M/S PCL-SUNCON (JV) vs. NATIONAL HIGHWAYS AUTHORITY OF INDIA

Case Type: First Appeal Order Original Side

Date of Judgment: 11-02-2015

Preview image for M/S PCL-SUNCON (JV)  vs.  NATIONAL HIGHWAYS AUTHORITY OF INDIA

Full Judgment Text


* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 25.08.2015
Pronounced on: 02.11.2015


+ FAO(OS) No.131/2014

M/S PCL-SUNCON (JV) ..... Appellant

Through: Dr. Amit George with Ms. Omana
George, Mr. Swaroop George and Ms. Rajsree
Ajay, Advocates.

Versus

NATIONAL HIGHWAYS AUTHORITY OF INDIA ..... Respondent
Through: Ms. Meenakshi Sood with Mr. Mukesh
Kumar, Advocates for NHAI.

directed against the order of the Learned Single Judge dated
08.01.2014. The impugned judgment set aside the award of an Arbitral
Tribunal dated 24.02.2013. The question concerns a claim for
compensation by, the appellant (hereinafter PCL), which essentially
turned on the interpretation of the contract terms concluded on
20.09.2001 between it and the respondent (hereinafter NHAI).
2. The facts necessary to decide this case are that in February
2001, NHAI invited bids for the work of four landing and
FAO(OS) No.131/2014 Page 1



strengthening of the existing two lanes between Km. 320 and Km.
398.75 on NH-2 in the State of Jharkhand (hereafter referred to as the
„subject work‟). The documents in the Notice Inviting
Tender (hereafter NIT) included inter alia a Bill of Quantities
(hereafter BOQ) that specified the various items of work and the
corresponding quantities that required to be executed under each
particular item of the BOQ. PCL, a Joint venture undertaking,
submitted a bid for the subject work on 14.05.2001. After due
consideration of the bid submitted by PCL, and on finding the same to
be the most competitive, NHAI accepted the bid of the appellant by
letter dated 31.07.2001. Pursuant thereto, a formal agreement for the
subject work was executed by the PCL and NHAI on 20.09.2001.
3. PCL was executing the various items as had been stipulated in
the BOQ and had been receiving payments towards the same in the
various Interim Payment Certificates. However during the execution
of the work, it so emerged that NHAI had omitted certain items in the
BOQ aggregating in value to ` 19,16,83,938.60/- These items
remained non-operable throughout, and were never instructed to be
operated even till issue of Taking Over Certificate for the whole of the
works or any stage thereafter. The Contract in question contains
specific provisions dealing with variations that might occur during the
execution of the work and also provides for the pricing of such
variations. Aggrieved by the omission of the BOQ items, and claiming
entitlement to be compensated in terms of contractual provisions,
PCL, by its letters dated 04.04.2008 and 22.09.2008 raised the issue of
and called upon the Engineer to initiate the necessary variation order
FAO(OS) No.131/2014 Page 2



for the same and compensate it for the financial loss suffered by it. In
response to the second letter NHAI replied by a communication dated
03.11.2008 rejecting the PCL‟s claim. After receiving no response to
its letter-dated 04.02.2009 insisting upon the justification of its claim,
PCL invoked the dispute resolution procedure as contained in the
contract. Consequently, a three-member arbitral tribunal was
constituted to adjudicate the dispute between the parties.

4. The two principal claims before the Arbitral Tribunal, aside
from interest and costs, were pertaining to (i) the refund of labor cess,
and (ii) loss of profit and overheads on omitted items. Subsequent
thereto, the Tribunal made an award dated 24.02.2013 partially
allowing PCL‟s claims. Aggrieved, NHAI approached this Court by
means of a petition under Section 34 of the Act.

5. By impugned order and judgment dated 08.01.2014 (hereafter
referred to as the impugned order) the Single Judge allowed the
NHAI‟s objection to the award, to the extent that the claim pertaining
to the loss of profits and overheads as awarded by the Arbitral
Tribunal was set aside.

