which it is sought to be
invoked or enforced. However, it was clarified, a
distinction is to be drawn while applying the rule of
public policy between a matter governed by domestic
law and a matter involving conflict of laws. It was
observed that the application of the doctrine of public
policy in the field of conflict of laws is more limited
than that in the domestic law and the courts are slower
to invoke public policy in cases involving a foreign
element than when a purely municipal legal issue is
involved. It was held that contravention of law alone
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SINGH KIRMOLIYA
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will not attract the bar of public policy, and something
more than contravention of law is required.
xxx
37. What is clear from above is that for an award to be
against public policy of India a mere infraction of the
municipal laws of India is not enough. There must be,
inter alia, infraction of fundamental policy of Indian
law including a law meant to serve public interest or
public good.
xxx
40. In ONGC Ltd. v. Western Geco International Ltd.,
which also related to the period prior to the 2015
Amendment of Section 34(2)(b)(ii), a three-Judge
Bench of this Court, after considering the decision in
Saw Pipes, without exhaustively enumerating the
purport of the expression ―fundamental policy of
Indian law‖, observed that it would include all such
fundamental principles as providing a basis for
administration of justice and enforcement of law in this
country. The Court thereafter illustratively referred to
three fundamental juristic principles, namely:
(a) that in every determination that affects the rights of
a citizen or leads to any civil consequences, the court
or authority or quasi-judicial body must adopt a
judicial approach, that is, it must act bona fide and
deal with the subject in a fair, reasonable and objective
manner and not actuated by any extraneous
consideration;
(b) that while determining the rights and obligations of
parties the court or Tribunal or authority must act in
accordance with the principles of natural justice and
must apply its mind to the attendant facts and
circumstances while taking a view one way or the
other; and
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(c) that its decision must not be perverse or so
irrational that no reasonable person would have
arrived at the same.
41. In Associate Builders, a two-Judge Bench of this
Court, held] that audi alteram partem principle is
undoubtedly a fundamental juristic principle in Indian
law and is enshrined in Sections 18 and 34(2)(a)(iii) of
the 1996 Act. In addition to the earlier recognised
principles forming fundamental policy of Indian law, it
was held that disregarding:
(a) orders of superior courts in India; and
(b) the binding effect of the judgment of a superior
court would also be regarded as being contrary to
the fundamental policy of Indian law.
Further, elaborating upon the third juristic principle
(i.e., qua perversity), as laid down in Western Geco,
it was observed that where:
(i) a finding is based on no evidence; or
(ii) an Arbitral Tribunal takes into account
something irrelevant to the decision which it arrives
at; or
(iii) ignores vital evidence in arriving at its decision,
such decision would necessarily be perverse.
To this a caveat was added by observing that when a
court applies the ―public policy test‖ to an arbitration
award, it does not act as a court of appeal and,
consequently, errors of fact cannot be corrected; and a
possible view by the arbitrator on facts has necessarily
to pass muster as the arbitrator is the ultimate master
of the quantity and quality of evidence to be relied
upon when he delivers his arbitral award. It was also
observed that an award based on little evidence or on
evidence which does not measure up in quality to a
trained legal mind would not be held to be invalid on
that score. Thus, once it is found that the arbitrator's
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approach is not arbitrary or capricious, it is to be
taken as the last word on facts.
The 2015 Amendment in Sections 34 and 48
42. The aforementioned judicial pronouncements were
all prior to the 2015 Amendment. Notably, prior to the
2015 Amendment the expression ―in contravention
with the fundamental policy of Indian law‖ was not
used by the legislature in either Section 34(2)(b)(ii) or
Section 48(2)(b). The pre-amended Section 34(2)(b)(ii)
and its Explanation read:
―34. Application for setting aside arbitral award.—(1)
*
(2) An arbitral award may be set aside by the court
only if—
*
(b) the court finds that—
*
(ii) the arbitral award is in conflict with the public
policy of India.
Explanation.—Without prejudice to the generality of
sub-clause (ii), it is hereby declared, for the avoidance
of any doubt, that an award is in conflict with the
public policy of India if the making of the award was
induced or affected by fraud or corruption or was in
violation of Section 75 or Section 81.‖
xxx
44. By the 2015 Amendment, in place of the old
Explanation to Section 34(2)(b)(ii), Explanations 1 and
2 were added to remove any doubt as to when an
arbitral award is in conflict with the public policy of
India.
45. At this stage, it would be pertinent to note that we
are dealing with a case where the application under
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Section 34 of the 1996 Act was filed after the 2015
Amendment, therefore the newly substituted/added
Explanations would apply.
