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TMI Blog2022 (6) TMI 1356X X X X Extracts X X X X X X X X Extracts X X X X ..... rd dated 13th April, 2018 had awarded a net sum of Rs.3,04,91623/- along with interest in favour of the respondent-M/s H.R. Builders (hereinafter referred as HRB"). 3. The factual matrix in which the dispute has arisen is that the Government of National Capital Territory of Delhi (hereinafter referred to as "GNCTD‟) launched a Project for Refurbishment and Upgradation of 198 schools run by the GNCTD. The implementation of part of the project was entrusted to DSIIDC. DSIIDC invited tenders on 08 th July, 2009 for the entire work including electrical and civil work for 25 schools which were part of the project. The bid of HRB was accepted and a Letter of Acceptance (LoA) was issued awarding the work of "Integrated Infrastructure Development of Delhi Govt. Schools" under the subhead "Improvement and Upgradation of 25 Government Schools Buildings in North West 'A' District (Composite Work)". The work was to commence on 28th September, 2009 and was stipulated to be completed on or before 27th September, 2010. A formal Agreement dated 30th September, 2009 was entered into between the parties for execution of the work. Twenty three schools were handed over by DSIIDC instead ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not exceed the amount of claim as had been referred. 7. HRB then filed an application under Section 23(3) of the Act 1996 on 26th August, 2017 praying that it may be permitted to amend its Claim Nos.1 and 9 in the Statement of Claim in the aforesaid terms. The proposed amendment was opposed by DSIIDC. The Arbitral Tribunal vide its order dated 27th September, 2017 allowed the HRB to pursue its Claim No.9 in regard to the costs but declined the amendment of Claim No.1 to enhance the claim value. 8. HRB preferred a petition under Article 227 of the Constitution of India being CM(M) No.1458/2017 titled M/s HR Builders vs. DSIIDC before this Court. While the petition was pending, the Arbitral Tribunal rendered the impugned award dated 13th April, 2018 directing DSIIDC to pay Rs.3,04,91,623/-to the respondent and dismissed the counter claim of DSIIDC in the sum of Rs.20,05,00,000/-. Consequently, HRB withdrew its petition on 10th July, 2018 with liberty to agitate its grievances in its petition under Section 34 of the Act 1996. 9. The objections were filed under Section 34 of the Act, 1996 vide Petition No. OMP (COMM) 324/2018 in respect of the Order dated 27th September, 2017 disall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Agreement. 14. The findings in regard to compensation awarded to the HRB by the Arbitral Tribunal has also been challenged as being patently erroneous on the ground that overheads were agreed to constitute 15% of the incremental value and not 15% in excess of labour and material component as set out in Schedule 7 of the Agreement. The award of any amount in excess of 15% of the incremental value on the basis of labour and material component by the Arbitral Tribunal was completely beyond the terms of the Agreement and inconsistent with the law laid down by Hon'ble Division Bench of Supreme Court in the case of State of Rajasthan Vs. Nav Bharat Construction Co. (2006) 1 SCC 86, wherein it was observed that an Arbitrator cannot go beyond the terms of the contract and in the guise of doing justice, an Arbitrator cannot give an award contrary to the terms of the contract. Reliance has also been placed on the decision of Hon'ble Supreme Court in Bharat Coking Coal Ltd. Vs. L.K. Ahuja and Co. (2001) 4 SCC 86; Continental Construction Co. Ltd. Vs. State of M.P. (1988) 3 SCC 82. 15. Moreover, the dismissal of the counter claim of the DSIIDC by the Arbitral Tribunal was also patent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) Whether the disputes are capable of adjudication and settlement by arbitration? ii) Whether the disputes are covered by the Arbitration Agreement? iii) Whether the parties have referred the disputes to arbitration?" 20. Arbitration being a matter of contract, the parties are entitled to fix the boundaries so as to confer and limit the jurisdiction and legal authority of the arbitrator. An arbitration agreement can be comprehensive and broad to include any dispute or can be confined to specific disputes. The scope of arbitrator's jurisdiction invariably arises when the disputes that are arbitrable are enumerated or the arbitration agreement provides for exclusions as in case of "excepted matters" which are the matters where the parties expressly exclude certain disputes to be referred to arbitration in respect of which the Arbitral Tribunal may not have jurisdiction to adjudicate such disputes. The will of the parties as to the scope of arbitration is a subjective act personal to the parties. 21. In Vidya Drolia (supra) a reference has been made to the dictum of Constitutional Bench Judgment in SBP & Company Vs. Patel Engineering Ltd. & Anr. (2005) 8 SCC 618 and it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se 2; one is whether contractor has failed to maintain the required progress or complete the project within time and the second question is that in case there is delay or prolongation, what is the compensation payable to the party? 24. In terms of Clause 2, it is clearly stipulated that the authority as specified under Schedule F of the Agreement is empowered to calculate the compensation payable at the specified rate if the contractor fails to complete the work and clear the site as agreed. The decision of the specified Authority in regard to the computation of compensation is final and complete and is excluded from the scope of arbitration clause. However, the compensation becomes leviable only on account of delay. Whether HRB was responsible for delay in maintaining the required progress and completion of the works within the stipulated period was a question which is arbitrable and has been discussed by the Arbitrator in the impugned award. 25. The Arbitral Tribunal accepted the contention of HRB that the delay had to be viewed on an overall basis as milestones were also fixed in relation to financial terms and no specified period had been stipulated for separate school or sep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n execution and who committed breach is not made subject to any decision of the respondents or its officers, nor excepted from arbitration under any provision of the contract. 15. In fact the question whether the other party committed breach cannot be decided by the party alleging breach. A contract cannot provide that one party will be the arbiter to decide whether he committed breach or the other party committed breach. That question can only be decided by only an adjudicatory forum, that is, a court or an Arbitral Tribunal." 28. In M/s Mitra Guha India (Co.) (supra) similar clause empowering the Superintending Engineer to decide on the contract value for the whole week where the work remained un-commenced and un-finished was considered. The said clause also provided the milestones of the work to be followed and provided the portion of the work to be completed in case the time allowed for completing the work exceeded one month. The Supreme Court found that the relevant clause provided a complete mechanism for determination of liability as well as the quantum and held that the same was beyond the scope of arbitration clause in that case. 29. The learned Single Judge has obse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o contractor could cushion his quoted rates to cater to such extended period. The Arbitral Tribunal thus, concluded that since major part of the delay resulted in prolongation which was attributable to the DSIIDC, the HRB was entitled to escalation. The learned Single Judge again upheld the conclusion of the Arbitral Tribunal as well reasoned and had considered the indices adopted by Director General, CPWD to be more appropriate and had accordingly moderated the amount claimed by the HRB considering the time for completion of work far exceeded the initial period as contemplated under the Agreement, the Arbitral Tribunal's decision to award escalation on the basis of indices published by CPWD were held to be not perverse or unreasonable. Again, the learned Single Judge concluded that awarding of escalation in favour of the HRB, also does not suffer from any perversity and is based on the appreciation of the facts. 34. A sum of Rs.48,45,700/- which was awarded by the Tribunal as overheads on account of prolongation of works, was also challenged. The reasoning given by the Arbitral Tribunal while allowing this claim, was that HRB was required to be compensated for the prolongatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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