Pleas and Submissions of the appellant, PCL
6. The first and primary ground which PCL urges and its counsel,
Mr. Amit George argues, is that the impugned judgment overreached
in terms of the limited mandate under Section 34. The construction of
the Contract by the Arbitral Tribunal, whether right or wrong, is a
question that falls exclusively within its domain. It is immaterial how
FAO(OS) No.131/2014 Page 3



many possible constructions the Contract is capable of, or that the
Court believes that there exists a construction that is more appropriate
and preferable that the one adopted by the Tribunal, or even that the
construction given to it by the Tribunal is wrong. Section 34 does not
confer Appellate jurisdiction upon the Court so admitting re-
appreciation of the terms of the Contract. A petition under Section 34
is in no manner analogous to a case in appeal before the Court. The
jurisdiction under Section 34 does not have the same or even similar
concomitants of the court‟s appellate jurisdiction. Compared with a
Court‟s appellate jurisdiction, narrow latitude is given to it in terms of
its ability to set aside an award under Section 34. The scope of the
provision extends to only those cases where there exists some
discernable and substantial form of procedural irregularity,
irreconcilable with the principles of natural justice or those cases
where the award itself suffers from some patent illegality.
7. It is argued that a reading of a contract (by the Tribunal) at odds
with the opinion of the Court falls within none of the permissible
categories under which an award can be interfered with. This being the
settled position of law, the substitution made by the Single Judge of
his interpretation of the Contract over the one pronounced by the
Tribunal is bad in law for the simple reason that it was not the place of
the Court to deduce the implications of the Contract in question. In
this regard, learned Counsel cited Steel Authority of India Ltd. v.
Gupta Brother Steel Tubes Ltd. (2009) 10 SCC 63 to show that an
error relatable to interpretation of the Contract by an arbitrator is an
error within its jurisdiction and such error is not amenable to
FAO(OS) No.131/2014 Page 4



correction by Courts as such error is not an error on the face of the
award.
8. It is further urged by PCL and contended by its Counsel that the
construction given to the Contract, and by reason of which the
Learned Single Judge denied the claim for compensation for the
financial loss caused to it by the variation of certain items of the BOQ,
is erroneous and incompatible with its terms. Mr. George contends
that the valuation of the omitted items ought to have been done in
terms of Clause 52.1 of the Contract, independently of Clauses 52.2
and 52.3. The variation made by the Respondent, in the manner of an
omission must be valued during the pendency of the Contract, in terms
of Clause 52.1. Clause 52.1 speaks to valuation of a variation made
during the execution of the subject work, in this case a variation made
by way of an omission of certain items of the BOQ, admittedly under
Clause 52.1(b) of the Contract. Clause 52.2 on the other hand concerns
a situation that is entirely removed from the one asserted by PCL,
namely where the variation is of such a nature as to effect the original
valuation of the items of the BOQ. In such a case, a re-examination
and resultant re-fixation of rates may take place. Learned Counsel
argued that while Clause 52.2 entails a potential re-fixation of the rates
of even the existing items of the BOQ, predicated on the ability of the
purported variation to render the original rates inappropriate, Clause
52.1 concerns only the stand-alone valuation of the variation and not
the existing items of the BOQ. The two clauses, therefore, serve two
different purposes. PCL, it is urged sought compensation on the
ground of Clause 52.1 and not Clause 52.2. Ld. Counsel cited
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National Highways Authority of India v. ITD Cementation India Ltd .
2009 (3) Arb. LR 268 (Delhi) wherein this Court had taken a view
similar to that of the Arbitral Tribunal in the present case.
9. NHAI on the other hand, resisted the appeal. It submits- and its
counsel, Ms. Meenakshi Sood urges this Court to uphold the
impugned order of the Learned Single Judge, since itis premised on
the correct interpretation of the terms of the Contract. Learned
Counsel submits that the variation being in the nature of an omission,
the valuation could be made either in terms of Clause 52.1 or 52.2
bearing in mind the cap or the limitations provided in Clause 52.3. She
contends that 52.3 is in the nature of a restriction or limiting condition,
that dictates compliance, while valuing variation made under 52.1.
10. Ms. Sood contends that Clause 52.3 categorically provides that
only such additions or deductions of the contract price will be made
which are in excess of 15% of the contract price. In other words,
unless the valuation of the variation made under either 52.1 or 52.2
leads to an addition or deduction in the contract price in excess of 15
percent, that valuation shall not be given effect to. JSC Centrodostroy
v. National Highways Authority of India FAO(OS) No. 508/2013,
decided on 10.01.2014 was cited as an authority for the application of
Clause 52.3. It was contended that a Division Bench of this Court, in
the said judgment had favored the interpretation whereby primacy was
accorded to Clause 52.3.
Analysis and Conclusions:
11. The core of the dispute between the parties is with regard to the
manner of valuation of the omitted items. PCL contends that valuation
FAO(OS) No.131/2014 Page 6