46. The 2015 Amendment adds two Explanations to
each of the two sections, namely, Section 34(2)(b)(ii)
and Section 48(2)(b), in place of the earlier
Explanation. The significance of the newly inserted
Explanation 1 in both the sections is two-fold. First, it
does away with the use of words : (a) ―without
prejudice to the generality of sub-clause (ii)‖ in the
opening part of the pre-amended Explanation to
Section 34(2)(b)(ii); and (b) ―without prejudice to the
generality of clause (b) of this section‖ in the opening
part of the pre-amended Explanation to Section
48(2)(b); secondly, it limits the expanse of public
policy of India to the three specified categories by
using the words ―only if‖. Whereas, Explanation 2 lays
down the standard for adjudging whether there is a
contravention with the fundamental policy of Indian
law by providing that a review on merits of the dispute
shall not be done. This limits the scope of the enquiry
on an application under either Section 34(2)(b)(ii) or
Section 48(2)(b) of the 1996 Act.
47. The 2015 Amendment by inserting sub-section (2-
A) in Section 34, carves out an additional ground for
annulment of an arbitral award arising out of
arbitrations other than international commercial
arbitrations. Sub-section (2-A) provides that the Court
may also set aside an award if that is vitiated by patent
illegality appearing on the face of the award. This
power of the Court is, however, circumscribed by the
proviso, which states that an award shall not be set
aside merely on the ground of an erroneous application
of the law or by reappreciation of evidence.
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48 .Explanation 1 to Section 34(2)(b)(ii), specifies that
an arbitral award is in conflict with the public policy of
India, only if:
(i) the making of the award was induced or affected by
fraud or corruption or was in violation of Section 75 or
Section 81; or
(ii) it is in contravention with the fundamental policy of
Indian law; or
(iii) it is in conflict with the most basic notions of
morality or justice.
49. In the instant case, there is no allegation that the
making of the award was induced or affected by fraud
or corruption, or was in violation of Section 75 or
Section 81. Therefore, we shall confine our exercise in
assessing as to whether the arbitral award is in
contravention with the fundamental policy of Indian
law, and/or whether it conflicts with the most basic
notions of morality or justice. Additionally, in the light
of the provisions of sub-section (2-A) of Section 34, we
shall examine whether there is any patent illegality on
the face of the award.
50. Before undertaking the aforesaid exercise, it would
be apposite to consider as to how the expressions:
(a) ―in contravention with the fundamental policy of
Indian law‖;
(b) ―in conflict with the most basic notions of morality
or justice‖; and
(c) ―patent illegality‖ have been construed.
In contravention with the fundamental policy of
Indian law
51. As discussed above, till the 2015 Amendment the
expression ―in contravention with the fundamental
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policy of Indian law‖ was not found in the 1996 Act.
Yet, in Renusagar, in the context of enforcement of a
foreign award, while construing the phrase ―contrary
to the public policy‖, this Court held that for a foreign
award to be contrary to public policy mere
contravention of law would not be enough rather it
should be contrary to:
(a) the fundamental policy of Indian law; and/or
(b) the interest of India; and/or
(c) justice or morality.
xxx
55. The legal position which emerges from the
aforesaid discussion is that after ―the 2015
Amendments‖ in Section 34(2)(b)(ii) and Section
48(2)(b) of the 1996 Act, the phrase ―in conflict with
the public policy of India‖ must be accorded a
restricted meaning in terms of Explanation 1. The
expression ―in contravention with the fundamental
policy of Indian law‖ by use of the word
―fundamental‖ before the phrase ―policy of Indian
law‖ makes the expression narrower in its application
than the phrase ―in contravention with the policy of
Indian law‖, which means mere contravention of law is
not enough to make an award vulnerable. To bring the
contravention within the fold of fundamental policy of
Indian law, the award must contravene all or any of
such fundamental principles that provide a basis for
administration of justice and enforcement of law in this
country.
56. Without intending to exhaustively enumerate
instances of such contravention, by way of illustration,
it could be said that:
(a) violation of the principles of natural justice;
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(b) disregarding orders of superior courts in India or
the binding effect of the judgment of a superior court;
and
(c) violating law of India linked to public good or
public interest, are considered contravention of the
fundamental policy of Indian law.
However, while assessing whether there has been a
contravention of the fundamental policy of Indian law,
the extent of judicial scrutiny must not exceed the limit
as set out in Explanation 2 to Section 34(2)(b)(ii).
xxx
Patent illegality
65 . Sub-section (2-A) of Section 34 of the 1996 Act,
which was inserted by the 2015 Amendment, provides
that an arbitral award not arising out of international
commercial arbitrations, may also be set aside by the
Court, if the Court finds that the award is visited by
patent illegality appearing on the face of the award.
The proviso to sub-section (2-A) states that an award
shall not be set aside merely on the ground of an
erroneous application of the law or by reappreciation
of evidence.
