Section 34 courts cannot reappreciate evidence where the arbitral award reflects a plausible view.

The dispute arose from a design-and-construction contract awarded by the Delhi Development Authority (“DDA”) to M/s Simplex Infrastructure Ltd. for construction of a Road Over Bridge and half-trumpet interchange at the intersection of Pankha Road and Station Road.

The stipulated completion date was 24 November 2003, but the work was completed on 24 November 2005, resulting in approximately two years’ prolongation.

The contractor attributed the delay to DDA-related hindrances, including delayed approvals, non-availability and delayed handing over of sites, shifting of utilities and other impediments recorded in the hindrance register and extension-of-time records.

DDA challenged the arbitral award dated 14 October 2008 under Section 34 of the Arbitration and Conciliation Act, 1996, contending that the Arbitrator had incorrectly interpreted the contract, wrongly attributed delay to DDA and awarded amounts allegedly barred by the contractual provisions.

Whether the Arbitrator’s awards under the various sub-claims of Claim No.1 for additional works and related expenditure were liable to be set aside under Section 34 of the Arbitration and Conciliation Act, 1996.

Whether the Arbitrator correctly attributed the delay and resulting prolongation costs under Claim No.2 to DDA, notwithstanding the contractual provisions relied upon by DDA.

Whether the consequential awards for renewal of bank guarantees and insurance, land rent and other extended-period expenses under Claims Nos.3, 4 and 14 were sustainable.

Whether compensation for increased steel and construction-material prices could be awarded despite deletion of the contractual escalation clause.

Whether the contractor was entitled to reimbursement of labour cess imposed after submission of its bid under Additional Claim No.16.3.

Whether the Arbitrator’s award of interest at 12% per annum was permissible under Section 31(7) of the Act.

The Court applied Section 34 of the Arbitration and Conciliation Act, 1996, under which judicial review of an arbitral award is limited and the Court cannot act as an appellate court or reappreciate evidence merely because another view is possible.

Interference is justified only on recognised grounds such as patent illegality, perversity, conflict with the public policy of India, jurisdictional error or other fundamental infirmity.

The Court relied on the principle recognised in Associate Builders v. Delhi Development Authority, (2015) 3 SCC 49, that an employer responsible for prolongation may be liable for the resulting loss and that contractual restrictions on monetary claims for delay do not necessarily bar damages arising from the employer’s own breach.

It also considered P.M. Paul v. Union of India, AIR 1989 SC 1034, for the proposition that additional costs caused by employer-attributable prolongation may be recoverable as damages even in the absence of an escalation clause.

Section 31(7) was applied to recognise the Arbitral Tribunal’s statutory power to award interest, subject to any contractual exclusion or restriction.

The Hudson Formula was treated as the basis adopted by the Arbitrator for assessing prolongation costs.

The Court held that the Arbitrator’s findings on the additional works were factual and technical determinations based on correspondence, approved revised drawings, site conditions and evidence before the Tribunal.

The labour-colony claim was supported by DDA’s absence of contemporaneous objection, the presence of its officers and subsequent permission to reconstruct the huts, making tacit approval a possible factual inference.

The additional piling, enlarged pile caps, manhole protection and testing-cost claims were similarly based on technical material and work executed pursuant to approved or necessary modifications; DDA’s alternative interpretation of the contract did not establish perversity or patent illegality.

With respect to prolongation, the Court found that the Arbitrator had relied on DDA’s own hindrance register, extension-of-time records and contemporaneous documentation to conclude that DDA had failed to provide clear and unhindered access to the site within the contractual period.

Once DDA-attributable prolongation was accepted, the related costs of maintaining resources, bank guarantees, insurance, labour arrangements and site occupation were treated as consequential losses.

The deletion of the escalation clause did not, by itself, exclude damages caused by DDA’s breach and the Arbitrator had confined the escalation awards to the period of prolongation and considered supporting material.

The labour-cess award was also upheld because the bid preceded the relevant statutory change, making the Arbitrator’s view that the levy could not reasonably have been included in the tendered rates at least a plausible one.

Finally, the interest award was not shown to be contractually prohibited, unreasonable or excessive, and was therefore sustainable under Section 31(7).

It held that the Arbitrator’s conclusions on additional works, DDA-attributable delay, prolongation costs, consequential expenses, escalation, labour cess and interest represented plausible and evidence-based views.

DDA failed to establish patent illegality, perversity, violation of public policy, jurisdictional error or any other ground for interference under Section 34.

Accordingly, the petition under Section 34 was dismissed, and the arbitral award dated 14 October 2008 was upheld, along with all pending applications.