TaxTMI 
TaxTMI 
2024 (4) TMI 425
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....rent items. The contractor urged that this was contrary to the technical specification (hereafter "TS") Clause 305.8; the National Highways Authority of India (hereafter "NHAI") justified the EE's interpretation. Since there have been different outcomes in all these appeals, and the impugned judgments in some of them have relied upon the judgment of the Division Bench of the Delhi High Court, in CA 4658/2023 [Arising out of SLP No. 38162/2012, which was directed against the judgment of the Division Bench of the Delhi High Court dated 08.11.2012 in FAO (OS) No. 48/ 2012] (hereafter referred to as "the main judgment") the facts and decisions, in that appeal would be alluded to. 2. NHAI awarded, to the contractor the work of construction of the Allahabad by-pass project in U.P. by agreement dated 02.06.2004. The project was completed. However, certain disputes arose inter se the parties with reference to different areas of the contract; these were referred to arbitration. NHAI has an inbuilt resolution mechanism, i.e., a Dispute Resolution Board ("DRB") consisting of technical experts in the field, to which matters are first referred to. Since the contractor was not satisfied w....
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..... We cannot permit the Respondent to contend that it is not possible to compute the volumes of the two materials in the cross section, when for 30 months both the Appellant and the Respondent were actually making measurements accordingly. The Respondent itself made the Indian Penal Codes and submitted for payments which were duly paid by the Appellant. Such measurements were made on the basis of actual utilization of the two materials. We fail to appreciate how the arbitral tribunal could have come to a conclusion that the mode of measurement of the two items separately was not in accordance with the contract. The majority view, after having noticed the principles of consensus ad idem, seems to have failed to appreciate this vital issue.[..]" Contentions of parties 5. On behalf of the Appellant/contractors, Dr. Abhishek Manu Singhvi, Mr. V. Giri, and Mr. Anil Airi, learned Senior Counsels, Mr. Sameer Parekh and Mr. George Thomas learned Counsel made submissions. It was argued that the impugned judgment goes far beyond the scope of the jurisdiction Under Section 34 /Section 37 of the Act. The Division Bench while interfering with the award on the grounds that it did, transgres....
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..... Counsel submitted, that furthermore, the impugned judgment overlooked that the TS Clause 305 of MoRTH dealt only with embankment with soil; therefore a project specific Sub-clause 305.2.2.3.2 of the construction operations, was included in the contract which specifies the various operations (viz., setting out, stripping and storing of top soil, compacting ground supporting embankment, spreading material, compaction, finishing, quality control, a measurement for payment etc) to be followed by the contractor for embankment with pond ash. It was submitted that Clause 305.2.2.3.2 further provides, "the work shall conform to Clause 4.7.l of IRC SP:58 - 2001". It was highlighted that the contract contemplated payment for 'construction of earth embankment with soil' in BOQ [Bill of Quantities] item 2.02(a) and 'construction of Pond ash embankment with pond ash' in BOQ item No. 2.02. It was also contended that BOQ pertains to the execution and completion of the entire item of work in compliance with the contract requirements and does not relate only to any individual material/consumables used in the execution of the work. 10. It was argued that the contract conditions ....
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....sed for the work. Learned Counsel highlighted that embankment construction can involve varied ratios of such materials - ranging from 9:1 to 3:2 at different locations. Therefore, the Division Bench correctly held that it would not be justified to cast this liability upon the NHAI. 13. It was also highlighted that the tribunal and the learned Single Judge erred in improperly analyzing the stipulations and conditions in the contract. Clauses 2.02(a) and (b) reveal that there is only BOQ Item, i.e., embankment. The separate treatment in the stipulation only meant that the embankment could be constructed one way, where the soil was used and second, where both soil and pond ash was used. Learned Counsel submitted that in terms of Clause 305.8 of the technical specifications, cross-sections had to be quantified proportionately. The ASG further highlighted that for two years, separate measurements were taken and consequently it was incorrect to contend that separate measurements for both the materials were not possible. It was further argued that embankment work with pond ash and soil is completed by layering wherever concerned materials are necessary and easily capable of measurement....
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....bsp;Technical Specifications Clause 305 with all leads and lifts a) With Soil CuM 1198000 Rs. One hundred and two only. 102 Rupees twelve crore, twenty one lakhs ninety six thousand only 122,196,000 b) With Pond Ash CuM 3252000 Rs. Two hundred and fifty two only 252 Rupees eighty one crore ninety five lakhs four thousand only 819,504,000 16. For pond ash embankment under BOQ item No. 2.02(b), the relevant stipulation for measurement and payment are Clause 305.8 and Clause 305.2.2.3.3 of additional technical specifications, respectively. The said clauses are extracted below. The MoRTH specification reads as follows: "305.8 Measurements of Payment Earth embankment/subgrade construction shall be measured separately by taking cross sections at intervals in the original position before the work starts and after its completion and computing the volumes of earthworks in cubic metres by the method of average end areas......." Clause 305.2.2.3.3- relatable to Item No. 2.02(b) rea....
