Limited Section 34 review sustains arbitral escalation and prolongation claims where delay is attributed to the employer.

Section 34 interference remains limited to cases where the arbitral tribunal's view is impossible, perverse, or contrary to contract or substantive law. Applying that standard, the Delhi HC noted that the tribunal had found, on facts, that delay in completion was attributable to the employer and that the contractor's no-claims endorsement was given in compelling circumstances; that finding was not shown to be patently illegal. The court also accepted that, even without an express escalation clause, compensation for increased labour and material costs may be sustained where delay is caused by the other party, and the tribunal's construction of the contract and evidence was possible and plausible.

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Issues: Whether the arbitral award suffered from patent illegality in allowing claims for escalation and prolongation of contract, and in treating the contractor's no-claims endorsement as involuntary and unenforceable.

Analysis: The scope of interference under Section 34 of the Arbitration and Conciliation Act, 1996 is narrow, and an award can be set aside only where the tribunal's view is impossible, perverse, or contrary to the contract or substantive law. The tribunal found, on facts, that the delay in completion was attributable to the petitioner and that the contractor's endorsement while seeking extension of time was issued in compelling circumstances. The court held that such a factual finding was not shown to be patently illegal. It further held that even in the absence of an express price-escalation clause, compensation for increased labour and material costs could be awarded where delay was caused by the other contracting party, and the view taken by the tribunal was a possible and plausible construction of the contract and the evidence.

Conclusion: The challenge to the award failed. The arbitral award was upheld, including the awards on escalation and prolongation-related claims.

Ratio Decidendi: Under Section 34, an arbitral award will not be interfered with if the tribunal adopts a possible and plausible view on contractual interpretation and factual attribution of delay, and compensation for breach-induced escalation costs may be sustained even without an express escalation clause.

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