South Eastern Railway vs Sara International Pvt. Ltd.

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* IN THE HIGH COURT OF DELHI AT NEW DELHI

Judgment reserved on:13.02.2026
Judgment pronounced on: 01.07.2026

+ O.M.P. (COMM.) 62/2022 & I.A. 944/2022

SOUTH EASTERN RAILWAY ....Petitioner
Through: Mr. Saransh Kumar, Ms. Harshita
Kumar, Advs.

versus

SARA INTERNATIONAL PVT. LTD. ....Respondent
Through: Mr. Gaurav Pachnanda, Sr. Adv. Mr.
Gyanendra Kumar, Sr. Adv. with Ms.
Anuradha Mukherjee, Ms. Shreya Som,
Mr. Soumya Dasgupta, Mr. Shivam
Tiwari, Ms. Shreya Bansal, Advs.

CORAM:
HON'BLE MR. JUSTICE JASMEET SINGH

J U D G M E N T
1. This is a petition filed under Section 34 of the Arbitration and
Conciliation Act, 1996 (“1996 Act”) seeking to set aside the Arbitral
Award (“ Award ”) dated 09.06.2021 and Ratification Order dated
27.07.2021 passed by the Arbitral Tribunal (“AT”) in the matter titled
“ Sara International Pvt. Ltd. v. South Eastern Railways. ”
FACTUAL BACKGROUND
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2. The petitioner (respondent before the AT) is South Eastern Division of
Indian Railway.
3. The respondent (claimant before the AT) is a company registered under
the Companies Act, 1956 which is an Indian conglomerate and operates
globally across multiple sectors ranging from mining, bulk commodities,
textiles and investment etc.

4. The Central Government, through the Ministry of Railways in exercise of
powers conferred by Section 71 of the Railways Act, 1989, promulgated
Wagon Investment Scheme (“ WIS ”) in the year 2005 pursuant to the
railway budget of 2005-2006 and the policy of Central Government with
respect to promotion of public private partnership. The scheme was
introduced to further various objectives including enhancing the capacity
of railway transport. The petitioner is the nodal agency implementing the
scheme in the respective zone.
5. Pursuant to the implementation of schemes, the parties entered into a WIS
Agreement dated 26.12.2006 which was subsequently modified by
Supplementary Agreement I dated 28.11.2013 and Supplementary
Agreement II dated 31.07.2015. In terms of the said WIS Agreement, the
respondent purchased two rakes for a total consideration of Rs.
28,33,66,686/- to be utilized by the petitioner in a common pool of
wagons. As per the Agreement, the petitioner had an obligation to
provide uninterrupted supply of six rakes every month to the respondent
for a period of 10 years and the respondent was entitled to a 10% freight
rebate. After the expiry of 10 years, the ownership of the rakes supplied
by the respondent would transfer to the petitioner.
6. The respondent delivered one rake on 20.12.2006 and the second rake on
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21.01.2007. The rakes were made commercially operational on
20.12.2006 and 13.02.2007 respectively.
7. It is the case of the petitioner that the respondent commenced operation
for transport of its own goods as well as the goods owned by its
customers/third parties in terms of the WIS Agreement, which was
impermissible. Subsequently, the Circulars dated 27.03.2010, 01.04.2010,
17.04.2010 and 03.02.2011 (“ Circulars ”) were issued by the petitioner
which were binding upon the parties to the WIS Agreement and were
clarificatory in nature. In terms of the above circulars, for registering
indent with the railway for supply of rakes, it became mandatory to
submit the forwarding note by the consignor of the iron ore duly issued
by the authorised officer of mining department of the state government of
Orissa. The petitioner also states that the inclusion of the alternate loading
stations was maintained due to an oversight and inadvertent error of
interpretation.
8. It is the respondent’s case that at the time WIS was introduced, the
respondent regularly traded in variety of ores. After the said Agreement
was signed, the respondent in December 2006, commenced operations for
transport of its own goods as well as goods owned by its customers and
third parties in terms of contractually agreed upon rebate rates. Post
March 2010, the petitioner started disallowing the registration of indents
on behalf of third parties and unilaterally altered the terms of the WIS
Agreement. Circulars were issued by the petitioner mandating the
submission of forwarding note, placing the indents at monthly intervals,
cumbersome process for transportation of goods belonging to third party
owners which was practically impossible for the respondent to do for
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each indent. The respondent was constrained to file a petition before the
High Court of Orissa wherein vide order dated 11.08.2010, the
respondent was allowed to transport the third party goods subject to the
permits given by the authorities. Even after communicating the Orders of
the High Court, the petitioner continued to wilfully flout the said order
and refused to accept the indent of third party owners.

9. Further, the respondent was not permitted to use the alternate stations
allotted to it under the WIS Agreement. The respondent through
Supplementary Agreement I and II also included several unloading
stations which were not permitted to be used and the petitioner
subsequently claimed that those were included due to inadvertent error of
interpretation. Due to the above-stated conduct of the petitioner, the
respondent suffered massive losses.
ARBITRAL TRIBUNAL
10. Since there were disputes between the parties, the respondent was
constrained to file a petition under Section 9 of the 1996 Act which was
withdrawn with the liberty to file a fresh. The respondent thereafter
invoked arbitration vide legal notice dated 03.05.2017. Subsequently,
since the petitioner did not nominate its Arbitrator, a petition under
Section 11 of the 1996 Act was filed by the respondent seeking
appointment of the AT in terms of the WIS Agreement. The same was
allowed vide order dated 04.01.2019 by the High Court of Orissa and a
Three Member Tribunal was constituted wherein Justice Devinder Gupta
(Retd.) acted as a Presiding Arbitrator with Justice Usha Mehra (Retd.)
and Mr. Premananda Mohanty acted as Co-Arbitrators.
AWARD
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11. The AT held that the petitioner was in breach of the terms of WIS
Agreement as it failed to provide the guaranteed number of rakes to the
respondent. The AT allowed some of the respondent’s claims to the tune
of Rs. 130,00,58,548/- along with pendente lite and future interest at 8%
per annum. The AT further awarded a sum of Rs. 71,790/- and
60,00,000/- towards the cost of arbitration and AT’s fees respectively.
SUBMISSIONS ON BEHALF OF THE PETITIONER
12. Mr. Kumar, learned counsel for the petitioner vociferously opposes the
Award and states that the same is patently illegal and is contrary to
fundamental policy of Indian law.
AT admitted the respondent’s evidence without independent
examination
13. He states that the AT has based its Award on the expert report dated
05.11.2019 prepared by Mr. Montek Mayal (CW-2), however the AT
failed to do any independent analysis of the same. He relies on ONGC v.
Western Geco International Ltd., (2014) 9 SCC 263 to emphasise on the
requirement of reasons in support of the decision taken by the judicial or
quasi-judicial authority.
14. He further states that even though the petitioner had not cross examined
the respondent’s witnesses, it was the responsibility on part of the AT to
independently analyse the evidence. He relies on NHAI v. P. Nagaraju,
(2022) 15 SCC 1.
Award suffers from non-application of mind
15. Independent of the above submissions, he states that the report of the
CW-2 could not have been relied upon as the report by the expert as it has
several arithmetic errors and the formula adopted for calculation of
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additional profit/loss of freight rebate is suffered by the respondent is
vague and arbitrary. Further, the formula adopted for computation of
losses suffered by the respondent due to loss of premium on two
additional rakes and inability to place indents on behalf of third parties is
contrary to the WIS policy and WIS Agreement.
16. Computation of loss of freight rebate suffered by the respondent in the
expert report of CW-2 is based on various parameters being number of
additional rebate and bonus rakes that the respondent would have
received, the carrying capacity of each rake, the market price of iron ore
etc, which have no basis in the WIS Agreement.
17. It is further contended that the AT has awarded pendente lite and future
interest at the rate of 8% per annum on the awarded amount from the date
of filing of Statement of Claim (“ SOC ”) till realization, without recording
any reasons in support thereof. The determination of interest, being
devoid of any reasoning, is thus arbitrary and perverse and vitiates the
Award to that extent.
Impugned Award is patently illegal and passed unilaterally
18. He states that the Counter Claim of the petitioner was rejected by the AT
and the Award was passed unilaterally. The petitioner was denied
reasonable opportunity to present its case. He relies on State of
Chhattisgarh v. SAL Udyog (P) Ltd., (2022) 2 SCC 275 to emphasise on
the point that if the express terms of Agreement governing the parties are
ignored, the Award is vitiated by patent illegality.
Impugned Award is passed without consideration of necessary
submissions
19. He relies on Clause No. 4.2 of the WIS Agreement and states that as per
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the extant policy governing the WIS policy only one loading station was
permitted and inclusion of alternate loading station could not be permitted
in terms of the Agreement.
20. He states that the AT ignored the fact that CW-2 was an interested
witness engaged by the respondent and the opinion of CW-2 lacked
independence as the report made by CW-2 was for monetary gain, thus,
making him biased.
21. He also points out that the AT did not appreciate the fact that respondent
failed to produce any single document in support of the claim of placing
indents. The indent process starts with the execution of the forwarding
notes which is submitted by the indenter at the loading station.
22. He further states that the petitioner raised objections about the exorbitant
fees of the AT and that the same was beyond fees prescribed in the fourth
schedule but the AT rejected the prayer to reconsider the fee amount.
SUBMISSIONS ON BEHALF OF THE RESPONDENT
Preliminary Submissions
Failure to pay the AT’s fees
23. Mr. Gaurav Pachnanda and Mr. Gyanendra Kumar, learned senior
counsels for the respondent submit that, even though the petitioner
participated in the arbitral proceedings, the petitioner failed to deposit its
share of the AT’s fees despite the fee structure being determined by the
AT with the consent of both parties on 16.07.2019 and the petitioner's
challenge thereto before the High Court of Orissa also being dismissed.
Consequently, in order to ensure the continuation of the proceedings, the
AT directed the respondent to deposit the petitioner's share, with liberty
to recover the same from the petitioner at the time of passing the Award.
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Accordingly, a sum of Rs. 45,00,000/- towards the petitioner's share of
the AT’s fees and a further sum of Rs. 15,00,000/- towards the additional
fees was paid to the AT.
Petitioner’s repeated attempts to scuttle the arbitration
24. It is also submitted that the petitioner consistently adopted a dilatory
approach with the sole object of delaying and obstructing the arbitral
proceedings. Even the constitution of the AT was substantially delayed
on account of the petitioner's failure to file a timely reply in the
proceedings under Section 11 of the 1996 Act. During the course of the
arbitration, the petitioner repeatedly raised objections regarding the
mandate of the AT, despite the parties having agreed to be governed by
the amended provisions of the 1996 Act. The AT was constrained to
expressly observe that the petitioner was creating unnecessary hurdles in
the completion of the proceedings. Out of 16 sittings of the AT, on 11
occasions the proceedings were adjourned on account of the petitioner's
requests, non-appearance, or failure to comply with the directions of the
AT. It was due to this delay caused by the petitioner, the arbitration took
822 days.
On Merits

