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Section 34 of the Arbitration Act stipulates that any person aggrieved by an arbitral award can file an application seeking setting aside of the arbitral award: High Court Of New Delhi.

The petitioner has filed the present petition under Section 34 of the Arbitration and Conciliation Act, 1996, and the same issue was held in the judgement passed by a single bench judge comprising HON’BLE MR JUSTICE VIBHU BAKHRU, in the matter GVK JAIPUR EXPRESSWAY PRIVATE LIMITED V. NATIONAL HIGHWAY AUTHORITY OF INDIA dealt with an issue mentioned above.

The impugned award was rendered in the context of disputes that had arisen between the parties in connection with the Concession Agreement dated 08.05.2002, The petitioner’s also claimed for the cost of constructing additional toll lanes was rejected as the Arbitral Tribunal, were inter alia, found that the same was covered within the ‘scope of work’ under the Concession Agreement and, the petitioner was not entitled to any further payment in respect of the same.

The petitioner contends that the said view is patently erroneous and disregards the express terms of the Concession Agreement. Later, the obligations of the petitioner under the Concession Agreement did not end with the issuance of the Final Completion Certificate. It was also required to operate and maintain the Project Highway in terms of the said Concession Agreement. The project review meetings were held between the parties periodically and, the issue of increase in traffic volume was discussed at the said meeting.

The IC sent a letter dated 03.07.2012, inter alia, stating that since the Project Highway had already been completed with COD on 09.04.2005, the petitioner’s proposal could not be considered as additional work under the provisions for ‘change of scope’ under Article XVII of the Concession Agreement, And the petitioner did not concur with the aforesaid view and requested the IC to reconsider the same. The IC thereafter sought legal O.M.P. (COMM) 377/2020 opinion on the question of whether the ‘change of scope notice’ was required under Clause 17.2(b) of the Concession Agreement.

Meanwhile, a letter dated 30.10.2012, which was filed by the petitioner, once again, requested a ‘change of scope’ notice in terms of its proposal submitted earlier. NHAI did not concur with the said suggestion. According to NHAI, the petitioner was responsible for the smooth operation of the toll plaza and was required to take all measures for the same. They also mentioned that the parties attempted to resolve their disputes amicably but were unsuccessful and the disputes were referred to arbitration. The parties had agreed that the arbitration shall be conducted following the rules of the Indian Council of Arbitration (ICA), New Delhi. In terms of the Arbitration Clause, the respondent nominated an arbitrator.

Mr Sarangi, learned counsel appearing for the petitioner that the impugned award is vitiated on the ground of patent illegality as it is contrary to terms of the Concession Agreement and particularly Clause 18.4 of the Concession Agreement. He submits on a plain reading of the Concession Agreement, it is clear that the construction of additional toll lanes was not a part of the scope of works. Later He also contends that although the petitioner had relied upon Clause 18.4 of the Concession Agreement in support of its contention, the Arbitral Tribunal had completely disregarded the same and the O.M.P. (COMM) 377/2020 impugned award does not even mention the said clause and therefore, the impugned award is unreasoned.

Mr Chandra learned counsel for NHAI also fairly stated that the finding of the Arbitral Tribunal that the construction of additional toll lanes/booths fell within the scope of work under the Concession Agreement was at the core of the controversy in this petition. Thus, the decision on whether the finding is contrary to the terms of the Concession Agreement would be dispositive of the present petition.

Because of the above, there was merit in the petitioner’s contention that since one of the principal contentions advanced by the petitioner regarding the interpretation of Article XVIII of the Concession Agreement has not been considered and the impugned award rests substantially on the interpretation of a sub-clause of Article XVIII of the Concession Agreement; the award must be construed to be unreasoned.

The court perused the facts and argument’s presented, it thought that-“In the aforesaid context, this Court is of the view that the impugned award is contrary to the expressed terms of the contract as it ignores Clause 18.4 of the Concession Agreement, which expressly provides that extension of pavements or ‘other civil works’ would not be included as a part of maintenance unless such construction is a part of the project. There is no clause in the Concession Agreement, which specified the construction of additional toll lanes as a part of the project. Because of the above, the impugned award is set aside. The petitioner is at liberty to seek a reference of the disputes to arbitration. The petition is allowed in the aforesaid terms”.

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Judgment Reviewed by: Mandira BS

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