66. In Saw Pipes, while dealing with the phrase
―public policy of India‖ as used in Section 34, this
Court took the view that the concept of public policy
connotes some matter which concerns public good and
public interest. If the award, on the face of it, patently
violates statutory provisions, it cannot be said to be in
public interest. Thus, an award could also be set aside
if it is patently illegal. It was, however, clarified that
illegality must go to the root of the matter and if the
illegality is of trivial nature, it cannot be held that
award is against public policy.
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67. In Associate, this Court held that an award would
be patently illegal, if it is contrary to:
(a) substantive provisions of law of India;
(b) provisions of the 1996 Act; and
(c) terms of the contract [See also three-Judge Bench
decision of this Court in State of Chhattisgarh v. SAL
Udyog (P) Ltd., (2022) 2 SCC 275 : (2022) 2 SCC
(Civ) 776] .
The Court clarified that if an award is contrary to the
substantive provisions of law of India, in effect, it is in
contravention of Section 28(1)(a) of the 1996 Act.
Similarly, violating terms of the contract, in effect, is in
contravention of Section 28(3) of the 1996 Act.
68. In SsangyongEngg. & Construction Co. Ltd. v.
NHAI, (2019) 15 SCC 131 this Court specifically dealt
with the 2015 Amendment which inserted sub-section
(2-A) in Section 34 of the 1996 Act. It was held that
―patent illegality appearing on the face of the award‖
refers to such illegality as goes to the root of matter,
but which does not amount to mere erroneous
application of law. It was also clarified that what is not
subsumed within ―the fundamental policy of Indian
law‖, namely, the contravention of a statute not linked
to ―public policy‖ or ―public interest‖, cannot be
brought in by the backdoor when it comes to setting
aside an award on the ground of patent illegality [See
SsangyongEngg. case, (2019) 15 SCC 131]. Further, it
was observed, reappreciation of evidence is not
permissible under this category of challenge to an
arbitral award [See SsangyongEngg. case, (2019) 15
SCC 131].
Perversity as a ground of challenge
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69. Perversity as a ground for setting aside an arbitral
award was recognised in ONGC Ltd. v. Western Geco
International Ltd., (2014) 9 SCC 263. Therein it was
observed that an arbitral decision must not be perverse
or so irrational that no reasonable person would have
arrived at the same. It was observed that if an award is
perverse, it would be against the public policy of India.
70. In Associate Builders v. DDA, (2015) 3 SCC 49
certain tests were laid down to determine whether a
decision of an Arbitral Tribunal could be considered
perverse. In this context, it was observed that where:
(i) a finding is based on no evidence; or
(ii) an Arbitral Tribunal takes into account something
irrelevant to the decision which it arrives at; or
(iii) ignores vital evidence in arriving at its decision,
such decision would necessarily be perverse.
However, by way of a note of caution, it was observed
that when a court applies these tests it does not act as
a court of appeal and, consequently, errors of fact
cannot be corrected. Though, a possible view by the
arbitrator on facts has necessarily to pass muster as
the arbitrator is the ultimate master of the quantity and
quality of evidence to be relied upon. It was also
observed that an award based on little evidence or on
evidence which does not measure up in quality to a
trained legal mind would not be held to be invalid on
that score.
71. In SsangyongEngg. & Construction Co. Ltd. v.
NHAI, (2019) 15 SCC 131, which dealt with the legal
position post the 2015 Amendment in Section 34 of the
1996 Act, it was observed that a decision which is
perverse, while no longer being a ground for challenge
under ―public policy of India‖, would certainly
amount to a patent illegality appearing on the face of
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the award. It was pointed out that an award based on
no evidence, or which ignores vital evidence, would be
perverse and thus patently illegal. It was also observed
that a finding based on documents taken behind the
back of the parties by the arbitrator would also qualify
as a decision based on no evidence inasmuch as such
decision is not based on evidence led by the parties,
and therefore, would also have to be characterised as
perverse [See SsangyongEngg. case, (2019) 15 SCC
131, para 41].
72. The tests laid down in Associate Builders v. DDA,
(2015) 3 SCC 49 to determine perversity were followed
in SsangyongEngg. & Construction Co. Ltd. v. NHAI,
(2019) 15 SCC and later approved by a three-Judge
Bench of this Court in Patel Engg. Ltd. v. North
Eastern Electric Power Corpn. Ltd., (2020) 7 SCC
167.