25. On merits, learned senior counsels, support the Award and at the outset
state that the scope of interference under Section 34 of the 1996 Act is
well settled. The petitioner has failed to make out any grounds under
Section 34 rather the petitioner has only provided vague objections
challenging the Award.
AT is justified in striking off the Counter Claim of the petitioner from
the record
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26. It is submitted that the petitioner's Counter Claim was struck off solely on
account of its own conduct. Despite repeated directions of the AT and
assurances given by the petitioner, it failed to deposit its share of the
AT’s fees in respect of the Counter Claim. The AT, after recording the
petitioner's persistent non-cooperation, repeated adjournments, and failure
to comply with its directions, was constrained to strike off the Counter
Claim and direct the respondent to bear the petitioner's share of fees in
respect of the claim proceedings.
27. It is further stated that the said rejection of Counter Claim was fully
supported by Section 38(2) of the 1996 Act, which empowers the AT to
suspend or terminate proceedings in respect of a Claim or Counter Claim
where the requisite fee is not deposited. He places reliance on Gammon
India Ltd. v. Trenchless Engineering Services (P) Ltd., 2013 SCC
OnLine Bom 1720 , wherein it was held that a party whose claim or
Counter Claim stands terminated for non-payment of AT’s fee cannot
subsequently assail the Award on that ground under Section 34 of the
1996 Act. Accordingly, they contend that the petitioner, being solely
responsible for the striking off of its Counter Claim, cannot now be
permitted to challenge the Award on that basis and seek to take advantage
of its own default.
Petitioner was given sufficient opportunity to present its case including
the opportunity of cross examination
28. It is argued that the respondent’s grievance regarding the denial of
opportunity to cross examine witnesses and lead evidence is also without
any substance. Whenever the right of the petitioner was closed to lead
evidence or to cross examine a witness, the same was due to defaults on
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part of the petitioner itself.
29. Insofar as the cross-examination of the respondent's fact witness is
concerned, it is stated that despite multiple opportunities being granted,
the petitioner failed to proceed with the cross-examination. On the first
instance, an adjournment was sought despite the witness having travelled
from abroad to attend the proceedings. On the second instance, the
petitioner's counsel sought a further adjournment citing lack of
instructions. Even on the final opportunity granted by the AT, the
petitioner sought another adjournment through a newly engaged counsel.
Further, with respect to the Expert Witness too, the petitioner was
afforded reasonable opportunity to cross examine, but it was the
petitioner who neither appeared nor proceeded with the cross
examination. In these circumstances, the AT, having already granted
sufficient opportunities, rightly closed the petitioner's right to cross-
examine the said witness. He relies on Unison Hotels Private Limited v.
Value Line Interiors Private Limited, 2021 SCC OnLine Del 3096 and
Diwaker Prasad Verma v. HDFC Bank Limited, 2015 SCC OnLine
Bom 5672.
30. Further, the petitioner accepted the closure of its right to cross
examination of the respondent’s witness and the same was never
challenged.
31. Reliance is placed on Vidhyadhar v. Manikrao, (1999) 3 SCC 573 and
Hemant D. Shah v. Chittaranjan D. Shah, 2019 SCC OnLine Bom
2914, to state that in absence of any evidence led by a party, it is
permissible for the AT to draw a presumption that the case set up by it
was not correct. In the present case, the petitioner did not file any witness
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affidavits either in support of his own case or to set up a defence against
respondent’s case, except one, that too belatedly. Even though a witness
affidavit was filed, the petitioner failed to produce the said witness. In the
present case the petitioner neither cross examined any witness of the
respondent nor rebutted the evidence presented by the respondent. Hence,
the entire testimony of the respondent was unrebutted, thus should be
construed as admitted.
The compensation awarded is reasonable and is awarded after
sufficiently analysing and appreciating evidence.
32. Learned counsels for the respondent submit that the petitioner's
contention that the Award was rendered without considering evidence or
properly assessing damages is wholly misconceived and amounts to a
request to this Court to re-appreciate the evidence as an appellate forum,
which is impermissible in proceedings under Section 34 of the 1996 Act.
The respondent led both factual and expert evidence in support of its
claim for damages. The claim was bifurcated under three heads being
damages on account of loss of profit from 2007 to 2010 due to inability to
place its own indents, damages for loss of freight rebate in being unable
to place third party indents between 2010 to 2017 and damages for loss of
premium that the respondent could have charged for use of its bonus
rakes for third party indents. The methodology adopted for quantification
of losses, the underlying material, and the calculations under each head of
claim were duly proved through the respondent's witnesses. An
independent expert also examined and verified the calculations and, upon
identifying certain arithmetic errors, arrived at a lower figure of damages,
which was ultimately awarded by the AT.
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33. It is also submitted that the petitioner neither cross-examined the
respondent's witnesses nor adduced any evidence of its own to challenge
the factual basis, methodology, or quantum of damages. The evidence led
by the respondent thus remained wholly unrebutted. The AT has
specifically considered such evidence and recorded reasons for accepting
the same while awarding damages. It is contended that having failed to
challenge the respondent's evidence before the AT, the petitioner cannot,
for the first time in proceedings under Section 34, seek to assail the
quantification of damages. In the absence of any demonstrated error in
the methodology or calculations accepted by the AT, no ground for
interference with the Award is made out. Reliance is placed on
McDermott International Inc. v. Burn Standard Co. Ltd., (2006) 11
SCC 181 to state that different formulae can be applied in different
circumstances.
The AT has considered all material facts
34. It is emphasised that the petitioner's contention regarding non-
appreciation of material facts is nothing but an attempt to seek a re-
appreciation of evidence and factual findings recorded by the AT. The
AT is the final authority on questions of fact and evidence, and unless its
findings are shown to be perverse or patently illegal, no interference is
warranted. The facts now relied upon by the petitioner in the present
petition were duly considered by the AT and have been expressly referred
to in the Award. He relies on Atlanta Ltd. v. Union of India, (2022) 3
SCC 739 .
The AT decided the issues within the terms of the Agreement
35. It is vehemently argued that the petitioner's challenge is essentially
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directed against the interpretation by the AT of the WIS Agreement and
specifically with respect to whether the WIS Agreement included the
unilaterally issued Circulars by the petitioner and thereby the petitioner
seeks a re-examination of the merits of the dispute, which is
impermissible in proceedings under Section 34 of the 1996 Act.
36. It is pointed out that the AT interpreted the WIS Agreement by placing
reliance on Clause No. 15, which stipulated that any modification to the
terms and conditions of the Agreement could only be effected with the
mutual consent of the parties. Accordingly, the AT rightly held that the
petitioner could not unilaterally alter the terms of the Agreement through
Circulars restricting third-party indents. Learned counsels further submit
that the interpretation adopted by the AT is consistent with the judicial
precedents governing WIS Agreements as well as the law laid down by
the Hon'ble Supreme Court in Ssangyong Engg. & Construction Co. Ltd.
v. NHAI, (2019) 15 SCC 131, which recognizes that unilateral circulars
issued by one party cannot bind the other party in the absence of consent.
It is thus submitted that the findings of the AT are not only plausible but
are also supported by the contractual terms and settled law. No ground for
interference under Section 34 of the 1996 Act is, therefore, made out.

37. Lastly, it is stated that the contention of the petitioner that the AT did not
assign reasons as to award of cost is also without merits as it is apparent
on the face of record that the AT has rendered clear reasoning for
awarding of the same.
REJOINDER SUBMISSIONS ON BEHALF OF THE PETITIONER
Absence of pleadings or evidence in support of respondent’s claims for
a period I
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38. Learned counsel for the petitioner states that the respondent failed to put
forth necessary facts for its claim of damages pertaining to the period
2007-2010. The SOC, except two paragraphs, does not contain any
specific pleading demonstrating that the petitioner failed to supply the
guaranteed number of rakes during the said period, resulting in the
respondent being unable to place its own indents. The only averment, i.e.
paragraph No. 89 (a) is that the respondent was unable to place its own
indents due to shortage of rakes remained wholly unsubstantiated and was
without any kind of evidence throughout the proceedings. On the
contrary, the documents relied upon by the respondent indicated that
indents were being accepted and processed during the relevant period.
Thus, the claim for damages relating to the period 2007-2010 was
unsupported by either adequate pleadings or cogent evidence and,
therefore, ought not to have been allowed by the AT.
39. He further states that the respondent's contention that the petitioner failed
to specifically deny the pleadings relating to the respondent's inability to
place indents, is contrary to the record. No specific case regarding denial
of indents on account of shortage of rakes during the period 2007-2010
was pleaded in the SOC and, therefore, no occasion arose for the
petitioner to furnish a specific denial thereto. Insofar as the claim under
paragraph No. 89 (a) of the SOC is concerned, where the petitioner had
specifically pleaded that the respondent itself had failed to place indents
in accordance with the terms of the WIS Agreement, the petitioner had
placed on record material explaining the procedure governing the
placement of indents, which was duly noted by the AT.
AT’s finding on claim of period I is patently illegal
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40. He states that the petitioner's challenge is not directed towards re-
appreciation of evidence but towards the complete absence of any
reasoning in support of the findings returned by the AT for Period I. The
AT has reproduced the response of the petitioner with respect to period II.
Significantly, the respondent has not identified any portion of the Award
where the AT examined the pleadings, analysed the evidence or
explained the basis on which it concluded that the respondent was unable
to place indents during Period I.
41. He further states that the findings recorded by the AT in respect of the
claim for the period I are wholly unreasoned and suffer from complete
non-application of mind. The AT has neither examined the pleadings nor
the evidence pertaining to the alleged shortfall in supply of rakes nor
considered whether the respondent had, in fact, placed any indents which
were prevented by the petitioner. The Award is completely silent on the
reasoning whatsoever for accepting the same. Reliance is placed on
Batliboi Environmental Engineers Ltd. v. Hindustan Petroleum Corpn.
Ltd., (2024) 2 SCC 375 to contend that an Award bereft of reasons is
contrary to the fundamental policy of Indian law and is liable to be set
aside.

42. He also states that the findings recorded by the AT in respect of the claim
for period I are patently illegal and perverse as it is not based on any
evidence whatsoever. The respondent neither pleaded the material facts
necessary to establish inability to place indents during the relevant period
nor produced any documentary evidence in support thereof. Despite the
absence of pleadings and proof, the AT proceeded to allow the claim,
effectively shifting the burden of proof onto the petitioner. Reliance in
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this regard is placed on PSA Sical Terminals (P) Ltd. v. V.O.
Chidambranar Port Trust, (2023) 15 SCC 781. Furthermore, the
respondent has failed to answer the petitioner's contention that under
Clause Nos. 6.1(c), 7.3 and 7.4 of the WIS Agreement, the obligation to
supply rakes arose only upon placement of valid indents. Even assuming
without admitting that the Circulars were inapplicable, the AT was still
required to determine whether the contractual preconditions governing
supply of rakes stood satisfied. Thus, the findings relating to Period I are
contrary to the express terms of the WIS Agreement and consequently
patently illegal.
Flaws in the case put up by the respondent with respect to quantum of
the claims
43. He states that the respondent's claim for loss of profit during the period I
is founded on mere assumptions and the respondent failed to produce any
material regarding capacity, availability of iron ore, or any actual
business opportunity that was lost on account of non-supply of rakes. No
document or evidence was produced to show the production of iron ore
during the said period. On the contrary, the respondent's own pleadings
and documents indicate that it was utilising the rakes supplied by the
petitioner for transportation of goods belonging to third parties during the
relevant period. Reliance is placed on Unibros v. All India Radio, 2023
SCC OnLine SC 1366 to contend that claims for loss of profit arising
from alleged missed opportunities must be supported by convincing
evidence, which is absent in the present case.
44. He points out that the respondent failed to establish the basis for
computing the profit of Rs.100 per MT while claiming damages towards
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loss of premium for the period March 2010 to February 2017, period II.
The figure was supported only by a self-serving calculation and was not
backed by any independent material. Thus, the claim for loss of premium
was unsupported by evidence and ought not to have been accepted by the
AT. The figure of Rs. 100 MT was accepted by expert witness without
verifying the said figures.