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....tion of the pond ash embankment shall be measured as one cross section for determination of the work under Item No. 2.02 (b) is fully supported by the contract conditions. The member of the tribunal, who dissented, inter alia, recorded that a reading of the specifications: "clearly shows that wherever soil is used it will be measured 2.02(a) with whenever pond ash is used it will be measured under 2.02(b) with TS 305.2.2.3. 13.3.7 I agree with the view taken by the Engineer while rejecting claim, as the view of the Engineer is strictly as per contract/BOQ provision as in this particular Contract embankment with soil and pond ash appear under one item and are very conspicuously bifurcated for different materials. 13.3.8 I analyse that claimant has flawed under and after thought to claim even soil as fly ash under item No. 2.02 (b). of BOQ. 13.3.9 Thus I draw firm conclusion that the provision made in the BOQ item 2.02 (a) and 2.02 (b) are for different material i.e. 2.02(a) is for soil and 2.02 (b)is for pond ash and is for type of material to be used in the respective items." 18. A reasoning similar to the majority award, which was in issue....
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....nkment. Had the item been described as "Providing fly ash for embankment" then it would have been appropriate to measure fly ash material only. The intention of contract is to measure the embankment. This is also corroborated from the description of BoQ item No. 2.02(a), which is only in one type of material i.e. approved material; the phrase used in description is "construction of embankment with approved materials". Here too embankment as an item and the words approved material is the adjective qualifying the type of embankment." In other appeals too, the DRP gave similar directions and instructions. In Oriental Structures' (supra) appeal (CA 4662/2023), the DRB's decision, inter alia, was that: "The decision of DRB is to measure the soil cover & Pond Ash together for Pond Ash embankment& be paid under BOQ item 2.02(b). The final quantity under BOQ item 2.02(b) are with Engineer & shall be submitted to Employer & to be paid at the rates approved after the Arbitration in vogue as on the days after allowing the rebate provided by Contractor in his offer." 20. It is quite evident that in most cases, the view of DRPs and tribunals, and in two cases, majority aw....
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....ich is forbidden Under Section 34. So viewed, the Division Bench's approach, of appellate review, twice removed, so to say [Under Section 37], and conclusions drawn by it, resulted in displacing the majority view of the tribunal, and in many cases, the unanimous view, of other tribunals, and substitution of another view. As long as the view adopted by the majority was plausible- and this Court finds no reason to hold otherwise (because concededly the work was completed and the finished embankment was made of composite, compacted matter, comprising both soil and fly ash), such a substitution was impermissible. 23. For a long time, it is the settled jurisprudence of the courts in the country that awards which contain reasons, especially when they interpret contractual terms, ought not to be interfered with, lightly. The proposition was placed in State of U.P. v. Allied Constructions 2003 Supp (2) SCR 55: "[..] It was within his jurisdiction to interpret Clause 47 of the Agreement having regard to the fact-situation obtaining therein. It is submitted that an award made by an arbitrator may be wrong either on law or on fact and error of law on the face of it could not n....
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....dissenting opinion". The arbitrator should consider carefully whether there is good reason for expressing his dissent, because a dissenting opinion may encourage a challenge to the award. This is for the parties' information only and does not form part of the award, but it may be admissible as evidence in relation to the procedural matters in the event of a challenge or may add weight to the arguments of a party wishing to appeal against the award.". [David St. John Sutton, Judith Gill and Matthew Gearing QC, Russel on Arbitration, 24th Edn. (Sweet & Maxwell), p. 313.] This Court also quoted Gary B. Born's commentary on International Commercial Arbitration [Gary Born, International Commercial Arbitration, Wolters Kluwer, Edn. 2009, Vol. II, p. 2466 & 2469.] opinion: "Even absent express authorization in national law or applicable institutional Rules (or otherwise), the right to provide a dissenting or separate opinion is an appropriate concomitant of the arbitrator's adjudicative function and the Tribunal's related obligation to make a reasoned award. Although there are legal systems where dissenting or separate opinions are either not permitted, or not ....
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....stitution, in order to do complete justice between the parties. The reason for doing so is mentioned in para 77 i.e. the considerable delay which would be caused if another arbitration was to be held. This Court exercised its extraordinary power in Ssangyong [Ssangyong Engg. & Construction Co. Ltd. v. NHAI,] keeping in mind the facts of the case, and the object of expeditious resolution of disputes under the Arbitration Act." However, the court did not, in Dakshin Haryana Bijli Vitran Nigam Ltd. (supra) direct the dissenting opinion to be treated as an award. In the opinion of this Court, that approach is correct, because there appears to be a slight divergence in thinking between Russel and Gary Born. The former, Russel is careful to point out that a dissenting opinion is not per se an award, but "is for the parties' information only and does not form part of the award, but it may be admissible as evidence in relation to the procedural matters in the event of a challenge." However, Gary Born does not expressly say that the opinion is not a part of the award. That author yet clarifies that "This is an essential aspect of the process by which the parties have an opportunity t....