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Issues: (i) Whether the arbitral award was liable to be set aside for refusing to permit amendment of the defence and for not adjudicating the challenge based on suppression of initiation of CIRP against the lead consortium member, thereby affecting the validity of the contract and arbitration agreement; (ii) Whether the award could stand when the claims were decided without oral evidence and the findings were not supported by discussion of documentary evidence.
Issue (i): Whether the arbitral award was liable to be set aside for refusing to permit amendment of the defence and for not adjudicating the challenge based on suppression of initiation of CIRP against the lead consortium member, thereby affecting the validity of the contract and arbitration agreement.
Analysis: The challenge to the contract went to the root of the dispute because it raised the question whether the tender, award and resulting contract were procured by suppression and false disclosure regarding insolvency proceedings against the lead consortium member. The request to amend the defence was made after the petitioner claimed discovery of the true CIRP position, and the amendment was relevant to the foundational issue of validity of the contract and the arbitration agreement. The refusal to permit the amendment prevented adjudication of a vital defence and resulted in the tribunal deciding jurisdiction and merits without first examining the effect of the alleged suppression.
Conclusion: The refusal to entertain the defence was unsustainable and was against the petitioner.
Issue (ii): Whether the award could stand when the claims were decided without oral evidence and the findings were not supported by discussion of documentary evidence.
Analysis: The tribunal decided disputed questions of delay, breach, entitlement to damages, and several monetary claims without oral evidence and without properly correlating its findings to specific documents on record. The conclusions were recorded in broad terms and, in several instances, by arithmetic or general assertions rather than by evaluation of proved material. In the absence of evidence supporting the essential factual findings, the award suffered from perversity and patent illegality.
Conclusion: The award could not be sustained and was against the petitioner.
Final Conclusion: The arbitral award was set aside in its entirety because the proceedings were conducted on an erroneous procedural basis and the findings on material issues were found unsustainable.
Ratio Decidendi: An arbitral award is liable to be set aside where a party is wrongly prevented from raising a foundational defence going to the validity of the contract and the award is founded on disputed facts without proof by evidence or meaningful consideration of the record.
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