45. Learned counsel for the petitioner further states that the respondent failed
to discharge its obligation to mitigate losses, which is a principle
embodied in Section 73 of the ICA. Neither the SOC nor the evidence led
before the AT discloses any steps taken by the respondent to minimise its
alleged losses. On the contrary, the respondent itself acknowledged the
availability of road transportation. In the absence of any evidence
demonstrating efforts to mitigate losses, the claim for damages could not
have been awarded.
Non application of mind to the quantum of the respondent’s claim
46. He states that the AT completely failed to independently scrutinise the
quantification of damages claimed by the respondent and mechanically
accepted the figures furnished by the respondent and its expert witness.
Substantial sums under the various heads of claim were awarded solely
on the ground that the petitioner had not specifically disputed the
calculations, without undertaking any independent examination of the
claims.
47. It is further stated that the Award does not disclose any independent
reasoning as to how the figures awarded under the different heads of
damages were arrived at. Reliance is placed on Batliboi Environmental
Engineers Ltd. (Supra), Ramesh Chandra Agrawal v. Regency Hospital
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Ltd., (2009) 9 SCC 709 and Pepsi Co. India Holding (P) Ltd. v.
Nishiland Park Ltd., 2012 SCC OnLine Bom 581 to contend that an
Award which mechanically accepts expert opinion without independent
analysis suffers from patent illegality and is contrary to the fundamental
policy of Indian law. The evidence given by the expert is of an advisory
character and the AT needed to independently verify and examine the
same.
ANALYSIS AND FINDINGS
48. I have heard the learned counsels for the parties and perused the material
on record.
49. Before delving into the individual contentions and the merits of
controversy, it is pertinent to briefly highlight the scope of interference
under Section 34 of the 1996 Act. The 1996 Act embodies the principle
of minimal judicial interference in the Arbitral Awards. Section 34
prescribes narrow grounds for setting aside an Arbitral Award and a
Court adjudicating a Section 34 petition does not sit as a Court of Appeal.
It cannot reappreciate evidence and substitute its views to that of an AT,
merely on the ground that a different conclusion could have been arrived
at or a different interpretation was possible. The Court may only interfere
with the findings of the AT on grounds expressly provided under the said
Section i.e. unless the impugned Award is shown to suffer from patent
illegality, perversity, or contravention of the fundamental policy of law,
no interference is warranted. The Hon’ble Supreme Court has discussed
the scope of Section 34 of the 1996 Act in catena of judgments. In
Consolidated Construction Consortium Ltd. v. Software Technology
Parks of India (2025) 7 SCC 757, the Hon’ble Supreme Court has
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By:SAHAJ PREET KAUR
Signing Date:01.07.2026
18:30:34
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observed as under:
“46. Scope of Section 34 of the 1996 Act is now well
crystallised by a plethora of judgments of this Court. Section
34 is not in the nature of an appellate provision. It provides
for setting aside an arbitral award that too only on very
limited grounds i.e. as those contained in sub-sections (2) and
(2-A) of Section 34. It is the only remedy for setting aside an
arbitral award. An arbitral award is not liable to be interfered
with only on the ground that the award is illegal or is
erroneous in law which would require re-appraisal of the
evidence adduced before the Arbitral Tribunal. If two views
are possible, there is no scope for the court to re-appraise the
evidence and to take the view other than the one taken by the
arbitrator. The view taken by the Arbitral Tribunal is
ordinarily to be accepted and allowed to prevail. Thus, the
scope of interference in arbitral matters is only confined to the
extent envisaged under Section 34 of the Act. The court
exercising powers under Section 34 has per force to limit its
jurisdiction within the four corners of Section 34. It cannot
travel beyond Section 34. Thus, proceedings under Section 34
are summary in nature and not like a full-fledged civil suit or
a civil appeal. The award as such cannot be touched unless it
is contrary to the substantive provisions of law or Section 34
of the 1996 Act or the terms of the agreement.”
50. With the above principles in mind, I shall now deal with the contentions
of the parties.
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By:SAHAJ PREET KAUR
Signing Date:01.07.2026
18:30:34
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51. The AT formed four broad issues in relation to various claims agitated by
the respondent. It shall be relevant to reproduce the conclusion arrived at
by the AT. The same reads as under:
“AWARD
230. The Tribunal proceeds to pass the following award:
Whether the Claimant is entitled to a declaration that the
title to the two rakes has not passed from the Claimant to
the Respondent, if so to what effect?
Whether the Claimant is entitled to damages, alleged to
have been suffered, on account of loss of profit from 2007-
2010, being unable to place its own indents due to shortfall
in the supply of rakes by the Respondent, if so to what
amount?
The Claimant is held entitled to recover Rs.42,56,24,384/-
from the Respondent on account of loss of profit from 2007-
2010 being unable to place its own indents due to shortfall
in the supply of rakes by the Respondent
Whether the Claimant is entitled to damages, alleged to
have been suffered, being unable to obtain the freight
rebate on the 6 guaranteed rakes, due to the short supply
of rakes by the Respondent for the period March 2010 to
February 2017, if so to what amount?
The Claimant is held entitled to recover from the
Respondent an amount of Rs.74,28,22,864 towards damages
suffered by it as it was not able to obtain the freight rebate
on the 6 guaranteed rakes, due to the short supply of rakes
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By:SAHAJ PREET KAUR
Signing Date:01.07.2026
18:30:34
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by the Respondent for the period March 2010 to February
2017.
Whether the Claimant is entitled to damages, alleged to
have been suffered being unable to obtain the premium on
the 2 additional bonus rakes, due to the short supply of
rakes for the period March 2010 to February 2017, if so to
what amount?
The Claimant is held entitled to recover Rs.13,16,11,300/-
from the Respondent as damages suffered by the Claimant
being unable to obtain
premium on the 2 additional bonus rakes for the period
March 2010 to February 2017.
Whether the Claimant is entitled to the revenue earned by
the respondent pursuant to respondent using the
Claimant's rakes?
Whether the Claimant is entitled to an award for rendition
directing the Respondent to accounts for the revenue
earned by utilizing the two rakes of the Claimant, if so for
which period?
As transfer of title under the terms and conditions of the
agreement being automatic, title in the rakes had passed to
the Railways on expiry of the period of 10 years. The Claim
thus stand rejected.
Payment of Costs of the Arbitration
The Respondent is held liable to pay to the Claimant an
amount of Rs.71,790/- being 50% of the amount of
Digitally Signed
By:SAHAJ PREET KAUR
Signing Date:01.07.2026
18:30:34
O.M.P. (COMM.) 62/2022 Page 21 of 74

Rs.1,43,979/-, spent by the Claimant towards administrative
and other allied expenses.
Whether the Claimant is entitled to an award for pendent
lite interest and future interest, if so at what rate and from
which date?
The claimant is held entitled to for pendente lite interest and
future interest at the rate of 8% per annum on the awarded
amounts of Rs. 130,00,58,548/-from the date of filing of the
statement of claim till date of the award and future interest
on the awarded amounts of Rs.130,00,58,548/- at the rate of
8% per annum from the date of the award till the date of
payment.
Whether the Claimant is entitled to full legal costs in
pursuing this arbitration?
The Claimant is held entitled to recover from the
Respondent an amount of Rs.60,00,000/- towards Costs of
the arbitration proceedings.”
Preliminary challenges to the impugned Award
52. The undisputed facts of the present controversy are as follows:
The Central Government promulgated a Wagon Investment Scheme with
the objective of augmenting the capacity of railway transport through
private investment. Pursuant to the promulgation of the said scheme, the
parties to the present dispute entered into a WIS Agreement under which
the respondent invested a sum of Rs. 28,33,66,685/- towards purchase of
two rakes comprising of 61 wagons each, totalling to 122 wagons,which
were to be utilised by the petitioner in its common pool of wagons. In
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By:SAHAJ PREET KAUR
Signing Date:01.07.2026
18:30:34
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terms of the Agreement, the respondent was under the obligation to
provide an uninterrupted guaranteed supply of 6 rakes every month to the
petitioner for a period of 10 years with 10% freight rebate. Additionally,
as per the terms of Agreement the petitioner was also entitled to 2
additional rakes, monthly, without any freight rebate. Accordingly, in
terms of the Agreement, a total of 1920 rakes were to be supplied by the
petitioner to the respondent. The respondent supplied only 586 rakes,
thereby creating a shortfall of 1334 rakes.
53. The petitioner has challenged the Award both on preliminary grounds and
on merits. The preliminary challenge to the Award is primarily predicated
on 3 grounds:
a. First , the acceptance of the evidence led by the respondent by the
AT without undertaking any independent examination;
b. Second , the lack of opportunity granted by the AT to the
petitioner to rebut the evidence put forth by the respondent,
thereby causing prejudice to the petitioner;
c. Third , the failure on part of the AT to accept and consider the
counter claim of the petitioner.
54. The first preliminary challenge to the Award is based on the ground that
the AT failed to independently examine and analyse the expert report
prepared by expert witness of the respondent which is the basis of
awarding damages and loss of profit.
55. The contention of the petitioner that the AT accepted the evidence of the
respondent without independent examination cannot be accepted. A
perusal of the Award shows that, with respect to period I, the AT has
provided cogent reasons so as to accept the evidence led by the petitioner.
Digitally Signed
By:SAHAJ PREET KAUR
Signing Date:01.07.2026
18:30:34
O.M.P. (COMM.) 62/2022 Page 23 of 74

The initial claim of the respondent was Rs. 44,12,72,960.61 which was
reduced to Rs. 42,56,24,384/- after independent examination of the expert
report. The AT took note of the detailed calculation for the loss of
additional profit suffered by the respondent. The said table reads as
under:
Additional revenues Additional costs Additional profits
Guide [A] [B] [C] =[A]-[B]
CY2006 - - -
CY2007 Rs. 119,227,468 Rs. 97,685,382 Rs. 21,542,086
CY2008 Rs. 1,414,218,334 Rs. 1,046,229,544 Rs. 367,988,789
CY2009 Rs. 231,310,244 Rs. 195,216,735 Rs. 36,093,509
CY2010 - - -
Total Rs. 1,764,756,045 Rs. 1,339,131,661 Rs. 425,624,384

56. The AT also noted that no evidence has been led by the petitioner to
counter the evidence led by the respondent. The AT considered the
evidence led by parties and concluded that the respondent was unable to
place indents due to shortfall in supply of rakes by the petitioner and
further mentioned its reasoning that no error or discrepancy has been
pointed out in the report of the expert. The reasoning of the AT reads as
under:
“210. No evidence has been led on behalf of the Respondent
to counter the Claimant's evidence. It may be observed that
from 2007 to February 2010, as the Claimant was unable to
place its own indents due to shortfall in the supply of rakes
by the Respondent, during this period those rakes were not
kept idle by the Respondent but the same were utilised by
Digitally Signed
By:SAHAJ PREET KAUR
Signing Date:01.07.2026
18:30:34
O.M.P. (COMM.) 62/2022 Page 24 of 74

the Respondent and it earned full freight by using those
rakes and thus deprived the Claimant of the freight rebate to
which the Claimant was entitled. The Claimant has
examined an expert witness to substantiate its claim for
damages. The expert in its report has stated the manner of
calculation of damages. No error or discrepancy has been
pointed out. According to the Claimant, the calculation of
damages has been made as additional revenue, which the
Claimant would have earned over the period from 2007 to
February 2010, had the Respondent provided the
guaranteed number of rakes in terms of the agreement. The
manner in which damages have been calculated has
remained uncontested. Damages suffered for the
aforementioned period being the additional profit are
Rs.42,56,24,384/-, to which the Claimant is held entitled to
recover from the Respondent.”
57. While determining the freight rebate on the 6 guaranteed rakes in the
period II, the claim amount was substantially reduced from
77,98,77,961/- to 74,28,22,864/- based on perusal of the calculation of the
expert report. The AT also took note of the detailed calculation as
provided by the expert report, which is reproduced as under:
Year Number of
Carrying
Total
Loss of freight
additional
capacity of
freight
rebate/Additional
Rebate
each rake
(INR per
profits (INR)
Rakes
(MT)
MT)
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By:SAHAJ PREET KAUR
Signing Date:01.07.2026
18:30:34
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Guide [A] [B] [C] [D]=
[A]x[B]x[C]x10%
CY2010 81 3,953 1,723 Rs. 55,174,185
CY2011 65 3,953 2,384 Rs. 61,245,761
CY2011 60 4,012 2,448 Rs. 58,926,634
CY2012 131 4,012 2,254 Rs. 118,469,922
CY2013 144 4,012 2,266 Rs. 130,896,089
CY2014 142 4,012 2,346 Rs. 133,677,099
CY2015 144 4,012 2,106 Rs. 121,654,196
CY2016 117 4,012 1,247 Rs. 58,528,976
CY2017 9 4,012 1,177 Rs. 4,250,002
Total 893 Rs. 742,822,864

58. The AT again took note of the fact that no error or discrepancy has been
pointed out in the manner of calculation of the loss of freight rebate in the
expert report. The said observation of the AT reads as under:
“214. It may be observed that from March 2010 to
February 2017, as the Claimant was unable to place third
party indents due to shortfall in the supply of rakes by the
Respondent, during this period those rakes were not kept
idle by the Respondent but the same were utilized by the
Respondent and it earned full freight by using those rakes.
Thus the Claimant was deprived of the freight rebate to
which the Claimant was entitled. The Claimant examined an
expert witness to substantiate its claim for damages. The
expert in its report has stated the manner of calculation of
Digitally Signed
By:SAHAJ PREET KAUR
Signing Date:01.07.2026
18:30:34
O.M.P. (COMM.) 62/2022 Page 26 of 74

damages. No error or discrepancy has been pointed out.
According to the Claimant, the calculation of damages has
been made as additional revenue, which the Claimant would
have earned over the period from March 2010 to February
2017, had the Respondent provided the guaranteed number
of rakes in terms of the agreement. The manner in which
damages have been calculated has remained uncontested.”
59. Similarly, the AT also noted reasons to accept the calculation on loss of
premium on the two additional bonus rakes. The same reads as under:
“221. It may be observed that from March 2010 to
February 2017, due to shortfall in the supply of rakes by the
Respondent the Claimant was not in a position to place
indents of the third parties on the two additional rakes, to
which the Claimant was entitled under the terms and
conditions of the WIS and WIS agreement. During this
period those rakes were not kept idle by the Respondent.
The same were utilised by the Respondent and full freight
was earned by it in using those rakes. The Claimant under
the terms and conditions of the WIS and WIS agreement was
entitled to two bonus rakes per month which were to be
supplied to the Claimant by the Respondent without freight
concession. The Respondent failed to supply even those
rakes. There is enough unrebutted evidence on record that
there was shortfall of the rakes in the market during the
existence of the term of the WIS Agreement. The demand for
the rakes was very high. The Claimant was entitled to utilise
Digitally Signed
By:SAHAJ PREET KAUR
Signing Date:01.07.2026
18:30:34
O.M.P. (COMM.) 62/2022 Page 27 of 74