73. In a recent three-Judge Bench decision of this
Court in DMRC Ltd. v. Delhi Airport Metro Express
(P) Ltd., (2024) 6 SCC 357, the ground of patent
illegality/perversity was delineated in the following
terms: (SCC p. 376, para 39)
―39. In essence, the ground of patent illegality is
available for setting aside a domestic award, if the
decision of the arbitrator is found to be perverse, or
so irrational that no reasonable person would have
arrived at it; or the construction of the contract is
such that no fair or reasonable person would take;
or, that the view of the arbitrator is not even a
possible view. A finding based on no evidence at all
or an award which ignores vital evidence in arriving
at its decision would be perverse and liable to be set
aside under the head of ―patent illegality‖. An
award without reasons would suffer from patent
illegality. The arbitrator commits a patent illegality
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by deciding a matter not within its jurisdiction or
violating a fundamental principle of natural
justice.‖
Scope of interference with an arbitral award
74. The aforesaid judicial precedents make it clear that
while exercising power under Section 34 of the 1996
Act the Court does not sit in appeal over the arbitral
award. Interference with an arbitral award is only on
limited grounds as set out in Section 34 of the 1996
Act. A possible view by the arbitrator on facts is to be
respected as the arbitrator is the ultimate master of the
quantity and quality of evidence to be relied upon. It is
only when an arbitral award could be categorised as
perverse, that on an error of fact an arbitral award
may be set aside. Further, a mere erroneous
application of the law or wrong appreciation of
evidence by itself is not a ground to set aside an award
as is clear from the provisions of sub-section (2-A) of
Section 34 of the 1996 Act.
75. In Dyna Technologies (P) Ltd. v. Crompton Greaves
Ltd., (2019) 20 SCC 1, a three-Judge Bench of this
Court held that courts need to be cognizant of the fact
that arbitral awards are not to be interfered with in a
casual and cavalier manner, unless the court concludes
that the perversity of the award goes to the root of the
matter and there is no possibility of an alternative
interpretation that may sustain the arbitral award. It
was observed that jurisdiction under Section 34 cannot
be equated with the normal appellate jurisdiction.
Rather, the approach ought to be to respect the finality
of the arbitral award as well as party's autonomy to get
their dispute adjudicated by an alternative forum as
provided under the law.
xxx
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Scope of interference with the
interpretation/construction of a contract accorded in
an arbitral award
84. An Arbitral Tribunal must decide in accordance
with the terms of the contract. In a case where an
Arbitral Tribunal passes an award against the terms of
the contract, the award would be patently illegal.
However, an Arbitral Tribunal has jurisdiction to
interpret a contract having regard to terms and
conditions of the contract, conduct of the parties
including correspondences exchanged, circumstances
of the case and pleadings of the parties. If the
conclusion of the arbitrator is based on a possible view
of the matter, the Court should not interfere [See: SAIL
v. Gupta Brother Steel Tubes Ltd., (2009) 10 SCC 63;
Pure Helium India (P) Ltd. v. ONGC, (2003) 8 SCC
593; McDermott International Inc. v. Burn Standard
Co. Ltd., (2006) 11 SCC 181; MMTC Ltd. v. Vedanta
Ltd., (2019) 4 SCC. But where, on a full reading of the
contract, the view of the Arbitral Tribunal on the terms
of a contract is not a possible view, the award would be
considered perverse and as such amenable to
interference [South East Asia Marine Engg. &
Constructions Ltd. v. Oil India Ltd., (2020) 5 SCC 1].
Whether unexpressed term can be read into a
contract as an implied condition
85. Ordinarily, terms of the contract are to be
understood in the way the parties wanted and intended
them to be. In agreements of arbitration, where party
autonomy is the grund norm, how the parties worked
out the agreement, is one of the indicators to decipher
the intention, apart from the plain or grammatical
meaning of the expressions used [Balco v. Kaiser
Aluminium Technical Services Inc., (2016) 4 SCC 126].
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86. However, reading an unexpressed term in an
agreement would be justified on the basis that such a
term was always and obviously intended by the parties
thereto. An unexpressed term can be implied if, and
only if, the court finds that the parties must have
intended that term to form part of their contract. It is
not enough for the court to find that such a term would
have been adopted by the parties as reasonable men if
it had been suggested to them. Rather, it must have
been a term that went without saying, a term necessary
to give business efficacy to the contract, a term which,
although tacit, forms part of the contract [Adani Power
(Mundra) Ltd. v. Gujarat ERC, (2019) 19 SCC 9].
87. But before an implied condition, not expressly
found in the contract, is read into a contract, by
invoking the business efficacy doctrine, it must satisfy
the following five conditions:
(a) it must be reasonable and equitable;
(b) it must be necessary to give business efficacy to the
contract, that is, a term will not be implied if the
contract is effective without it;
(c) it must be obvious that ―it goes without saying‖;
(d) it must be capable of clear expression;
(e) it must not contradict any terms of the contract
[Nabha Power Ltd. v. Punjab SPCL, (2018) 11 SCC
508, followed in Adani Power case, (2019) 19 SCC].‖
10. The grounds raised by the Petitioners herein revolve primarily around
the Arbitral Tribunal‟s adjudication of the issue of delay in execution of the
Project and the ultimate attributability of such delay to the Petitioners. The
other grievances of the Petitioners flowing from this primary issue, are that
the Arbitral Tribunal erred in holding the imposition of LD on the
Respondent and foreclosure of the Contract as illegal.
