Delhi HC Upholds ₹30.9-Lakh And ₹32-Lakh Awards To DDA Contractor, Finds 1995 Arbitration Invocation Timely

The plaintiff contractor entered into two DDA construction agreements in 1985. Although the stipulated completion date was 23 October 1986, the works were extended until October 1990 without levy of compensation. The DDA prepared the final bill on 31 May 1995.

The plaintiff had invoked arbitration on 22 August 1995; after the first arbitrator adjourned proceedings sine die, a successor arbitrator was appointed in 2007, and the DDA referred additional claims that year.

The awards dated 31 January 2008 and 28 January 2008 allowed the plaintiff’s claims in part. The DDA objected under Sections 30 and 33 of the Arbitration Act, 1940, principally challenging the limitation, validity and merits of specified claims, and the arbitrator’s authority to award interest.

Sections 14 and 17 of the Arbitration Act, 1940 provide for filing an award and making it a rule of court; Sections 30 and 33 confine challenges to recognised grounds such as misconduct or an error apparent, and do not permit an appellate reappraisal of evidence.

Under Section 28, the court may enlarge the time for making an award; parties may also consent to enlargement after the arbitrator enters the reference, as explained in Hari Krishna Wattal v. Vaikunth Nath Pandya (1973) 2 SCC 510.

A party that participates in arbitration and acquiesces in the proceedings may be precluded from later challenging them on a known ground: Prasun Roy v. Calcutta Metropolitan Development Authority (1987) 4 SCC 217.

Where an arbitrator takes a possible view on the evidence and contract, the court should not interfere merely because another view is available: NTPC Ltd. v. Deconar Services (P) Ltd. (2021) 19 SCC 694 and Arosan Enterprises Ltd. v. Union of India (1999) 9 SCC 449.

The court also relied on the contractual time limits in Clauses 7 and 25, the parties’ consent provision in Clause 25A, and the principle that an arbitrator may award interest under the 1940 Act absent a contractual bar, as recognised in State of Orissa v. G.C. Roy (1992) 1 SCC 508.

The court upheld the arbitrator’s conclusion that the 1995 invocation was within Clause 25’s 90-day period following the final bill, and that the subsequent appointments and 2007 reference continued the original arbitration rather than commencing a new one.

The DDA’s later payments and recoveries, the absence of a full-and-final settlement, and the correspondence supported the arbitrator’s view that Clause 7 did not bar the claims.

The DDA had jointly consented to enlargement of time and participated in the proceedings, so its Section 28 objection failed.

On the merits, the court found the arbitrator’s awards on steel cutting and straightening, prolongation expenses, watch-and-ward charges, interest, and the refund claim in CS(OS) 362/2008 to be plausible views grounded in the record and the agreements.

The objections did not establish that the arbitrator ignored material evidence, exceeded the contractual terms, or committed legal misconduct; a new contractual objection not raised before the arbitrator could not be introduced for the first time in the court proceedings.

It dismissed IA Nos. 4749 and 4753 of 2008, made the awards dated 31 January 2008 and 28 January 2008 rules of court, directed that decrees be drawn accordingly, and disposed of both suits.