the 2 additional bonus rakes and to place indents on behalf
of the third parties and obtain from the third parties freight
rebate to which the Claimant was entitled. Due to the
shortfall of supply of rakes for the period March 2010 to
February 2017, the Claimant suffered losses on account of
being unable to obtain the premium on the 2 additional
bonus rakes, not being able to place indents on behalf of
third parties. The Claimant examined an expert witness to
substantiate its claim for damages. The expert in its report
has stated the manner of calculation of damages. No error
or discrepancy has been pointed out. According to the
Claimant, the calculation of damages has been made as
additional revenue, which the Claimant would have earned
over the period from March 2010 to February 2017, had the
Respondent provided the two additional bonus rakes in
terms of the agreement. The manner in which damages have
been calculated has remained uncontested.
222. The Claimant is thus held entitled to recover from the
Respondent damages suffered by it as the Railways failed to
provide every month two additional bonus rakes to the
Claimant from the month of March 2010 to February 2017.
The amount of loss has rightly been calculated as
Rs.13,16,11,300/-which the Respondent is liable to pay to
the Claimant. Damages suffered by the Claimant on account
of being unable to obtain the premium on the 2 additional
bonus rakes for the period March 2010 to February 2017.”
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By:SAHAJ PREET KAUR
Signing Date:01.07.2026
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60. A perusal of the above said reasoning clearly shows that the respondent
led evidence of expert witness to arrive at its calculation for period I. The
respondent also proved in its evidence of CW-1 that the rakes were not
provided by the petitioner. Neither CW-1 and CW-2 were cross examined
by the petitioner to disprove their testimony nor any evidence was led by
the petitioner to rebut the presumption that despite the rakes being
available and provided by the petitioner, were not used by the respondent.
61. It is a trite law that the opinion/report of an expert is only advisory in
nature and the AT is not bound by the same. The evidentiary value of the
opinion and any report based on that opinion falls within the domain of
the AT. In the present case, it is not in dispute that the expert possessed
the requisite qualifications and has also provided cogent reasoning to
arrive at the relevant conclusions in its report. Furthermore, the report has
also been proved by the respondent by examining the expert witness
before the AT. The expert witness was neither cross-examined nor the
petitioner led any evidence in rebuttal. Keeping in mind such
circumstances, this court in a petition filed under Section 34 of the 1996
Act cannot undertake an exercise to revisit and re-analyse the evidence
already proved before the AT. The AT being the master of evidence, is
competent to decide upon the relevancy and extent of reliance to be
placed on the report of the expert. Once the AT has taken a plausible
view, this Court cannot interfere with the same. For the above said
reasons, I find no infirmity in the approach and the reasoning adopted by
the AT.
62. The second challenge on behalf of the petitioner against the Award is that
the petitioner was not given reasonable opportunity to present their case.
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By:SAHAJ PREET KAUR
Signing Date:01.07.2026
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63. Countering the same the respondent has pointed out various adjournments
sought by the petitioner during the arbitral proceedings. He also points
out that the AT was constrained to make adverse remarks against the
petitioner, that the petitioner was deliberately trying to scuttle the
proceedings.
64. The petitioner was non-cooperative and reluctant right from the
beginning. The petitioner also refused to pay its contribution of AT’s fee
as a result of which the respondent had to do so. The same is elaborated
upon in subsequent part of the judgment. As regards the testimony is
concerned, the case of the respondent was primarily based on the
testimony of the fact witness being CW-1, Mr. Gitesh Kumar and the
expert witness being CW-2, Mr. Montek Mayal and the expert report. The
petitioner was given multiple opportunities to cross examine the fact
witness of the respondent. At the first instance, the fact witness, Mr.
Gitesh Singh’s deposition was to be recorded on 17.02.2020 and
18.02.2020. The petitioner sought adjournment on the said date on
account of demise of a close relative. The AT categorically noted that if
the petitioner failed to cross examine the witness on the next date, the
right to cross examine shall be closed.
th
“Proceedings of the 6 sitting of the Arbitral Tribunal held
on 17.02.2020 at 4.00 p.m. at Narula Chambers. Defence
Colony. New Delhi
1. The Claimant's witness Mr. Gitesh Singh is present today
for his statement. On 14.02.2020, an e-mail was received
from Mr. Joydeep Mazumdar, Respondent's Counsel that in
a close relation had passed away on 05.02.2020 in Kolkata
Digitally Signed
By:SAHAJ PREET KAUR
Signing Date:01.07.2026
18:30:34
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and he being the person responsible for performing her last
rites at Kolkata, it was not possible for him to attend the
proceedings and for the same reason, it has not been
possible to finalize the evidence affidavit of the Respondent.
On receipt of e-mail seeking postponement of the two dates
fixed for recording the statement of Claimant's witness, the
Presiding Arbitrator sent following communication to the
parties that there is no likelihood of evidence being
recorded.
2. It is informed that by the time e-mail was received from
the Presiding Arbitrator, the witness had already boarded
the flight from South Africa to Delhi and he is present today.
We have enquired from the witness, he state that he can
stayed there for couple of days more.
3. The Claimant had already sent copy of evidence affidavit
of the witness by e-mail to the Respondent's Counsel. Hard
copies being supplied today. Hard copies have also being
supplied to the members of the Tribunal.
4. The Respondent will also ensure that its evidence
affidavit is filed on or before the next date with advance
copy to the Claimant's Counsel.
5. The next sitting will be held on 3rd and 4th March, 2020
at 5.00 p.m. on both days at C-215, Narula Chambers,
Defence Colony, New Delhi.
6. During the last sitting, it was noticed that the Claimant
had paid only Rs. 3,00,000/- each to each Arbitrator but the
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By:SAHAJ PREET KAUR
Signing Date:01.07.2026
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Respondent has not paid or deposited any amount so far.
Accordingly, it was directed that both parties will ensure
payment of the balance amount of fees before the next date.
We reiterate our order. Ld. Counsel for the Claimant state
that till date the Claimant has been making payment for
fixing venue and due intimation has been sent to the
Respondent so as to enable the pay its half share out till
date Respondent has not responded. Be it stated that parties
have to bear expenses in equal shares. The Respondent will
ensure payment of its share to the Claimant before the next
date.
7. We may observe that in case for any reason,
Respondent's Counsel is not present during the next sittings
fixed by us the right to cross-examine the witness shall stand
closed.”
65. On the next date of hearing i.e. 03.03.2020, the counsel for the petitioner
again sought an adjournment on the ground that no instructions have been
received on behalf of the petitioner. He sought permission to withdraw.
The AT also observed that despite various opportunities being given to
the counsel for the petitioner, neither the list of witness nor evidence
th
affidavit was filed by the petitioner. The order dated 03.03.2020 of the 7
sitting of the AT is reproduced below:
“Proceedings of the 7th sitting of the Arbitral Tribunal
held on 03.03.2020 at 5.00 p.m. at Narula Chambers.
Defence Colony. New Delhi
1. The Claimant's witness Mr. Gitesh Singh is present. He
Digitally Signed
By:SAHAJ PREET KAUR
Signing Date:01.07.2026
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was also present during the last sitting.
2. At this stage, Mr. Joydeep Mazumdar, Ld. Counsel for the
Respondent states that despite his numerous efforts, the
Respondents have not Imparted proper instructions to him.
Even for today he had asked Mr. S.K. Biswas, Dy. Chief
Commercial Manager/SER to depute some responsible
officer from Railway to instruct him so that he is in a
position to cross-examine the witness. In these
circumstances, Mr. Mazumdar states that he may be
permitted to withdraw so as to enable the Respondent to
make alternate arrangement for conduct of the proceedings.
We permit him to do so.
3. It may be noted that during the third sitting held on
20.09.2019, on completion of pleadings the parties were
called upon to file evidence affidavits with list of their
th
witnesses on or before 05.11.2019. During the 4 sitting
held on 30.11.2019 It was noticed that Claimant was ready
with list of witnesses and evidence affidavit but the same
could not be filed as the Respondent had failed to file its list
of witnesses and evidence affidavits. As hardly there is any
sufficient grounds shown to grant further adjournment but
in the interest of justice the parties were called upon to file
their list of witnesses and evidence affidavits on or before
10.01.2020. The hearing was scheduled to be held on
18.01.2020 for recording the statement of Claimant's
witness and two further stings were scheduled for recording
Digitally Signed
By:SAHAJ PREET KAUR
Signing Date:01.07.2026
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remaining Claimant's evidence on 17.02.2020 and
18.02.2020.
4. During the 5th sitting the Tribunal was informed by Mr.
Rohit Dutta, Advocate appearing for the Respondent that
former counsel Mr. P.K. Mallick was no more in the panel
of Respondent and therefore in his place Respondent had
instructed Mr. Mazumdar to appear on its behalf. Again it
was noticed that Claimant was ready with evidence
affidavits but Respondent had not fifed evidence affidavits.
In the interest of justice, one last opportunity was allowed to
the Respondent to file evidence affidavits making clear that
in case evidence affidavits were not filed on or before
13.02.2020 the right of the Respondent to file evidence
affidavits shall stand closed. The case was adjourned to
17.02.2020 and 18.02.2020 for recording Claimant's
evidence.
5. During the 6th sitting held on 17.02.2020, Claimant
witness was present for his statement. As there was a
request from Mr. Mazumdar, Respondent's Counsel on
personal grounds the hearing was adjourned. The
Claimant's witness was present who has come from
Zimbabwe. As per our directions, Claimant has already sent
copy of evidence affidavits of the witnesses by e-mail to the
Respondent on 14.02.2020 and hard copies were also
supplied on the same day i.e. 17.02.2020. The witness stated
that he will stay back for his statement during the next
Digitally Signed
By:SAHAJ PREET KAUR
Signing Date:01.07.2026
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sitting. Accordingly, next sittings were scheduled to be held
on 03.03.2020 and 04.03.2020.
6. The Respondent has not filed evidence affidavits and list
of witnesses. There is nobody present on behalf of the
Railways except Mr. Mazumdar and his associates, who for
the reasons stated above has recused himself. Mr.
Mazumdar states that Respondent Railway is aware of
today's date and was duly informed by him.
7. The Respondent has also not paid any fees so far to the
members of the Tribunal.
8. Examination-in-chief of the witness has been recorded.
There is hardly any ground to adjourn proceedings today
except to close the Respondent's right to cross-examine the
witness. However on the request of Mr. Mazumdar the case
is adjourned for tomorrow i.e. 04.03.2020, the date already
fixed so as to enable him to apprise the Respondent of
necessity of Respondent to cross-examine the witness. It is
made clear that in case nobody is present on behalf of the
Respondent to cross-examine the witness, the right to cross-
examine shall stand closed.
9. List on 04.03.2020 at 5.00 p.m. The witness will remain
present for cross-examination.”
th
66. On the 8 sitting of the AT held on 04.03.2020, the AT observed the
lackadaisical attitude of the petitioner and closed the right of the
petitioner to cross examine the fact witness of the respondent. The AT
also observed that despite repeated reminders the evidence affidavit has
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Signing Date:01.07.2026
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not been filed by the petitioner and in the interest of justice allowed
another opportunity to file the same. The order dated 04.03.2020 of the
th
8 sitting of the AT is reproduced below:
th
“Proceedings of the 8 sitting of the Arbitral Tribunal
held on 04.03.2020 at 05:00 PM at Narula Chambers.
Defence Colony. New Delhi
1. The Claimant's Witness Mr. Gitesh Singh is present today
for his cross-examination. On behalf of Respondent today
Mr. Siddharth Sinha Advocate has put in appearance
stating that he has been instructed to appear. He has filed,
copy of letter from Chief Commercial Manager (FM &
Claims) with the reference to the Minutes of the 7th Sitting
held on 03.03.2020 stating that in place of Shri Joydeep
Mazumdar, the Railways has instructed Shri Siddhartha
Sinha Advocate with instructions to seek adjournment of
today's proceedings and cross-examination of CW-1 may be
deferred for the next sitting.
2. We have heard Ld. Counsel for the Respondent who has
submitted that as he is not well posted with facts short
adjournment may be granted.
3. We have duly considered the submissions but are not
inclined to adjourn the matter In view of detailed order
which was passed yesterday noting the conduct of the
Railways In prosecuting the proceedings. The witness who
has come from Zimbabwe was present since 17.02.2020 but
proceedings had to be adjourned. He agreed to stay back
Digitally Signed
By:SAHAJ PREET KAUR
Signing Date:01.07.2026
18:30:34
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for couple of days and for that reason sitting was scheduled
for 03.03.2020 and 04.03.2020, Be it stated that copies of
all proceedings and communications were duly sent to the
Railways and copy of the proceedings held on 17.02.2020
was also sent to the Railways. Despite that nobody was
present on behalf of Railways yesterday. Today a new
Counsel has put in appearance. The witness has to go back
to Zimbabwe. It reflects total negligence on the part of
Railways in conduct of the proceedings. We are not satisfied
with that prayer made to grant any adjournment.
Accordingly, right to cross-examination of CW-1 stands
closed. The witness is discharged.
4. The proceedings have already been scheduled for 23rd &
24th March, 2020. During that sitting Statement of
Claimant's second witness will be recorded.
5. The Respondent despite last opportunity has also failed to
file its evidence affidavit. in the interest of justice another
opportunity is allowed to file evidence affidavit positively in
or before 18.03.2020 with advance copy served on Ld.
Counsel for the Claimant. In case evidence affidavit is not
filed by the said date the right to file shall stand closed
without any further orders.
6. Ld. Counsel for the Claimant has handed over cheque for
Rs. 24,30,000/-each to the Presiding Arbitrator and Ms.
Justice Usha Mehra after deducting TDS. Towards the
balance share of the Claimant's as sitting fee. Mr.
Digitally Signed
By:SAHAJ PREET KAUR
Signing Date:01.07.2026
18:30:34
O.M.P. (COMM.) 62/2022 Page 37 of 74