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11. A reading of the Impugned Award indicates that before dealing with
the individual claims and counter-claims of the contesing parties, the
Arbitral Tribunal undertook to make preliminary observations on the issue
of delay and imposition of LD, for which purpose, the Arbitral Tribunal
divided the entire contract period, including the EOTs, into two categories:
a) Period from 13.06.2014 to 15.06.2018, i.e., till the execution of the
Tripartite Agreement (covering the extended period from
12.06.2016 to 15.06.2018); and
b) Extended period from 15.06.2018 to 31.05.2022, i.e., the date on
which the Contracted was foreclosed by the Employer/MORT&H.
12. A further perusal of the Impugned Award shows that the first
document taken into consideration by the Arbitral Tribunal was a Letter
dated 14.05.2016 sent by the Respondent, seeking an extension of time by
441 days till 26.08.2017, for completion of the works. It is noted by the
Arbitral Tribunal that the said Letter was accompanied with an annexure that
set out the reasons for the Respondent‟s request for such extension. In the
interest of comprehensiveness, this Court deems it fit to extract Annexure to
the Letter dated 14.05.2016, which influenced the Arbitral Tribunal‟s
conclusion. Annexure to the Letter dated 14.05.2016 is extracted below:
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13. Upon a perusal of the Letter dated 14.05.2016 as well as the
accompanying annexure, the Arbitral Tribunal noted that the contents of the
correspondence highlighted delays, which were fundamental and governing
in nature and unless addressed, would hamper the progress of works at the
Project Site. For instance, the Arbitral Tribunal noted that the discrepancies
in the TBM values, of which responsibility was cast on the
Employer/MORT&H as per Clause 4.7 of the Contract, affected the Project
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significantly and the resulting delay in resolution thereof was thus,
completely attributable to the Petitioners. In this context, this Court shall
make a quick perusal of the relevant portions of the Letter dated 14.05.2016,
as extracted in the Impugned Award:
14. A prima facie examination of the above portion of the Letter dated
14.05.2016 and the resulting conclusion of the Arbitral Tribunal do not
warrant any interference by this Court, as it is evident that the Arbitral
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Tribunal came to the conclusion after considering the correspondence as
well as the relevant clause of the Contract, which made it clear that the
responsibility was cast on the Employer/MORT&H for the errors in the
specified or notified items of reference. The Arbitral Tribunal was indeed
correct in not attributing the delay in this aspect to the Respondent, as it was
only responsible for „using reasonable efforts to verify the accuracy of the
specified or notified items of reference, after the Employer/MORT&H
discharges the duty cast on it. This observation also assumes significance for
the reason that this delay in resolution of discrepancy occurred before the
works even commenced, and as such, the progress was derailed from the
very beginning, responsibility of which has rightly been accrued to the
Employer/MORT&H.
15. On this very issue of delay, the Respondent also claimed that there
was substantial delay on part of the Employer/MORT&H in handing over of
encumbrance free land to enable commencement of works at the Project
Site. Material on record indicates that this handing-over was to be carried
out in a three-phase manner, first of which was to be done on the date of
commencement, i.e., on 13.06.2014. To examine this issue, the Arbitral
Tribunal noted the Respondent‟s Letter dated 05.07.2014, in conjunction
with the Engineer‟s Letter dated 30.07.2014, which painted a picture
showing clearly that the Project Site was not encumbrance-free even on
28.07.2014, i.e., more than a month after the date of commencement, a fact
which was first highlighted by the Respondent on 05.07.2014, noted by the
parties in a joint inspection of the Project Site on 28.07.2014 and admitted
by the Engineer on 30.07.2014. As such, the straightforward and obvious
conclusion of the Arbitral Tribunal that the Employer/MORT&H was
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responsible for the delay in handing over of an encumbrance-free site, does
not warrant interference by this Court.