is to be done of Clause 52.1 of the Contract; NHAI refutes this
submission, relying on Clauses 52.2 and 52.3 to deny PCL its
entitlement to compensation for financial loss caused by the omission
of items of BOQ. The Arbitral Award accepted PCL‟s contention
stating that valuation must be in terms of Clause 52.1. The Learned
Single Judge agrees with the interpretation of NHAI.
12. The dispute in the present case may be condensed into a simple
question of entitlement of PCL to compensation for the variation made
in the items of the BOQ. The question of entitlement is to be answered
with reference to the terms of the contract that govern the agreement
between the parties. At this stage, it may perhaps seem passé to
reiterate that courts are to exercise restraint when entertaining a
challenge against an arbitral award. The principle on which arbitration
is based, i.e. as an alternate dispute settlement system mandates such
restraint from the courts. Nevertheless, are counting of the principles
guiding the courts while entertaining such petitions is apposite.
13. The Court‟s jurisdiction and the depth of its inquiry has been
circumscribed by a plethora of judgments. In McDermott International
Inc. v. Burn Standard Co. Ltd. And Ors (2006) 11 SCC 181 the Court
held that intervention is envisaged in very limited situations, for
instance when there is the presence of fraud or bias by the arbitrators,
or where the principles of natural justice have been disregarded. These
principles are illustrated in the landmark case of the Supreme Court in
Union of India v. AL Rallia Ram AIR 1963 SC 1685 where the Court,
held that the award of the arbitrator is ordinarily final and conclusive,
unless a contrary intention is disclosed by the agreement. The award is
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the decision of a domestic tribunal chosen by the parties, and the civil
courts, which are entrusted with the power to facilitate arbitration and
effectuate the awards, cannot exercise appellate powers over the
decision. Oil and Natural Gas Commission vs Saw Pipes , (2003) 5
SCC 705 (hereafter “ONGC” ) is the basic authority where the
Supreme Court clarified that when Section 34(2)(a)(v) states that the
arbitral procedure must be in accordance with Part One, it means that
the mandatory requirements of Section 28 must be followed by the
arbitral tribunal, and failure to do so entails a setting aside of the
award (paragraph 12). Therefore, the Court held:
If the award is contrary to the substantive provisions of
law or the provisions of the Act or against the terms of
the contract, it would be patently illegal, which could be
interfered under Section 34. However, such failure of
procedure should be patent affecting the rights of the
parties. ” (paragraph 14)
The Court also held that an award can be set aside as contrary to inter
alia, public policy. The court held that “public policy” , under S.
34(2)(b)(ii), was to be given a “broad meaning” , and included
situations where an award was “patently illegal” :
Illegality must go to the root of the matter and if the
illegality is of trivial nature it cannot be held that award
is against the public policy. Award could also be set
aside if it is so unfair and unreasonable that it shocks the
conscience of the Court. Such award is opposed to public
policy and is required to be adjudged void. ”(paragraph
30)
In ONGC , the Supreme Court set aside the arbitral award on the
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ground that the tribunal had failed to consider Sections 73 and 74 of
the Contract Act, and relevant precedents, in awarding damages. What
is “patent illegality” has been clarified in subsequent cases.
14. The learned Single Judge, while taking note of the principles
above, held that even though interpretation of the terms of a contract
was solely within the ambit of the Arbitrator, the same would not be
the case if only one interpretation of the terms of the contract is
possible. While we do not disagree with the statement at the very
outset, we hasten to add that unless the interpretation adopted by the
arbitrator or tribunal is one that is indisputably misconceived or
incongruous and removed from the terms of the contract, it should not
be rejected even though the courts believe that there may be only one
truly rightful interpretation of the Contract. It is perhaps safer to
approach a petition challenging an award by first contextualizing the
award of the arbitrator and whether given the facts of the case, the
interpretation given by it would border on absurdity. The jurisdiction
of the Court being limited, it seems as if the purpose would be
defeated if the Court first approached the Contract, decided what the