Premananda Mohanty has returned his cheque for the same
amount with a request to the claimant to send the amount
through NEFT. The Respondent has not yet paid its share of
fee despite several opportunities. It is stated in the letter
handed over today that fee to be paid to the Arbitrator's has
already been processed and ready for payment. The
Railway requires mandate form of the payee cancelled
cheque and copy of PAN card to be furnished for taking
further action including GST Certificate. We may observe
that GST is not applicable to the Arbitrators. Mr. Mohanty
says that his bank particulars are already available with the
Railways in its computer system of South Eastern Railway.
The other two Arbitrators will send the requisite particulars
shortly.
7. In order to facilitate communication to the Respondents
Advocate following are his particulars:
Name: Siddhartha Sinha, Advocate
Mob No.: 9717952311
E-mail: [email protected]
Address: AB-21, Tilak Marg, Delhi-110001.
8. To come up on 23.03.2020 at 04:00 PM at G-215, Narula
Chambers, Defence Colony, New Delhi. The Claimant will
ensure presence of its witness.”
67. The AT further gave various opportunities to the petitioner to cross
examine the expert witness of the respondent, Mr. Montek Mayal. On the
first opportunity granted to the petitioner on 28.08.2020, to examine the
Digitally Signed
By:SAHAJ PREET KAUR
Signing Date:01.07.2026
18:30:34
O.M.P. (COMM.) 62/2022 Page 38 of 74

expert witness of the respondent, nobody appeared on behalf of the
petitioner as the petitioner was under the impression that the period for
making the Award has been expired even though the parties had
expressly agreed to be governed by the amended provisions as amended
by the Arbitration and Conciliation (Amendment) Act, 2019. The AT was
also constrained to take a note of petitioners conduct to create
unnecessary hardships in completion of proceedings. The said order is
reproduced as under:
th
“Proceedings of the 9 sitting of the Arbitral Tribunal held
on 28.08.2020 at 4:00 PM through video conference
The parties had due notice of today's sitting. Claimant is
duly represented. There is no appearance on behalf of the
Respondent. The Claimant's witness is also present. It
appears that the Respondent is under a mistaken belief that
the period to make an award has expired. This objection has
been taken by the Respondent only in a letter dated
27.08.2020 received today without sharing it with the
Claimants. This impression of the Respondent is not correct.
It also appears that the Respondent is unnecessarily trying
to create hurdles in completion of the proceedings.
In the order of this Tribunal dated 30.11.2019, parties
agreed as follows:
"Ld Counsel for the parties agree and consent on behalf of
the parties that the present proceedings may be governed
under the amended provisions of the Arbitration Act, as
amended by Arbitration and Conciliation (Amendment) Act,
Digitally Signed
By:SAHAJ PREET KAUR
Signing Date:01.07.2026
18:30:34
O.M.P. (COMM.) 62/2022 Page 39 of 74

2019 and that the period for making the award will be
reckoned with from 27.08.2019, the date when pleadings
were completed"
Ld. Counsel for the Claimant has also drawn our attention
to the order of the Hon'ble Supreme Court dated 06.05.2020
in Suo Moto Writ (Civil) No. 3 of 2020 and other connected
matters which is very clear and explicit that due to the
corona situation gives automatic extension for the
completion of arbitral proceedings. In view of the order of
the Hon'ble Supreme Court the period for completion for
proceedings already stand extended. As no appearance on
behalf of the Respondent, there is no other option left to the
Tribunal except to further extend the time for completion
inasmuch as the Tribunal will not today close the right of
the Respondent to cross-examine the witness. One last
opportunity is allowed to the Respondent to cross-examine
CW-2: Mr. Montek Mayal on 07.09.2020 at 2:30 PM. In the
event of Respondent not appearing, there will be no other
option left except to close the right of the Respondent to
cross examine the witness.
It may also be recorded that Mr. Mohanty has been paid his
fees by the Claimant. The Respondent has not paid its share
of fees to the Tribunal in spite of repeated assurance.
The Respondent will ensure that the fee is duly paid before
the next date of hearing.
68. Further on subsequent dates being 07.09.2020 and 11.01.2021, nobody
Digitally Signed
By:SAHAJ PREET KAUR
Signing Date:01.07.2026
18:30:34
O.M.P. (COMM.) 62/2022 Page 40 of 74

appeared on behalf of the petitioner. The orders dated 07.09.2020 and
th th
11.01.2021 for the 10 and 11 sitting of the AT are reproduced below:
th
“Proceedings of the 10 sitting of the Arbitral Tribunal
held on 07.09.2020 at 2.30 p.m. through Video
Conferencing
1. In furtherance to the 9th proceeding of the Tribunal held
on 28.08.2020, CW-2 Mr. Montek Mayal is present for his
cross-examination. The Tribunal had announced to cross-
examine the witness and it was made clear that in the event
of Respondent not appearing there will be no other option
left with the Tribunal except to close the right of the
Respondent to cross-examine the witness.
2. There is no appearance today on behalf of the
Respondent. During the 7th sitting, the statement of CW-1
was recorded. Ld. Counsel for the Respondent had recused
himself and it was on his request the cross-examination was
deferred for 4th March 2020. During this hearing, the
Respondent was duly represented by four Advocates. The
next sitting i.e. 8th sitting was held on 4th March 2020, on
that day Claimant's witness Mr. Gitesh Singh was present
for his cross-examination. Mr. Sidharth Sinha, Advocate
had put in appearance on behalf of the Respondent stating
that he had been instructed to appear on behalf of the
Respondent. He also filed a copy of letter from Chief
Commercial Manager (FM & Claims) with reference to
minutes of 7th meeting stating that in place of Mr. Joydeep
Digitally Signed
By:SAHAJ PREET KAUR
Signing Date:01.07.2026
18:30:34
O.M.P. (COMM.) 62/2022 Page 41 of 74

Majumdar the Railway has instructed Mr. Sidharth Sinha,
Advocate with instructions to seek adjournment of that day's
proceeding and accordingly a request was made to defer the
cross-examination of CW-1 for the next sitting. Proceeding
record that the witness who was under cross-examination
had come from Zimbabwe and was present since 14th
February, 2020 and the proceedings had to be adjourned
due to Respondent's conduct, witness had agreed to stay
back for the next sittings scheduled for 3rd & 4th March
2020. Proceedings also record that all copies of orders
were duly sent to the Railways and it was negligent conduct
on the part of the Railways. Accordingly, right to cross-
examination of CW-1 was closed. The witness was
discharged. The proceedings were accordingly adjourned
for 23rd & 24th March 2020 for recording the statement of
Claimant's second witness. It was also recorded that the
Respondent had failed to avail the opportunity of filing its
evidence affidavits. In the interest of justice, another
opportunity was allowed to file evidence affidavits positively
on or before 18th March 2020 making it clear that in case
evidence affidavit is not filed by the said date the right to
file the same stands closed without further orders.
3. On 15th March 2020, all parties were informed by the
Presiding Arbitrator that in view of the Corona virus cases
in the country and advisory issued by Government of India
and the stand taken by the Hon'ble Supreme Court of India
Digitally Signed
By:SAHAJ PREET KAUR
Signing Date:01.07.2026
18:30:34
O.M.P. (COMM.) 62/2022 Page 42 of 74

rd th
and Delhi High Court, the next dates of 23 & 24 March
2020 stands cancelled and the next date will be duly
notified.
4. The 9th sitting of the Tribunal was then held on 28th
August, 2020 through video conferencing after notice to all
concerned including Respondent. There was no appearance
on behalf of the Respondent. It was under mistaken belief of
the Respondent that as the period of making the award had
expired, therefore, the Respondent had absentees from the
proceedings and this objection was also taken by the
Respondent in a letter dated 27 August 2020 addressed to
the Presiding Arbitrator without sharing It with the
Claimant. The Tribunal on that date put note of the
Respondent objection and its conduct that Respondent was
unnecessarily trying to create hurdles in completion of the
proceedings. A detailed order was passed and the attention
of the Tribunal was also drawn to the order of Supreme
Court dated 6th May 2020 in Suo-moto Writ (C) No. 3 of
2020 and other connected matters. In this view of the
matter, one last opportunity was allowed to the Respondent
to cross-examine CW-2 Mr. Montek Mayal on 7th
September 2020 making it clear that failure on the part of
the Respondent to appear and cross-examine Mr. Montek
Mayal then there is no option left except to close right of the
Respondent to cross-examine the witness.
5. There is no appearance on behalf of the Respondent
Digitally Signed
By:SAHAJ PREET KAUR
Signing Date:01.07.2026
18:30:34
O.M.P. (COMM.) 62/2022 Page 43 of 74

today. As noticed above, Mr. Montek Mayal is present. His
affidavit is already on record including his expert report
dated 5th November, 2019 which has been tendered in
evidence.
6. The Respondent has addressed a letter to the members of
the Tribunal dated 4th September 2020 received today
requesting to terminate the proceedings on the grounds as
stated in the letter.
7. Ld. Counsel for the Claimant states that the stand taken
by the Respondent in the letter is contrary to facts and the
law. She further states that there is hardly any ground to
take cognizance of the stand taken by the Respondent but as
a abandoned precaution the Claimant will file an
appropriate reply to the said letter and also approach
Orissa High Court for appropriate directions in the matter.
The proceedings are accordingly adjourned to 9th October
2020 at 11.30 a.m. for further proceedings.
8. Copy of today's proceedings is also being sent to the
Respondent.
9. It may be noted that Respondent has not yet paid its share
of fees and is directed to pay the same before the next date
of hearing.”
“Proceedings of the 11th sitting of the Arbitral Tribunal
held on 11.01.2021 at 11:30 am through Video
Conferencing
1. The Tribunal met at 11:30 am. There was no appearance
Digitally Signed
By:SAHAJ PREET KAUR
Signing Date:01.07.2026
18:30:34
O.M.P. (COMM.) 62/2022 Page 44 of 74

on behalf of the Respondent. Mr. Montek Mayal CW-2 was
present. His Examination in Chief was recorded who also
proved his Expert Report dated 05.11.2019 after mentioning
slight typographical corrections in his report. As there was
no appearance on behalf of the Respondent inspite of due
notice sent to them on 16.12.2020 and the High Court of
Orissa has extended the time period for completion of
Arbitral Proceedings by only 6 months with effect from
11.12.2020 therefore there was no option left with the
Tribunal except to close the right of Respondent's to cross
examine the witness.
2. It may be mentioned that till date the Respondent has
failed to pay any amount towards the Arbitral fee inspite of
undertaking and rejection of their application by order
dated 05.10.2019.
3. While the order was being dictated an e-mail was
received from the Respondent, which is not marked to the
Claimant to the effect that the Respondent intends to
challenge the Order of Orissa High Court dated
11.12.2020. It may also be mentioned that the said e-mail
has also been marked by the Respondent to its Advocate Mr.
Siddhartha Sinha who had been appearing for the
Respondent in proceedings till 8th sitting. It is very strange
that the Respondent though participated in the proceedings
before Orissa High Court but failed to put in appearance
th
before the Tribunal. During the 10 sitting of the Tribunal
Digitally Signed
By:SAHAJ PREET KAUR
Signing Date:01.07.2026
18:30:34
O.M.P. (COMM.) 62/2022 Page 45 of 74