16. A further reading of the Impugned Award highlights the actions taken
by the Engineer, who was authorized to decide of EOT requests as per
Clause 3.5 of the Contract read with Clause 20.1 of the General Conditions
of Contract [“ GCC ”]. The Arbitral Tribunal noted that after the
Respondent‟s request for extension of time vide the Letter dated 14.05.2016,
the Engineer ultimately came to grant such extension after a lapse of almost
three (3) months, only on 24.08.2016. More pertinently, the Arbitral Tribunal
noted that in this Letter dated 24.08.2016, the Engineer observed that each
of the causes of delay were beyond the Respondent‟s control. Despite of
this, the Employer/MORT&H only granted provisional EOTs in a phased
manner, sans any reference to the assessment of the Engineer of the site
conditions – especially when there is no clause for granting a provisional
EOT in the Contract. As such, the Arbitral Tribunal‟s conclusion that the
EOT provisions were rendered inoperative by the Employer/MORT&H, in
the opinion of this Court, appears to be a fair and reasonable one.
17. In conjunction with the above finding, the Arbitral Tribunal also
found that the continuous grant of EOT till 31.03.2022, disentitled the
Employer/MORT&H from imposing LD thereafter. To arrive at this
conclusion, the Arbitral Tribunal noted that even after the Respondent
expressed difficulty in continuing the works especially since it was
undergoing liquidation in the prevailing COVID-19 restrictions, the
Employer/MORT&H directed the Respondent to continue working, only to
foreclose the Contract on 31.05.2022. This direction was given by the
Employer/MORT&H despite the execution of the Tripartite Agreement on
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15.06.2018 and the Respondent‟s proposal to allow the sub-contractor to
complete the Project and more importantly, even after the
Employer/MORT&H issued a notice of termination on 18.01.2021, which
was eventually not pressed.
18. Ultimately, Arbitral Tribunal also noted that after the foreclosure of
the Contract on 31.05.2022, the Employer/MORT&H released the payment
of Rs. 4,09,77,068/- against the final bill submitted by the Sub-Contractor
on 03.06.2022 and released the bank guarantee submitted by the Sub-
Contractor. No responsibility of the Respondent was mentioned by the
Employer/MORT&H till this date. Only thereafter on 30.06.2022 did the
Employer/MORT&H impose on the Respondent, which the Arbitral Tribunal
held to be illegal, considering all the previous factual background.
19. Apart from noting the correspondences and the relevant contractual
provisions, the Arbitral Tribunal was also guided by the following
observations of a Coordinate Bench of this Court in NDMC v. IJM Corpn.,
2022 SCC OnLine Del 1208 :
“ 20. In the present case, requests for the extension
were made and granted, though petitioner reserved
their right to levy to recover liquidated damages in
accordance with provisions of Clause 2 of the
agreement.
21. The contention of learned Senior Counsel for the
petitioner that the extensions were only provisional and
Petitioner could reassess the delay is not sustainable.
22. Once a request is received and extension of time is
granted, the engineer in charge/the competent
authority cannot after the extended period is over turn
around and reassess the extension to the detriment of
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the contractor. If extension is granted, say for a period
of three months, the engineer in charge after expiry of
three months cannot turn around and say that the
extension should have, in fact, been for a period of two
months.
23. Though it may be open to the competent
authority/engineer in-charge to, in the first instance,
grant an extension for a shorter period than requested
and thereafter extend it further but he cannot having
once granted it, curtail it retrospectively.
24. Clause 5.4 stipulates that the decision on the
extension of time has to be communicated within a
period of three months, which presupposes that an
estimation or calculation would have to be made by the
competent authority within the period of three months
and a conscious decision taken and communicated. The
competent authority cannot mechanically grant an
extension in the first instance and then after the period
is over, reduce the same retrospectively. ”
20. In the opinion of this Court, the Arbitral Tribunal arrived at an
obvious conclusion, which is incidentally also in line with Section 55 of the
Indian Contracts Act, 1872, which when applied to the facts of the present
case, would rightly bar the Employer/MORT&H from claiming any
compensation or damages from the Respondent after accepting the delayed
performance of the Sub-Contractor.
21. The last preliminary issue dealt with by the Arbitral Tribunal was that
of limitation, wherein the Employer/MORT&H contended that Claims No. 2
to 7 of the Respondent were beyond limitation in view of the Respondent
claiming interest from 15.06.2018 till the date of filing of the Statement of
Claims on 07.05.2024. The Respondent‟s stand on this was that the
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limitation period could not have begun till the final bill was processed and it
was made aware of its entitlement, placing reliance on Clauses 14.11 and
14.14 of the Contract. The Respondent also submitted before the Arbitral
Tribunal that the invocation of arbitration was done by it on 18.03.2023,
which was within three (3) years from the date of acknowledgement of
closure and non-finalization of the final bill by the Employer/MORT&H.
22. Considering the above submissions of the parties on the issue of
limitation, the Arbitral Tribunal gave its findings against the Petitioners,
observing that since the premature closure of Contract from 31.05.2022 was
communicated to the Respondent only on 12.08.2022, the commencement of
arbitral proceedings on 18.03.2023 was well within limitation.