possible interpretations in his opinion were and then see if the award
was aligned towards any of the conclusions acceptable to the judge.
The difference though merely one of approach, is vital, since in the
former case, a level of credibility and respect for arbitration as an
alternate system is afforded, while in the latter, the role of the court is
akin to one sitting in appeal over a decision of a lower court. The
primary difference between the two is that errors in the latter of any
nature are impermissible and cannot be countenanced, while in the
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case of an arbitral award, errors as to law or fact, for instance in the
case of interpretation of a contract are errors within the jurisdiction of
the arbitral tribunal and are not for the Court to rectify unless the error
is one relatable to the ones spoken of in McDermott (supra),
Renusagar (supra) inter alia .
15. In Steel Authority of India Ltd vs Gupta Brothers , (2009) 10
SCC 63, the Court held that Section 34 would be attracted in cases
where an arbitrator “ travels beyond the contract ”, or makes an award
contrary to the terms of the contract ”. Section 34 however, the Court
stated, cannot be used to set aside awards in which there was an “ error
relatable to interpretation of the contract ”, or if it was based on a
possible view of the matter ”, or if it was based on a finding of law in
a case where a “ specific question of law [had been] submitted to the
arbitrator .” In short, it was not the task of the superior courts to
examine the award as though they were sitting in appeal over it. In
that case, the question was whether the breaches of contract alleged by
the respondent were covered by the clause in the contract that
contained the stipulation for damages under certain conditions. The
arbitrator had found that they were not, and this finding was
challenged. Refusing to set aside the award under Section 34, the
Court held:
“The arbitrator's view about non- applicability of Clause 7.2
for refusal to supply materials in July-September, 1988 quarter
and delayed supply of materials for October-December, 1988
quarter is founded on diverse grounds elaborately discussed in
the award. Whether this is or is not a totally correct view is
really immaterial but such view is a possible view that flows
from reasonable construction of Clause 7.2. The view of the
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arbitrator being possible view on construction of Clause 7.2,
and having not been found absurd or perverse or unreasonable
by any of the three Courts, namely , Sub-Judge, District Judge
and the High Court, we are afraid, no case for interference is
made out in exercise of our jurisdiction under Article 136 of the
Constitution… Once the arbitrator has construed Clause 7.2 in
a particular manner, and such construction is not absurd and
appears to be plausible, it is not open to the courts to interfere
with the award of the arbitrator. Legal position is no more res
integra that the arbitrator having been made the final arbiter of
resolution of disputes between the parties, the award is not
open to challenge on the ground that arbitrator has reached at
a wrong conclusion. The courts do not interfere with the
conclusion of the arbitrator even with regard to construction of
a contract, if it is a possible view of the matter.” (paragraphs 31
- 32).
16. In Associated Engineering Co. v. Government of Andhra
Pradesh (1991) 4 SCC 93 the Supreme Court observed that “if the
arbitrator commits an error in the construction of the contract, that is
an error within his jurisdiction” . In Hind Builders vs. Union of India
(1990) 3 SCC 338 the court stated that in matter in which two
interpretations of the terms of the contract are possible, it is legitimate
for the arbitrator to accept one or the other of the available
interpretations and even, if the court may think that the other view is
preferable, the resulting award cannot be set aside on the ground that it
vitiated by an error that is apparent on its face. (Ref also Uttar
Pradesh Hotels v. Uttar Pradesh State Electricity Board (1989) 1 SCC
359, Union of India v. Banwari Lal and Sons (P) Ltd. (2004) 5 SCC
304, Tarapore and Co. v. Cochin Shipyard Ltd., Cochin (1984) 2 SCC
680.
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17. In light of this legal position, the question for determination for
this Court is whether the interpretation given by the Arbitral Tribunal
is so removed from the terms of the Contract that it would warrant a
substitution of its view with that of the learned Single Judge‟s. The
relevant Clauses of the Contract are extracted here:
"VARIATIONS