held on 07.09.2020 the conduct of the Respondent has been
recorded in detail. It appears that the Respondent has no
intention to participate in the proceedings except to prolong
the same. Thrice the Tribunal had to adjourn the
proceedings merely to record the statement of CW-2 on
account of the Respondent. It may also be mentioned that
till date the Respondent has not paid any amount towards
the fee to the members of the Tribunal. The Tribunal in the
facts and circumstances has no other option except to reject
the counter claims of the Respondent.
4. As the Respondent's fail to pay its share of fee the same
will have to be paid by the Claimant. It is directed that in
case the Respondent will fail to pay the fee and contest the
proceeding, the Claimant will pay such fee to the members
of the Tribunal before passing of the award as per
provisions of the Act.
5. To come up on for hearing arguments on 17.03.2021 at
11:30 a.m. through Video Conferencing. The Claimant will
ensure that written submissions are filed before the said
date. The order is may communicated to the Respondent as
usual.”
69. It is evident from the record that the AT afforded more than adequate
opportunity to the petitioner to cross examine the fact witness and expert
witness of the respondent and adduce its own evidence. The petitioner
was granted not just a single opportunity but multiple opportunities on
various occasions. Despite indulgence on several occasions and repeated
Digitally Signed
By:SAHAJ PREET KAUR
Signing Date:01.07.2026
18:30:34
O.M.P. (COMM.) 62/2022 Page 46 of 74

reminders the petitioner neither proceeded with the cross examination of
the witnesses nor led its evidence. Furthermore, despite notices and
directions of the High Court of Orissa to extending the mandate of the
AT, the respondent did not participate the in proceedings.
70. The conduct of the petitioner demonstrates a very casual approach
towards not only rebutting the case of the respondent but also prosecuting
its own case before the AT. Having failed to avail the opportunities
granted, the petitioner, at this juncture, cannot be permitted to contend
that it was denied a fair opportunity to present its case. The principles of
natural justice do require reasonable opportunity be given to the parties to
present their case but it does not require that the proceedings be kept in
abeyance despite the blatant intent of the petitioner not to effectively
participate in the Arbitral proceedings.
71. In my opinion, the AT correctly closed the right of the petitioner to cross
examine the fact and expert witness of the respondent. Had any more
opportunities be given to the petitioner the same would have infact
caused prejudice to the respondent. Thus, the contention of the petitioner
that it was denied the reasonable opportunity to present its case is wholly
misconceived. For the reasons best known to it, the petitioner elected not
to avail any opportunity granted by the AT and has consciously refrained
from actively participate in the proceedings. Even in the present petition,
no satisfactory explanation has been given by the petitioner for its
conduct and/or approach.
72. The last objection is regarding the rejection of Counter Claim by AT. It is
previously noted that the AT on not just one occasion, but on various
occasions directed the petitioner to deposit the fee. The petitioner did not
Digitally Signed
By:SAHAJ PREET KAUR
Signing Date:01.07.2026
18:30:34
O.M.P. (COMM.) 62/2022 Page 47 of 74

comply with the direction of the AT.
73. In this regard, relevant portion of Section 38 of the 1996 Act reads as
under:
Section 38. Deposits.
(1) The arbitral tribunal may fix the amount of the deposit
or supplementary deposit, as the case may be, as an
advance for the costs referred to in sub-section (8) of
section 31, which it expects will be incurred in respect of the
claim submitted to it:
Provided that where, apart from the claim, a counter-claim
has been submitted to the arbitral tribunal, it may fix
separate amount of deposit for the claim and counter-claim.
(2) The deposit referred to in sub-section (1) shall be
payable in equal shares by the parties:
Provided that where one party fails to pay his share of the
deposit, the other party may pay that share:
Provided further that where the other party also does not
pay the aforesaid share in respect of the claim or the
counter-claim, the arbitral tribunal may suspend or
terminate the arbitral proceedings in respect of such claim
or counter-claim, as the case may be.
(emphasis supplied)
74. Careful examination of the same, makes it evident that the AT is within
the power to strike off the Claim/Counter Claim of the party who defaults
in payment of fees. It has already been established that the petitioner till
date has not paid a single penny towards the AT’s fee or expenses
Digitally Signed
By:SAHAJ PREET KAUR
Signing Date:01.07.2026
18:30:34
O.M.P. (COMM.) 62/2022 Page 48 of 74

towards the arbitral proceedings. Thus, in light of the discretion given to
the AT by Section 38 (2) of the 1996 Act, I find no infirmity in the
procedure adopted by the AT to strike off the Counter Claim.
ISSUE I
75. The petitioner while challenging the Award concerning period I, i.e. with
respect to the issue 1, makes a 3 fold argument being firstly, the SOC
contains no pleadings with regards to failure of supply of rakes by the
respondent, secondly, there is no documentary evidence to support the
claimin period I and thirdly, the findings of AT with respect to the period
I is merely 2 paragraphs and AT has wrongly reproduced the period II’s
submissions while dealing with period I.
76. While rebutting the same, learned senior counsels have stated that it is an
admitted case between the parties that the respondent sought to place
indents with the petitioner but the petitioner refused to accept the same.
In this regard paragraph 89 (a) of the SOC relevant and same reads as
under:
“89. The Respondent's failure to supply the agreed number
of rakes, and its refusal to provide the Claimant the right to
utilize the guaranteed supply of rakes in addition to denying
the Claimant its right to use alternate loading/unloading
stations in accordance with the terms of the WIS, the WIS
Agreement, the Supplementary Agreement I and the
Supplementary Agreement II has caused enormous losses to
the Claimant, which are calculated asunder:
(a) Damages suffered by the Claimant on account of
loss of profit from 2007-2010 on being unable to place
Digitally Signed
By:SAHAJ PREET KAUR
Signing Date:01.07.2026
18:30:34
O.M.P. (COMM.) 62/2022 Page 49 of 74

its own indents due to shortfall in the supply of rakes
by the Respondent
(i) The Claimant has suffered damages of INR
44,12,72,960.61/- (INR Forty Four Crores Twelve
Lakhs Seventy Two Thousand' Nine Hundred Sixty and
Thirty Four Sixty One only) towards the short supply of
rakes for the period of December 2006 to February
2010, for which the Claimant was unable to even load
its own indents which is calculated as below:
Summary of Loss of profit on All Shortfall Rakes (from Dec 2006 to Feb
2010)
Year Barbil/Benspani rake Barajamda/ Jaroll rake Total
No of
Loss of
No of
Loss of
No of
Loss of
Shortfall
Profit
Shortfall
Profit
Shortfall
Profit
In rakes
(INR)
In rakes
(INR)
In rakes
(INR
2006 0 0.00 0 0.00 0 0.00
2007 5 120,72,570.92 7 169,01,599.29 12 289,74,170.21
2008 39 1686,13,290.43 50 2080,22,323.22 89 3766,35,613.65
2009 3 88,62,002.43 10 268,01,174.32 13 356,63,176.76
2010 0 0.00 0 0.00 0 0.00
Total 47 1895,47,863.78 67 2517,25,096.83 114 44,12,72,960.61

(ii) The Claimant's year wise profitability for the period
December 2006 to February 2010 on the sale of iron ore
per MT, is calculated based on its audited books of accounts
Digitally Signed
By:SAHAJ PREET KAUR
Signing Date:01.07.2026
18:30:34
O.M.P. (COMM.) 62/2022 Page 50 of 74

and therefore the calculation of damages per year from
December 2006 till February 2010 is made as under:
Number of rakes that were not supplied to the Claimant x
carrying capacity per rake (MT) Average Profit (Per MT)
made by the Claimant in that particular year.”
77. The reply of the petitioner with respect to the above contention of the
respondent, in its SOD also requires a perusal and reads as under:
“25. In reply to the Para no. 89(a) of the statement of claim,
the respondents state that as per Railway rule the
prepayment of freight is mandatory prior to issuance of the
railway-receipt. In case of placing indents approximate
freight should be deposited in Demand Draft failing which
the indent shall not be accepted. The claimant further
accepted that as per goods tariff No. 46/Pt-1, Vol-II freight
payment is compulsory at the time of issuance of Railway
receipt in case of Iron Ore and also confirmed thereby to
abide by the same rule vide letter No. SIL/20/3-14/138 dtd.
07.02.2014.
As the claimant was a defaulter in making payment of the
Railway freight in accordance with the Rules. So the
claimant was denied to supply the WIS rakes. So the loss of
profit alleged by the Respondent's note on procedure for
placing/registration of indents, payment of freight and
issuance of railway receipts.”
78. A combined reading of both shows that the petitioner had restrained the
respondent from placing indents by imposing unilateral conditions being
Digitally Signed
By:SAHAJ PREET KAUR
Signing Date:01.07.2026
18:30:34
O.M.P. (COMM.) 62/2022 Page 51 of 74

payment of freight to be deposited by demand draft at the time of placing
of indents even though the petitioner himself has accepted that the pre-
payment of freight is only necessary for issuance of railway receipts
which is a step after the acceptance of indent. The petitioner has not
shown anywhere that in terms of the Agreement, the payment of freight
charges was a precondition to place indents. Rather, the note on
procedure for placing and registration of Indents submitted by the
respondent before the AT notes down that the freight charges were only
payable after the Indent was accepted. The relevant part of the note
provided by the respondent reads as under:
“16. Therefore, the payment of freight by any consignor can
be done only after indent is accepted and registered by the
IR and weighment of the cargo is done and not at the time of
placing of indents by the consignee to the CGS/ SM. 3043 4
17. It is pertinent to also mention that the freight charges
for certain traffic are recoverable at the time of booking
itself i.e. at the loading station. This is called 'paid' traffic
as opposed 'to pay' facility by paying 5% extra charges over
and above normal freight. This facility enables the party to
pay due charges at destination station. It is submitted that
iron ore would come under „Paid Traffic‟ under the Goods
Tariff No. 46 Pt. I (Vol. II).”
79. The note provided by the petitioner to the AT vide email dated
21.05.2021 on the procedure for placing of indents also does not talk
about the requirement of payment of freight charges before the
acceptance of indents. The relevant part of the petitioner’s note as
Digitally Signed
By:SAHAJ PREET KAUR
Signing Date:01.07.2026
18:30:34
O.M.P. (COMM.) 62/2022 Page 52 of 74

reproduced by the AT in the Award reads as under:
“Respondent’s note on procedure for placing/registration
of indents, payment of freight and issuance of railway
receipts
152. The Respondent also through its email dated
21.05.2021 filed its short note on the procedure for
placing/registration of indents, payment of freight and
issuance of railway receipts, as follows:-
Issue of calculation of rates & issue of railway receipt:
153. The note says that the freight chargeable for a
consignment mainly depends on the following three factors:
1. Weight- The weight to be charged is as per the
notified Permissible carrying capacity of the wagon or
actual weight of the consignment, whichever is higher.
Punitive charges are also levied for loading beyond the
permissible tolerance i.e., Overloading.
2. Distance- The minimum distance for charge is 100
kms. The distance between two stations is ascertained
with the help of the Distance Tables.
3. Classification of the commodity in question, as given
in the IRCA Goods Tariff No. 45, Part I, Vol. II.
154. These factors being known, the rate is worked out by
consulting the Goods Rates Tables FORCA Freight Tariff
Part II) provided for this purpose. The total freight is then
calculated for the given weight and it is rounded off as per
rules given in the Goods Tariff, Part I, Vol. I.
Digitally Signed
By:SAHAJ PREET KAUR
Signing Date:01.07.2026
18:30:34
O.M.P. (COMM.) 62/2022 Page 53 of 74

155. The Freight charges may also differ accordingly as the
goods are booked by the consignor at Railway Risk Rate
(RR Rate) or Owner's Risk Rate (OR Rate) in cases where
OR rate is applicable to the commodity. Most of the
commodities, however, are booked at RR rate only.
156. The freight charges for certain traffic are recoverable
at the time of booking itself where pre-payment of freight is
compulsory. This is called 'paid 'traffic'. In other cases, the
party can avail 'to pay' facility by paying extra charges (the
percentage is revised from time to time) over and above
normal freight. However, this facility has been withdrawn
with the introduction of e-payment. Under FOIS (Freight
Operations Information System). TMS (Terminal
Management System) has been successfully implemented at
the terminal (goods sheds/Sidings). RRs are issued through
the TMS only and payment is realized through e- payment
(under tri-partite agreement - Railways, Party/Consignee
and Bank).
Issue of railway receipt
157. Normally, Railway Receipt can be issued of a wagon
load consignment, after it has been loaded into the wagon.
Separate RR books are supplied to the stations for 'Local'
traffic i.e. traffic originating and terminating on the same
Railway and for 'through' traffic which terminates on
another Railway. Each of these categories also has separate
RR books for "To Pay' traffic and 'Paid' traffic. RR is made
Digitally Signed
By:SAHAJ PREET KAUR
Signing Date:01.07.2026
18:30:34
O.M.P. (COMM.) 62/2022 Page 54 of 74

out in four foils by using the double-sided carbon paper.
The first foil is for record; the second is the Receipt foil to
be given to the consignor. The third copy is for Accounts,
and the fourth copy is called Invoice, which accompanies
the consignments in the wagon.
A RR for „through‟ traffic has one additional foil i.e. the 5th,
which is called transit invoices. The invoice copy of a
'through' consignment is sent to the destination station by
post and the transit Invoice accompanies the consignment in
the wagon.
158. The Railway Receipts are serially numbered. They
contain name of the booking and destination station, names
and addresses of the consignors and consignees, number of
wagons used, description of the goods books, number
packages, actual weight, chargeable weight, chargeable
distance, classification at which charged, freight rate, other
charges, total freight etc.. With advent of computerization in
the freight system, the manual preparation of RR has been
discontinued and E-TRRS (Electronic Transmission of
Railway Receipts) are issued to the consignor/consignee.
159. A consignment may be booked in favour of a particular
consignee, mentioned by name. It may also be booked to
„self‟ in which case the delivery of the goods is given to the
person in whose favour it may be endorsed by the
consignor. The RR is accordingly made out showing the
name of the particular consignee or 'self' in his place.
Digitally Signed
By:SAHAJ PREET KAUR
Signing Date:01.07.2026
18:30:34
O.M.P. (COMM.) 62/2022 Page 55 of 74