23. On the above issue of limitation, the Arbitral tribunal also noted that
since the Respondent was admitted into CIRP on 15.10.2018 and the
Resolution Plan came to be approved on 20.07.2020. Subsequently, the
Arbitral Tribunal also took note of an Order dated 09.04.2021 passed by the
National Company Law Tribunal, Chennai, approving the Resolution Plan in
a revised format and directing the period of 19.07.2020 till 09.04.2021 to be
excluded from the timeline of implementing the Resolution Plan, meaning
thereby that the Resolution Plan got approved only on 09.04.2021. A natural
corollary of this, as correctly noted by the Arbitral Tribunal, comes from the
effect of Section 60(6) of the Insolvency and Bankruptcy Code, 2016, which
would exclude the period during which moratorium was in place for
computing the period of limitation for any suit or any application by or
against a Corporate Debtor. The Arbitral Tribunal also correctly applied the
judgment of the Apex Court in Cognizance for Extension of Limitation, In
re, (2022) 3 SCC 117 , by excluding the period till 28.02.2022 and opined
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that the Respondent was entitled to the balance period of limitation with
effect from 01.03.2022, more so in light of the fact that period for invoking
the arbitration clauses did not even commence on 15.03.2020, since the
Respondent was undergoing CIRP. Thus, the Arbitral Tribunal‟s conclusion
that the limitation period for invocation of arbitration in respect of Claims
No. 2 to 7 did not expire is a correct one, in the considered view of this
Court.
24. Lastly, before adjudicating upon the individual claims, the Arbitral
Tribunal also dismissed the contention of the Employer/MORT&H, that the
claims of the Respondent did not survive after the approval of Resolution
Plan on 09.04.2021. Relying on the judgment of the Apex Court in
Ghanshyam Mishra v. Edelweiss Asset Reconstruction Company Ltd.,
(2021) 9 SCC 957 , the Arbitral Tribunal concluded that since the
Employer/MORT&H failed to raise its claims against the Respondent before
the Resolution Professional, all the counter-claims now raised stand
extinguished. This observation also does not warrant any interference by this
Court, being based strictly on a settled position of law and in view of the
fact that there was evidence enough to show that the Employer/MORT&H
was aware of the CIRP proceedings ongoing against the Respondent.
25. Moving forward to Claim No. 1, under which the Respondent sought
refund of amounts towards encashed Performance Bank Guarantees against
the levy of LD by the Employer/MORT&H. The Arbitral Tribunal, relying
on its earlier observations of holding the Employer/MORT&H‟s decision of
imposing LD and subsequent encashment of BG as legally untenable and
against the principles of natural justice, allowed this Claim and granted an
amount of Rs. 21,23,26,922/- in favor of the Respondent. Since this Court,
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in the preceding paragraphs has already given its assent to the preliminary
observations of the Arbitral Tribunal, it finds no reason to interfere with the
findings on Claim No. 1.
26. Under Claim No. 2, the Respondent sought compensation for
additional expenses/losses incurred by it on account of overhead and
establishment cost incurred during the extended period up to 15.06.2018.
The Arbitral Tribunal observed that while any contractor accounts for
overhead costs and establishment chargers during the original contract
period, in the present case, the Respondent remained at the Project Site for
an additional period of 735 days due to the Employer/MORT&H‟s failure to
perform its reciprocal obligations in a timely manner. The Arbitral Tribunal
also took note of Clause 1.1.43 of the Contract, which defines „Cost‟, and
includes „overhead and similar charges‟ but excludes profits, read in
conjunction with Sections 73, 53, 54 and 55 of the Indian Contract Act,
1872. Most importantly, the Arbitral Tribunal also considered the MORT&H
Data Book Norms, which provide for complying 10% towards overhead
charges in a road construction contract. As such, the Arbitral Tribunal
viewed that since MORT&H was itself a party to the arbitral proceedings,
Claim No. 2 ought to be allowed to the extent of Rs. 13,52,83,930/- along
with interest, after subtracting those months in which the Respondent had
abandoned the Project Site and performed no work. In the opinion of this
Court, this conclusion appears to be a reasonable one, as again having been
based on the preliminary findings of the Arbitral Tribunal, with which this
Court agrees. As such, findings in the Impugned Award pertaining to Claim
No. 2 deserve to be upheld.
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27. Under Claim No. 3, the Respondent claimed for additional
expenses/losses incurred on account of hire charges/usage charges for plant
and machinery due to prolongation of the Contract. This Claim, again based
on the preliminary findings on delay being attributable to the
Employer/MORT&H and of these expenses being within the ambit of „cost‟
within Clause 1.1.43 of the Contract came to be allowed by the Arbitral
Tribunal to the extent of Rs. 6,76,41,953/- along with future interest. Again,
this Court finds no reason to interfere with this conclusion of the Arbitral
Tribunal, being a reasonable and plausible one based on the relevant clauses
of the Contract as well as the relevant correspondences exchanged between
the parties.