52.1 The Engineer shall make any variation of the form,
quality or quantity of the Works or any part thereof that
may, in his opinion, be necessary and for that purpose, or if
for any other reason it shall, in his opinion, be appropriate,
he shall have the authority to instruct the Contractor to do
and the Contractor shall do any of the following:
a) increase or decrease the quantity of any work included in
the contract.
b) omit any such work (but not if the omitted work is to be
carried out by the Employer or by another contractor).
c) change the character or quality or kind of any such work
d) change the levels, lines, position and dimensions of any
part of the works.
e) execute additional work of any kind necessary for the
completion of the works, or
f) change any specified sequence or timing of construction
of any part of the Works.
No such variation shall in any way vitiate or invalidate the
contract, but the effect, if any, of all such variations shall be
valued in accordance with Clause 52. Provided, that where
the issue of an instruction to vary the works is necessitated
by some default of or breach of contract by the contractor
or for which he is responsible, any additional cost
attributable to such default shall be borne by the
FAO(OS) No.131/2014 Page 12



contractor."
"VALUATION OF VARIATIONS
52.1 All variations referred to in Clause 51 and any
additions to the Contract Price which are required to be
determined in accordance with Clause 52 (for the purposes
of this Clause referred to as "varied work") shall be valued
at the rates and prices set out in the Contract if, in the
opinion of the Engineer, the same shall be applicable. If
the Contract does not contain any rates or prices
applicable to the varied work, the rates and prices in the
Contract shall be used as the basis for valuation so far as
may be reasonable, failing which, after due consultation by
the Engineer with the Employer and the Contractor,
suitable rates or prices shall be agreed upon between the
Engineer and the Contractor. In the event of disagreement
the Engineer shall fix such rates or prices as are, in his
opinion, appropriate and shall notify the Contractor
accordingly, with a copy to the Employer. Until such time
as rates or prices are agreed or fixed, the Engineer shall
determine provisional rates or prices to enable on account
payments to be included in certificates issued in
accordance with Clause 60."
52.2 Provided that if the nature or amount of any
Engineer varied work relative to the nature or amount of to
Fix the whole of the works or to any part thereof, is Rates
such that, in the opinion of the Engineer, the rate or price
contained in the Contract for any item, of the Works is by
reason of such varied work, rendered inappropriate or
inapplicable, then, after due consultation by the Engineer
with the Employer and the Contractor, a suitable rate or
price shall be agreed upon between the Engineer and the
Contractor. In the event of disagreement the Engineer
shall fix such other rate or price as is, in his opinion,
appropriate and shall notify the Contractor accordingly,
with a copy to the Employer. Until such time as rates or
prices are agreed or fixed, the Engineer shall determine
provisional rates or prices to enable on-account payments
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to be included in certificates issued in accordance with
Clause 60.
Provided also that no varied work instructed to be done by
the Engineer pursuant to Clause 51 shall be valued under
Sub-Clause 52.1 or under this Sub-Clause unless, within
14 days of the date of such instruction and other than in
the case of omitted work, before the commencement of the
varied work, notice shall have been given either:
(a) By the Contractor to the Engineer of his intention
to claim extra payment or a varied rate or price, or
b) By the Engineer to the Contractor of his intention
to vary a rate or price. Provided further that no
change in the rate or price for any item contained in
the contract shall be considered unless such item
accounts for an amount more than 2 percent of the
Contract Price, and the actual quantity of work
executed under the item excess or falls short of the
quantity set out in the Bill of Quantities by more than
25 percent.
52.3 If on the issue of the Taking-Over Certificate for
Exceeding the whole of the Works, it is found that as a 15
percent result of:
(a) all varied work valued under Sub-Clauses 52.1
and 52.2, and
(b) all adjustments upon measurement of the
estimated quantities set out Bill of Quantities,
excluding Provisional Sums, day works and adjusted
price made under Clause 70.
But not form any other cause, there have been
additions to or deductions Contract Price which
taken together are in excess of 15 per cent of the
Contract, Price (which for the purposes of this Sub-
Clause shall Contract Price, excluding Provisional
Sums and allowance for daywork then and in such
event (subject to any action already taken under Sub-
Clause of this Clause), after due consultation by the
FAO(OS) No.131/2014 Page 14



Engineer Employer and the Contractor, there shall
be added to or deducted Contract Price such further
sum as may be agreed between the Contractor,
Engineer or, failing agreement, determined by the
Engineer having regard Contractor's Site and
general overhead costs of the Contract. The Engineer
notify the Contractor of any determination made
under this Sub- Clause copy to the Employer. Such
sum shall be based only on the amount by additions
or deductions shall be in excess of 15 per cent of the
Effective Price."