Delivery of goods on production of R.R.
160. The person claiming delivery is required to produce
the receipt granted to the sender at the forwarding station.
Goods are not to be delivered to any person other than the
invoiced or endorsed consignee. If a person claiming goods
as the agent of the invoiced consignee presents an
unendorsed railway receipt, delivery is withheld in case
such person cannot produce a properly prepared and stamp
'Power of Attorney'. After delivering the consignment, the
signature of the consignee is taken in the Delivery Book.
Delivery of goods, when RR is not available
161. When an RR is lost, misplaced, or for other reasons is
not available the railway can grant delivery on the authority
of an Indemnity Note, to be executed on a non-judicial
stamp paper of the value chargeable. Indemnity Bond on
un-stamped paper may also be accepted in the following
cases:-
1. Station Masters may, at their discretion, allow delivery of
such articles of trifling value as required, speed delivery, to
well-known persons on stomped indemnity note.
2. Station Masters may similarly, at their discretion, allow
delivery of perishable articles on unstamped Indemnity
Note.
3. When a Government official is the consignee in his
official capacity, he need not execute the Indemnity Note on
a stamped paper, but he has to execute the same on a
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By:SAHAJ PREET KAUR
Signing Date:01.07.2026
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standard unstamped Indemnity Bond.
4. Consignments booked to registered co-operative
societies. In case of goods consigned by a sender to 'SELF'
when the Railway Receipt is lost or otherwise not
forthcoming, delivery may be granted only when the person
claiming the consignments produces a stamped Indemnity
Note duly executed by the consignor, and countersigned by
S.M. of the booking station under his signature and station
stamp. The note must also be endorsed by the sender in
favour of the person to whom the consignment is to be
delivered. It is further incumbent on the person claiming
delivery to execute a second stamped Indemnity Note, duly
signed by him along with a surety and two witnesses to the
satisfaction of the Station Master at the destination station
before delivery can be affected.”
80. A combined reading of the pleadings as well as the above two notes show
that the petitioner had unilaterally imposed a condition of depositing
freight through demand draft along with placing of indents which was
contrary to the terms of WIS.

81. Further, the witness of the respondent, Mr. Gitesh Singh,who is also the
authorised representative of the respondent has stated in paragraph 100 of
his affidavit of evidence as to how the figure of 44,12,72,960.61/-was
arrived at. He also confirmed that the respondent was unable to place the
indents due to the shortfall in the supply in rakes. The relevant paragraphs
read as under:
“100. The Claimant has suffered damages of INR
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44,12,72,960.61/- (INR Forty Four Crores Twelve Lakhs
Seventy Two Thousand Nine Hundred Sixty and Thirty Four
Sixty One only) towards the short supply of rakes for the
period of December 2006 to February 2010. That during the
said period, the Claimant was unable to place its own
indents due to shortfall in the supply of rakes by the
Respondent. Summary of Loss of profit on All Shortfall
Rakes (from Dec 2006 to Feb 2010)
Year Barabil/Banspani rake Barajamda/Jaroli rake Total
No. of
Shortfa
Loss of Profit
No. of
Shortf
Loss of Profit
No. of
Shortfa
Loss of Profit
(INR)
(INR)
(INR)
ll in
Rakes
all in
Rakes
ll in
Rakes
2006 0 0.00 0 0.00 0 0.00
2007 5 120,72,570.92 7 169,01,599.29 12 289,74,170.21
2008 39 1686,13,290.43 50 2080,22,323.22 89 3766,35,613.65
2009 3 88,62,002.43 10 268,01,174.32 13 356,63,176.76
2010 0 0.00 0 0.00 0 0.00
Total 47 1895,47,863.78 67 2517,25,096.83 114 44,12,72,960.61

101. The Claimant's year wise profitability for the period
from December 2006 to February 2010 on the sale of iron
ore per MT is calculated based on its audited books of
accounts. The damages per year from December 2006 till
February 2010 were calculated multiplying the number of
rakes that were not supplied to the Claimant x carrying
capacity per rake (MT) x Average Profit (Per MT) made by
the Claimant in that particular year.”
Digitally Signed
By:SAHAJ PREET KAUR
Signing Date:01.07.2026
18:30:34
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82. The petitioner has not led any evidence to show any requirement as per
the WIS Agreement to pay freight amount in advance only in the form of
Demand Draft, while on the other hand the evidenceled by the respondent
regarding the petitioner not permitting the respondent to place indents,
remained unrebutted. The respondent has led evidenceand the witness
testimony, which has not been rebutted by the petitioner, also proves that
the respondent has placed various indents before the petitioner and the
petitioner has not accepted the indents. Additionally, the rakes were not
provided to the petitioner.
83. The petitioner urges that the Award lacks reasons to substantiate the
reliance placed on the expert’s report and the conclusion arrived at by the
AT with respect to Period I and relies on Batliboi Environmental
Engineers Limited (Supra) and PSA Sical Terminals (Supra) . In the
above judgment, the Supreme Court set aside an Award that was entirely
silent on the reasoning. In the present case is factually distinguishable.
While dealing with the preliminary submissions, I have already held that
the Award, read as a whole, records the basis of the respondent's claims
under each head, the evidence led by the respondent's witnesses (CW-1
and CW-2), and the AT's conclusion on the unrebutted nature of that
evidence. Merely because the findings on Period I are concise does not
render them bereft of reasons.
84. The argument of the petitioner that the AT has travelled beyond the terms
of the WIS Agreement also does not hold much merit. The petitioner
contends that Clause 6.1 (c) read with Clause 7.3 of the WIS Agreement
require the petitioner only to supply the rakes in case the respondent
places indents. However, petitioner has himself admitted in the paragraph
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No. 25 of the SOD of the petitioner filed before the AT, as reproduced
above, that the indents placed by the respondent were not accepted by the
petitioner due to non-fulfilment of a condition unilaterally imposed. This
shows stark contradiction on the stand of the petitioner before the AT and
this Court.
85. Therefore, I find no infirmity in the impugned Award with respect to
issue No. 1. The AT has considered the evidence on record, the
calculation furnished by the respondent and the statement of witnesses
and has arrived at the logical conclusion in holding that the respondent is
entitled to recover such damages on account of loss of profit from 2007-
2010.
ISSUE NO. II and ISSUE NO. III
86. Issue No. II of the Award pertains to freight rebate on the 6 guaranteed
rakes due to the short supply of rakes by the petitioner for period II and
Issue No. III is with respect to the damages suffered due to inability to
obtain premium on 2 additional bonus rakes due to short supply of rakes
for the period II.
87. The petitioner has not made any submission with regards to issue No. II
before the Arbitrator except that the respondent has not fulfilled the terms
of the WIS Agreement. It has also not led any evidence in that regard.
The reply to the claim of freight rebate reads as under:
In reply to the Para no. 89(b) of the statement of claim, it is
submitted that due to non-fulfillment of the terms and
condition of the WIS policy and agreement viz. Para 7.1 &
7.3 of the WIS policy and para 2.5 and 5.1 of the WIS
agreement, the claimant failed to place indents so the
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allegation for obtaining freight rebate by the claimant under
WIS agreement is denied. On the other side the failure on
the part of the claimant to reap the benefit of the freight
rebate had affected the objective of the Railway to augment
the Railway revenue.
88. The AT has relied upon the detailed calculation as provided by the expert
witness in its report to arrive at the conclusion that the respondent is
entitled to an amount of Rs. 74,28,22,864/- towards the damages suffered
by it on account of loss of freight rebate. As already held above, the
perusal of the Award demonstrates that the AT has independently
analysed the expert report and perused the manner of calculation of
damages in order to arrive at their conclusion. The AT noted that there is
no discrepancy noted in the expert report. The expert witness was
examined and the AT satisfied itself of the contents of the expert report. It
is also pertinent to note that the findings of the report were proved by the
examination of the expert witness which remained unrebutted by the
petitioner. Thus, the AT has not mechanically accepted the conclusions of
the expert. The relevant paragraphs of the Award, as reproduced above,
shows that the AT has consciously applied its mind.