28. Claim No. 4 was towards cost incurred by the Respondent for keeping
the BG alive during the extended period of the Contract. Observing the
undisputed position that the Respondent had submitted 3 BGs, which were
kept alive beyond the stipulated date of completion of the Contract till their
invocation by the Employer/MORT&H, the Arbitral Tribunal awarded a sum
of Rs. 20,69,802/- along with interest to the Respondent, excluding any
amount for the period in which no works were executed by the Respondent
(i.e., from 01.02.2018 to 15.06.2018). This conclusion, being based on an
undisputed factual position arising from the material on record placed before
the Arbitral Tribunal, does not warrant any interference by this Court.
29. Since Claim No. 5 was rejected by the Arbitral Tribunal and as such
remains unchallenged by the Petitioners herein, this Court does not deem it
appropriate to delve into the findings of the Arbitral Tribunal on Claim No.
5.
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Signed By:HARIOM
SINGH KIRMOLIYA
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30. Moving ahead to Claim No. 6, under which the Respondent claimed
compensation for losses incurred on account of Routine Maintenance as per
Clause 1.1.5.9 of the Contract. The Arbitral Tribunal observed at the outset
that Employer/MORT&H did not dispute that the work of routine
maintenance was carried out by the Respondent. That being the position, the
Arbitral Tribunal concluded that merely because the same was an obligation
cast on the Respondent under Technical Specification Clause 3001 and
Clause 1.1.5.9 of the Contract, will not disentitle the Respondent from the
costs incurred in doing so during the extended periods. For this reason, the
Arbitral Tribunal awarded an amount of Rs. 4,41,73,321/- to the
Respondent, which again appears to be a reasonable finding, being based on
the admission of the Employer/MORT&H that maintenance work was
performed by the Respondent and on the preliminary observation of the
Arbitral Tribunal that the extension of period of the Contract was entirely
due to the Employer/MORT&H for causing delays and hindrances.
31. Under Claim No. 8, the Respondent had claimed payment of GST on
the awarded amounts due to the introduction of GST regime w.e.f.
01.07.2017. The Respondent‟s case before the Arbitral Tribunal was that this
claim has raised only because the Respondent was made to work beyond the
original date of completion, i.e., 11.06.2016 and as such, the Respondent
would be entitled to amounts in light of change in legislation, as per Clause
13.7 of the GCC. In the opinion of this Court, the Arbitral Tribunal has
correctly observed that the amounts payable to the Respondent would attract
GST liability, which was also attracted by the Respondent itself during the
extended period of contract. The Arbitral Tribunal has thus, rightly held the
Signature Not Verified
Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:02.07.2026
18:53:24
O.M.P. (COMM) 236/2026 Page 38 of 40
Petitioners liable for reimbursing the Respondent for the GST paid by the
Respondent on the amounts under the arbitration.
32. Naturally, since this Court has refused to interfere with any of the
findings of the Arbitral Tribunal, no interference is warranted to the award of
amounts by the Arbitral Tribunal under Claim No. 9.
33. A careful and comprehensive perusal of the Impugned Award
demonstrates that the Arbitral Tribunal has examined the pleadings,
documentary material, correspondence exchanged between the parties, and
the evidence led in support of their respective claims and assertions. The
Impugned Award reflects due consideration of the relevant facts and
surrounding circumstances germane to the disputes.
34. The Impugned Award reflects a plausible and reasoned interpretation
of the contract and an evaluation of evidence within the jurisdiction of the
Arbitral Tribunal. It is well settled that a court exercising limited supervisory
jurisdiction under Section 34 cannot re-appreciate evidence or substitute its
own interpretation of contractual clauses where the view taken by the
Arbitral Tribunal is a possible and reasonable one.
35. Viewed in its entirety, the Impugned Award reflects a reasoned and
structured adjudication of the disputes by the Arbitral Tribunal within the
confines of the contractual terms agreed upon by the parties, the material
placed on record, and the jurisdiction vested in the Arbitral Tribunal. The
Impugned Award demonstrates due application of mind to the pleadings,
evidence, and relevant contractual provisions.
36. In view of the foregoing discussion, this Court is of the considered
opinion that the Petitioners have failed to establish any ground under Section
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Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:02.07.2026
18:53:24
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34(2) or Section 34(2A) of the Act warranting interference with the
Impugned Award.
37. Accordingly, the present Petition, along with pending application(s),
if any, stands dismissed.
SUBRAMONIUM PRASAD, J
JULY 01, 2026
AP
Signature Not Verified
Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:02.07.2026
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