Additional work attracts no compensation when contractual preconditions for approval are unmet.

NATRIP Implementation Society engaged D. S. Partnership (“Petitioner”) under Contract-I dated 7 August 2009 to provide consultancy services for evaluating and validating designs of utilities forming part of civil works, for a capped consideration of GBP 71,200 and an allocation of 520 man-hours.

The parties subsequently entered into Contract-II dated 13 April 2010, a lump-sum contract for detailed mechanical and electrical utility designs for GBP 119,500.

During Contract-II, the Petitioner undertook additional work concerning modifications to existing utility designs, harmonisation of utilities, and changes to General Arrangement drawings.

NATRIP disputed liability, contending that the work was either included within Contract-II or had been undertaken without the prior written approval required by Clause 8.2 of Contract-I.

The three-member Arbitral Tribunal rejected NATRIP’s jurisdictional objection and held that the dispute substantially arose under Contract-I.

The Tribunal also rejected the alternative claim based on quantum meruit under Section 70 of the Indian Contract Act, 1872.

The Petitioner challenged the award dated 2 April 2016 under Section 34 of the Arbitration and Conciliation Act, 1996.

Whether the Arbitral Tribunal’s finding that the Petitioner was not entitled to payment for additional work, due to non-compliance with the prior written approval requirement under Clause 8.2 of Contract-I, warranted interference under Section 34 of the Act.

Whether the communications, meetings, and conduct of NATRIP’s officials constituted prior written approval, waiver, or acquiescence sufficient to satisfy Clause 8.2 of Contract-I.

Whether the Tribunal’s findings concerning the non-raising of proforma invoices under Clause 8.3 warranted interference under Section 34.

Whether the Petitioner was entitled to compensation on a quantum meruit basis under Section 70 of the Indian Contract Act, 1872, notwithstanding the express contractual procedure governing additional work.

Whether the award conflicted with the public policy of India, including the fundamental policy of Indian law or the most basic notions of morality or justice.

The Court applied Section 34(2)(b)(ii) of the Arbitration and Conciliation Act, 1996, including Explanations 1 and 2, under which an award may be set aside on public-policy grounds only if it involves fraud or corruption, contravenes the fundamental policy of Indian law, or conflicts with the most basic notions of morality or justice; review on the merits is impermissible.

Since the arbitration was an international commercial arbitration, the additional ground of patent illegality under Section 34(2A) was unavailable.

Relying on OPG Power Generation (P) Ltd. v. Enexio Power Cooling Solutions (India) (P) Ltd., Ssangyong Engineering & Construction Co. Ltd. v. NHAI, and related authorities, the Court held that mere legal or factual error, contractual misinterpretation, or an alternative possible view does not justify interference, absent a violation of fundamental legal principles or elementary justice.

Section 18 requires equal treatment of parties, while Section 28(3) requires the Tribunal to take the contract and applicable trade usages into account.

Under Section 70 of the Indian Contract Act, quantum meruit requires, inter alia, lawful non-gratuitous work, absence of an operative contractual provision governing the work, acceptance of the work, and appropriate pleadings; the doctrine cannot be used to override express contractual terms, as recognised in Alopi Parshad & Sons Ltd. v. Union of India and Mahanagar Telephone Nigam Ltd. v. Tata Communications Ltd.

The Court held that performance of additional work and entitlement to remuneration were distinct questions; payment depended on compliance with the contractual conditions governing additional work.

Clause 8.2 required prior written approval before proceeding with work likely to exceed the 520-hour allocation, and the expression “shall necessarily take prior written approval” made the requirement mandatory.

The Tribunal found that no such approval had been obtained from Mr. Y.V. Narsimha Rao, the authorised representative under Contract-I.

Its treatment of communications involving officials designated under Contract-II, and discussions with other senior officials, involved factual appreciation of the evidence.

Reconsidering whether those communications amounted to approval, waiver, or acquiescence would impermissibly require re-appreciation of evidence under Section 34.

The same reasoning applied to the Tribunal’s finding that the required proforma invoices had not been raised in advance under Clause 8.3(iii).

Because Contract-I expressly governed additional work and prescribed the approval procedure, quantum meruit could not be invoked to bypass that procedure.

Even if the Tribunal’s legal view were erroneous, the alleged error did not amount to a contravention of the fundamental policy of Indian law or a conflict with the most basic notions of morality or justice.

They did not disclose any violation of natural justice, fundamental policy of Indian law, or the most basic notions of morality or justice.

As patent illegality was unavailable in an international commercial arbitration and no ground under Section 34(2)(b)(ii) was established, the petition challenging the award was dismissed.

All pending applications, if any, were also disposed of.