89. The petitioner has also argued that the indents post March 2010 were not
accepted in the light of clarificatory Circulars issued by it. The
requirements to place indents as clarified by the Circulars were not
fulfilled by the respondent. Another reason afforded for non-acceptance
of indents was that the inclusion of the alternate loading station was
barred as per Clause No. 4.2 of the WIS Agreement and that it was an
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inadvertent error on part of the petitioner to sign the Agreements, with
alternate loading stations.
90. It is important to highlight that the fact witness of the respondent in its
examination has also pointed out the various impediments imposed by the
petitioner. The same has remained unrebutted by the petitioner. The
relevant paragraphs read as under:
“62. Once again by way of letter dated 13.06.2016, I
informed the Respondent authorities that the Claimant had
followed all the procedural requirements and had further
obtained all the permits required for registration of the
third party indents. I was informed by the Respondent
authorities that despite following such procedural
requirements, the CGS-Jaroli had yet again refused to
accept the indents of the Claimant and had also not
assigned any reason for such refusal. I was further informed
by the Respondent authorities that the WIS rakes of the
Claimant have limited validity and that the Claimant is
required to maintain equal spacing between placing
requests for indents. Copy of the letter dated 13.06.2016
sent by the Claimant is marked as Exhibit C-44.
63. I by way of letter dated 23.08.2016 reiterated the
Claimant's commitment as a WIS partner to the Respondent
authorities and requested the Respondent authorities to
accept the Claimant's requests for registration of indents. I
say that the Claimant placed various indents dated
10.06.2016, 31.07.2016, 11.08.2016, 20.08.2016 and
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21.08.2016 from Jaroli and Banspani Station. I say that the
Respondent refused to accept such indents of the Claimant.
Copy of the letter dated 23.08.2016 sent by the Claimant to
Respondent authorities is marked as Exhibit C-45.
64. I, once again wrote a letter dated 13.09.2016 to the
Respondent authorities requesting that the rakes for
carrying the consignments be allotted as the mining
permissions and forwarding notes against each consignment
has got limited validity. The Claimant also informed the
Respondent that the delay in the supply of the rakes has led
to a cancellation of the indent of the Claimant resulting in
heavy financial losses. Copy of the letter dated 13.09.2016
sent by the Claimant to the Respondent authorities is
marked as Exhibit C-46.
65. Vide final order dated 20.12.2016, the High Court of
Orissa allowed the Writ Petition WP (C) No. 2.8478/2013
filed by the Claimant and quashed the circular dated
17.09.2013 (which excluded third party consignments under
the WIS rakes) in relation the case of the Claimant Copy of
the order dated 20.12.2016 in Writ Petition WP (C) No.
28478/2013 by the Hon'ble High Court of Orissa is marked
as Exhibit C- 47 .
xxxx
68. The Claimant obtained the requisite permissions and
once again vide letter dated 02.02.2017 requested the
Respondent through CGS, Banspani to register/ accept the
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indents of the Claimant including third party consignments.
The, Respondent in violation of the order dated 20.12.2016
refused to register the indents of third parties despite
theClaimant obtaining the requisite permissions. Copy letter
dated 02.02.2017 is marked as Exhibit CW 1/3.”
91. In this regard Clause No. 15 of the WIS Agreement is relevant and is
reproduced as under:
“15.0 CHANGE IN TERMS AND CONDITIONS:
Any change in the terms and conditions of the Agreement
will be made by mutual consent of both the parties.”
92. The said Clause of the Agreement leaves no iota of doubt that any
modifications to the terms of the Agreement could only be done with the
consent of both the parties. The material on record indicates that the
petitioner herein, unilaterally and under the guise of clarificatory
circulars, sought to introduce conditions and imposed restrictions thus
creating impediments for the respondent to place indents. The Circulars
indicate an attempt that the petitioner has unilaterally tried to change the
terms of the Agreement. Further, the contention of the petitioner that the
inclusion of alternate loading stations was inadvertent error and the same
is not allowed by the Agreement also does not cut ice. There is no
inadvertent error rather the inclusion of the alternate stations in the
Supplementary Agreement was a conscious decision on part of the
petitioner.The Supplementary Agreements were signed so as to include
the alternate stations. Even if the Agreement does not allow the inclusion
of more stations for loading and unloading, the terms of the Agreement
could always be changed in terms of Clause 15 of the Agreement. The
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petitioner signed the Supplementary Agreements, thus, changing the term
of the Agreement, therefore, now at this juncture, having expressly
agreed to change the terms, the petitioner cannot plead that it was never
the intention of the petitioner to include the alternate loading stations.
93. Insofar as Issue No. III is concerned, the AT has relied on the unrebutted
expert witness’ report and awarded a sum of Rs. 13,16,11,300/- in favour
of the respondent. The grievance of the petitioner is with the approach
adopted by the expert particularly the assumption of premium of 100 per
MT to calculate the loss suffered by the respondent. It is also stated by
the petitioner that the AT has mechanically accepted conclusions of the
expert report without independent examination.
94. Having considered the argument of the petitioner, I am of the view that
aforesaid objections with respect to the calculations and to the expert
report do not merit any acceptance. What requires emphasis here is that
the said objections were never raised before the AT. Despite adequate
opportunities, the petitioner failed to rebut the expert evidence and
adduce its own evidence, thus waiving off the right to question it in the
proceedings under Section 34 of the 1996 Act. The objections under
Section 34 do not provide fresh opportunity for raising factual disputes,
especially the ones never urged before the AT. Reliance in this regard is
placed on Srishti Infrastructure Development v. Scorpio Engineering
Private Limited and Anr. passed in O.M.P. (COMM.) 246/2022 . The
relevant paragraphs read as under:
65. Following the law laid down by the Hon„ble Supreme
Court in MMTC Ltd. (supra), a Hon„ble Division Bench of
the Bombay High Court in Azizur Rehman Gulam and
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Others v. Radio Restaurant and Others 2023 SCC OnLine
Bom 2320 inter alia held as under:
“27….
B. Additionally, we must note that every ground of
challenge to the Arbitral Award in the present Appeal
was neither raised as a ground of defense before the
Arbitral Tribunal nor was taken as a ground of
challenge to the Arbitral Award in the Petition filed
under Section 34. The Hon'ble Supreme Court in the
case of MMTC Ltd. v. Vedanta Ltd.44 has specifically
held as follows, viz.
“14. As far as interference with an order made
under Section 34, as per Section 37, is concerned,
it cannot be disputed that such interference under
Section 37 cannot travel beyond the restrictions
laid down under Section 34. In other words, the
Court cannot undertake an independent
assessment of the merits of the award and must
only ascertain that the exercise of power by the
Court under Section 34 has not exceeded the
scope of the provision. Thus, it is evident that in
case an arbitral award has been confirmed by the
Court under Section 34 and by the Court in an
appeal under Section 37, thisCourt must be
extremely cautious and slow to disturb such
concurrent findings.”
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28. What the Appellants have therefore sought to do in
the present Appeal is to effectively challenge the
Arbitral Award afresh on grounds never taken before.
We find that such a course of arguments, apart from
being in the teeth of the law laid down by the Hon'ble
Supreme Court in the case of MMTC Ltd. (Supra), if
allowed, would infact unsettle the entire scheme of
Chapters VII, VIII and IX of the Arbitration Act. Thus,
equally on this ground alone, the present Appeal must
also fail.”
66. Further, the reliance placed by the respondent no. 1 on
the judgment of the Hon„ble Supreme Court in Union of
India (Railways) (supra) is well placed where the Hon„ble
Supreme inter alia held as under:
“27. If a plea is available, whether on facts or law, it
has to be raised by the party at an appropriate stage in
accordance with law. If not raised or/and given up
with consent, the party would be precluded from
raising such plea at a later stage of the proceedings on
the principle of waiver. If permitted to raise, it causes
prejudice to other party. In our opinion, this principle
applies to this case.”
(emphasis supplied)
xxxx
68 . Permitting the petitioner to raise such contentions for
the first time in these proceedings would amount to
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bypassing the arbitral process and scuttling the very object
and efficacy of arbitration. The petitioner, having chosen
not to raise these issues before the arbitrator, cannot now
be permitted to turn around and challenge the award on
grounds that were never part of the arbitral record.
Additionally, none of the issues are such that can hit at the
root of the arbitral award.”
95. Further, the quantification of damages, the methodology used and the
evidence relied upon are matters to be examined by the AT based on the
material on record. The AT is the master of evidence and thus, it is a
matter falling solely within the domain of the AT as it involves in-depth
analysis of the evidence on record. Under Section 34 of the 1996 Act, the
Court does not sit in appeal so as to adjudicate upon the merits of the
matter merely because an alternative view or a different logical
conclusion may be arrived at.
96. This Court under Section 34 cannot adjudicate whether the expert report
was correct and whether the methodology adopted in the report was
correct, more so when the petitioner has not challenged the report before
the AT despite multiple opportunities being granted. Such an exercise is
wholly impermissible within the bounds of Section 34 of the 1996 Act.
97. Hence in my considered opinion, the petitioner cannot be permitted to
agitate fresh factual grounds before the Court in a petition filed under
Section 34 of the 1996 Act. Even otherwise, the AT has recorded a
plausible finding with respect to the correctness of the expert report. I do
not find any reason to interfere with the same.
Digitally Signed
By:SAHAJ PREET KAUR
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98. Independent of the above conclusion, upon examination of the objections
of the petitioner, Clause No. 5 of the WIS Agreement is relevant and is
reproduced as under:
“5.0 BENEFITS ADMISSIBLE TO INVESTOR
5.1 For investment made in every BG rake with
maintenance spares, investor will be assured of supply of a
guaranteed number of rakes every months as follows:
5.2 Category BOXN Wagons
Freight rebate of 10% shall be granted for 10 years and
guaranteed supply of wagons at the rate of 6 (six) rakes per
month. In addition, a guaranteed supply of two bonus rakes
will be made without freight concession.
5.3 The guaranteed supply under Wagon Investment Scheme
(WIS) will be in addition to normal supply of rakes to in
such investors (supply during the previous financial year
shall be reckoned as normal supply).
5.4 In addition to the above, a guaranteed supply of two
bonus rakes will be made without freight concession to
those opting for the Engine on Loan Scheme (EOL)
5.5 Lease charges shall be payable under WIS
5.6 Ownership of Wagons: Ownership of BOXN wagons
procured under Wagon Investment Scheme (WIS) shall get
transferred to Indian Railways after 10 years from the date
on which full raise has been handed over to JR.”
99. In terms of the said Clause 5, reproduced above, the respondent was
entitled to 6 guaranteed rakes with 10% freight concession and two
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additional bonus rakes without freight concession which it was unable to
obtain due to shortfall in supply of rakes during the relevant time.
100. Thus, it was the contractual liability of the petitioner to supply the 6
guaranteed rakes and 2 bonus rakes. The petitioner states that the
respondent has not adduced any evidence so as to prove that the indents
were placed. However, the learned counsel for the respondent has placed
on record sufficient evidence, as already reproduced above, to support the
findings and conclusion that the indents were refused and rejected by the
petitioner. The fact witness of the respondent has categorically stated the
impediments imposed by the petitioner in accepting the indents of the
respondent. It is pertinent to mention that the evidence of the fact witness
remains unrebutted.
101. The second objection taken by the learned counsel for the petitioner is
basis of figure “ Rs. 100 per MT ”. The expert witness in its report has
categorically stated the considerations taken into account to arrive at this
figure. The relevant portion of the affidavit of expert reads as under:
“108. The amount of losses as mentioned in paragraph 107
above were calculated on basis of: No. of bonus rakes not
supplied carrying capacity per rake (MT) x Premium
amount the Claimant would have made (assuming the same
to be INR 100/ MT)=Total Loss in premium. I say that the
assumption of INR 100/MT is based on the factors such as
demand of rail rakes for transporting bulk commodities
such as iron ore vis-a-vis supply of rail rakes; availability of
guaranteed rakes with the Claimant, priority to WIS
customers as against other customers availing railway
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freight services under the normal allotment of rakes; and
availability and applicable costs of alternate modes of
transport.
A detailed calculation towards the loss for each month and
each year from 2010 till 2017 is marked as Exhibit
CW1/51 .”

102. The figure of INR 100 per MT is reasonable and plausible and in the
absence of evidence to the contrary, acceptable. Thus, the findings of the
AT cannot be interfered with. As it can be concluded that the objections
on merits, even otherwise are without any merit. There is sufficient
evidence to support that the findings of the Arbitrator
103. It is also been stated that the AT has wrongly awarded cost of arbitration
and legal cost. The perusal of the discussion shows that the petitioner
failed to pay its 50% share towards administrative and other expenses as
well as failed to deposit its share of arbitration costs. Since the respondent
had made the payments for and on behalf of the petitioner, the AT has
correctly awarded the same in favour of the respondent.
104. The petitioner also challenges the grant of the rate of interest at 8% per
annum both pendente lite and future. The law with regard to grant of
interest is settled. The Hon’ble Supreme Court in Morgan Securities &
Credits (P) Ltd. v. Videocon Industries Ltd., (2023) 1 SCC 602
“25. Section 31(7)(a) confers a wide discretion upon the
arbitrator in regard to the grant of pre-award interest. The
arbitrator has the discretion to determine the rate of
reasonable interest, the sum on which the interest is to be
paid, that is whether on the whole or any part of the
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principal amount, and the period for which payment of
interest is to be made — whether it should be for the whole
or any part of the period between the date on which the
cause of action arose and the date of the award. When a
discretion has been conferred on the arbitrator in regard to
the grant of pre-award interest, it would be against the
grain of statutory interpretation to presuppose that the
legislative intent was to reduce the discretionary power of
the arbitrator for the grant of post-award interest under
clause (b). Clause (b) only contemplates a situation where
the arbitration award is silent on post-award interest, in
which event the award-holder is entitled to a post-award
interest of eighteen per cent.
26. The arbitrator has the discretion to grant post-award
interest. Clause (b) does not fetter the discretion of the
arbitrator to grant post-award interest. It only contemplates
a situation in which the discretion is not exercised by the
arbitrator. Therefore, the observations in Hyder Consulting
[Hyder Consulting (UK) Ltd. v. State of Orissa, (2015) 2
SCC 189 : (2015) 2 SCC (Civ) 38] on the meaning of “sum”
will not restrict the discretion of the arbitrator to grant
post-award interest. There is nothing in the provision which
restricts the discretion of the arbitrator for the grant of
post- award interest which the arbitrator otherwise holds
inherent to their authority.
xxxx
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28. In view of the discussion above, we summarise our
findings below:
28.1. The judgment of the two-Judge Bench in S.L. was
referred to a three-Judge Bench in Hyder Consulting on the
question of whether post-award interest could be granted on
the aggregate of the principal and the pre-award interest
arrived at under Section 31(7)(a) of the Act.
28.2. Bobde, J.'s opinion in Hyder Consulting held that the
arbitrator may grant post-award interest on the aggregate
of the principal and the pre-award interest. The opinion did
not discuss the issue of whether the arbitrator could use
their discretion to award post-award interest on a part of
the “sum” awarded under Section 31(7)(a).
28.3. The phrase “unless the award otherwise directs” in
Section 31(7)(b) only qualifies the rate of interest.
28.4. According to Section 31(7)(b), if the arbitrator does
not grant post-award interest, the award holder is entitled
to post-award interest at eighteen per cent.
28.5. Section 31(7)(b) does not fetter or restrict the
discretion that the arbitrator holds in granting post-award
interest. The arbitrator has the discretion to award post-
award interest on a part of the sum.
28.6. The arbitrator must exercise the discretionary power
to grant post-award interest reasonably and in good faith,
taking into account all relevant circumstances.
28.7. By the arbitral award dated 29-4-2013, a post-award
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interest of eighteen per cent was awarded on the principal
amount in view of the judgment of this Court in S.L. Arora.
In view of the above discussion, the arbitrator has the
discretion to award post-award interest on a part of the
“sum”; the “sum” as interpreted in Hyder Consulting.
Thus, the award of the arbitrator granting post-award
interest on the principal amount does not suffer from an
error apparent.”
105. It is established from the above precedents that the grant of interest lies
exclusively within the domain of the AT and the AT enjoys discretion to
award interest, thus, in view of the fact that grant of interest at 8% per
annum seems both reasonable and fair, I am not inclined to interfere with
the same.
CONCLUSION
106. For the said reasons, I find no reason to interfere with the findings of the
AT in the impugned Arbitral Award dated 09.06.2021 and Ratification
Order dated 27.07.2021.
107. The petition is disposed of in aforesaid terms, with pending applications
if any.


JASMEET SINGH, J.
JULY 01, 2026/(MU)
Digitally Signed
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