18. The Arbitral Tribunal held that valuation of the omitted items
was to be made under Clause 52.1, independent of Clause 52.3. This
Court is in agreement with this view. A look at the terms of the
contract would show that Clause 52.1 and 52.2 on the one hand and
52.3 on the other contemplate two different points of time in the
execution of the contract. Under 51.1, the Engineer is entitled to affect
any variation by way of addition or deletion of items from the BOQ.
Clause 52.1 mandates that such variations made during the execution
of the work must be valued at the same time, i.e. during the
subsistence of the contract , at the time of the variation itself. Clause
52.3 operates at a later point in time, i.e. at the time when the Taking
Over Certificate is issued, which necessarily contemplates the
completion of the work and the end of the Contract. It is at this time,
that all previously valued variations must be taken into account to
ascertain whether the cumulative valuation has either exceeded or
fallen below 15 percent of the price of the effective contract price. In
other words, the valuation under Clause 52.1 precedes the estimation
of the valuation vis-a-vis the effective contract price under Clause
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52.3. Clause 52.3 therefore does not function as a restriction against
the initial mandatory valuation of any variation made in the BOQ. It
operates independently of it. Clause 52 can be said to be in three steps,
(i) Clause 52.1 being the sub clause determining initial
valuations of the varied work ,
(ii) Clause 52.2 being the sub clause where when the
valuation under 51.1 is of such nature as to effect the
price of other items of the BOQ, prices of such affected
must be re-negotiated;
(iii) Clause 52.3, which leads to the aggregate estimation of
all variations at the time the work, is completed and the
contract realized.
Clearly then, 52.3 does not in any manner limit the individual
valuations made during the subsistence of the contract. In fact, the
wording of Clause 52.3 could not have made the situation clearer; it
begins with the words “if on the issue of the Taking-Over Certificate”
expressly signifying the time at which the threshold of 15% becomes
important. If this were not reason enough, Clause 52.3 itself clearly
refers to the valuation of the variation having already been carried out
under Clause 52.1 and 52.2 by employing the words “all varied work
valued under Sub-Clauses 52.1 and 52.2” .
19. NHAI had cited JSC Centrodostroy v. National Highways
Authority of India FAO (OS) No. 508/2013, decided on 10.01.2014 as
an authority for the application of Clause 52.3. The terms of the GCC
in that case no doubt are identical to the ones we are confronted with
the facts of that case are clearly distinguishable. In that case, the
FAO(OS) No.131/2014 Page 16



appellant claimed compensation under Clause 52.2, a claim that was
been rejected by both the Arbitral Tribunal and the learned Single
Judge. Before the Division Bench, the appellant had averred that the
variation in the items of the BOQ entitled it to compensation for loss
of margin. In the affirming decision, upholding the award and the
decision of the Single Judge, the Division Bench agreed with the
Arbitral Tribunal‟s rejection of the claim on the ground that Clause
52.2 was never meant as a claim for compensation but one for re-
fixation of the originally stipulated rates for the items of the subject
work in the event that the variation was of such magnitude to render
these original rates as inappropriate or inapplicable. This is in
contradistinction of Clause 52.1, which essentially does function as a
ground for claim of compensation for varied items. Moreover in that
case, the claim was in the context of the Taking Over Certificate,
thereby justifying the application of Clause 52.3. Clearly therefore, in
that case, neither was Clause 52.1 ever made the basis for the claim, as
is in the case at hand, nor was the claim made during the pendency of
the subject work. Therefore, that judgment cannot be relied on to
further NHAI‟s argument, in the present instance.
20. For these reasons this Court holds the award of the Arbitral
Tribunal as plausible and are resultantly unable to treat Clause 52.3 as
a stipulation, which conditions that compensation for a variation in
terms of Clause 52.1 too will be paid only when the valuation crosses
the threshold of either a 15% increase or decrease.
21. As a postscript, this Court believes that it is imperative to sound
a word of caution. Notwithstanding the considerable jurisprudence
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advising the Courts to remain circumspect in denying the enforcement
of arbitral awards, interference with the awards challenged in the
petitions before them has become a matter of routine, imperceptibly
but surely erasing the distinction between arbitral tribunals and courts.
Section 34 jurisdiction calls for judicial restraint and an awareness that
the process is removed from appellate review. Arbitration as a form of
alternate dispute resolution, running parallel to the judicial system,
attempts to avoid the prolix and lengthy process of the courts and
presupposes parties consciously agreeing to submit a potential dispute
to arbitration with the object of actively avoiding a confrontation in
the precincts of the judicial system. If a court is allowed to review the
decision of the arbitral tribunal on the law or on the merits, the speed
and, above all, the efficacy of the arbitral process is lost.
For the reasons discussed previously, the impugned judgment and
order of the Learned Single Judge is set aside and the award of the
Tribunal dated 24.02.2013 is affirmed. The appeal is allowed in the
above terms.


S. RAVINDRA BHAT
(JUDGE)


DEEPA SHARMA
(JUDGE)
NOVEMBER 2, 2015

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