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2019 (4) TMI 2160 - HC - Indian LawsValidity of arbitral award - resolution of disputes by way of arbitration - Breach of Contract - non usage of road - Payment of interest from the date of submission of the claims to the sole arbitrator till the date of actual payment - HELD THAT - AT on a thorough analysis of documentary evidence before it and on the basis of oral hearings, had come to the conclusion that main responsibility of contractor was supervision of construction work to ensure that work is executed as per approved design, desired quality and within the stipulated time, besides bill certification, contract management and reporting. AT has also observed that from the duties and responsibilities assigned to contractor, it comes to light that role of the contractor was more or less same as that of a Project Management Consultant (PMC) . Thereafter, AT had returned a finding that RSP had no serious complaint with regard to these duties and complaint of RSP was primarily pivoted on the plank that contractor had not reviewed the design to the entire satisfaction of RSP, i.e., for successful completion of the project. This Court has also reminded itself of Hodgkinson principle. Hodgkinson principle has been explained by Hon'ble Supreme Court in the oft-quoted and celebrated Associate Builders case being Associate Builders Vs. Delhi Development Authority 2014 (11) TMI 1114 - SUPREME COURT . Hodgkinson principle in simple term means that AT is the best judge with regard to quality and quantity of evidence before it. This coupled with Vedanta principle if put in the form of a theorem would translate into 'as long as interpretation of covenant in a contract by AT is a possible view and as long as it is based on reasonable construction, the Court will not interfere under section 34'. In this view of the matter, this court is unable to persuade itself to believe that there is infarction of sub section (3) of section 28. To put it differently, this Court is unable to persuade itself to hold that AT has not decided in accordance with the terms of contract. This court has no hesitation in holding that the instant O.P is liable to be dismissed.
Issues Involved:
1. Breach of Contract 2. Non-usage of Road 3. Payment of Interest 4. Contractor's Entitlement for Services Rendered 5. Interpretation of Contract Clauses Detailed Analysis: Breach of Contract: The primary issue was whether the contractor breached the contract by failing to review the design and bid documents. The Arbitral Tribunal (AT) concluded that the contractor was required to review the design and bid documents that were already approved by the claimant. The AT found that the contractor failed to perform its principal duty of reviewing the design, thereby breaching the contract. The AT awarded Rs. 1,41,42,656/- to the claimant for this breach, rejecting the contractor's argument that they were not required to review the design. Non-usage of Road: The claimant sought Rs. 14,72,92,500/- for the non-usage of the road for 41 months. The AT rejected this claim, finding no basis for the claimant's assertion that the contractor was responsible for the non-usage. Payment of Interest: The AT awarded 8% pendent lite interest and 12% per annum future interest to the claimant. The contractor contested this, arguing that the award was not made in accordance with the terms of the contract. However, the court upheld the AT's decision, finding no merit in the contractor's argument. Contractor's Entitlement for Services Rendered: The contractor claimed Rs. 1,21,46,704/- for services rendered, Rs. 21,36,489/- for additional services, Rs. 20,00,000/- for arbitration costs, and Rs. 3,89,676/- for other expenses. The AT awarded Rs. 75,50,082/- for services rendered but rejected the other claims. The court upheld the AT's decision, finding that the AT had appropriately assessed the claims based on the evidence presented. Interpretation of Contract Clauses: The contractor argued that the AT misinterpreted clauses 6.2.1 and 11.2 of the contract. The court found that the AT's interpretation of these clauses was a possible view based on a reasonable construction of the contract terms. The court cited the Supreme Court's decision in MMTC Ltd. Vs. Vedanta Ltd., emphasizing that the interpretation of contract terms falls within the arbitrator's jurisdiction. The court concluded that the AT's interpretation was reasonable and declined to interfere with the award. Conclusion: The court dismissed the petition, finding no grounds for judicial intervention under Section 34 of the Arbitration and Conciliation Act, 1996. The court held that the AT's award was based on a reasonable interpretation of the contract and the evidence presented. The contractor's arguments regarding the interpretation of contract clauses and the alleged breach of contract were rejected. The court also upheld the AT's decision on the payment of interest and the contractor's entitlement for services rendered. The parties were directed to bear their respective costs.
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