On 29th September, a bench of Delhi High Court consisting of Justice Vibhu Bakhru, held that the provisions of sub-clauses of Clause 1.1 of the Technical Specifications are general in nature. Sub-clause (v) of Clause 1.1 of the Technical Specifications also makes it clear that absence of terms such as providing, supplying, laying, installing and fixing in the description, does not absolve the contractor from performing the said activities. However, there is no mention of fabrication.

It was further held that the Arbitral Tribunal has extensively considered the oral testimony of the said witness and thus the Court is not required to reappreciate the same. The scope of Section 34 of the A&C Act does not entail re-appreciation and re-evaluation of evidence.

Facts of the case:

The petitioner, Rail Vikas Nigam Ltd. had filed the present petition under Section 34 of the Arbitration and Conciliation Act, 1996 impugning the arbitral award dated 08.02.2021 delivered by the Arbitral Tribunal comprising of three arbitrators, namely, Mr R. Rajamani, Mr N.K. Gupta and Mr B.S. Sudhir Chandra as the Presiding Arbitrator. The Arbitral Tribunal accepted Simplex’s contention and made the impugned award holding RVNL liable to make additional payment in respect of the said BOQ Item 5(b)(ii) at the rate of ₹21,067/- per MT.

Contention of the Petitioner:

The following contentions has been made by the petitioner:

  1. Mr. Seth, learned counsel appearing on behalf of RVNL contended that the Arbitral Tribunal has grossly erred in holding that BOQ Item 5(b)(ii) was not a complete item and did not include fabrication, painting, etc.
  2. He submitted that the Agreement was clear and BOQ Item 5(b)(ii) entailed “providing and erection of Structural Steel in floor, beam / roof etc.”.
  3. He further submitted that RVNL had issued a pre-bid clarification clearly indicating that the cost of fabrication would not be paid through different items.
  4. He submitted that the tender drawings accompanying the tender documents were tentative but indicated the extent of work involved. The actual work was required to be executed as per the detailed drawings.
  5. Mr. Seth further submitted that the Arbitral Tribunal has ignored that Simplex had altered its case in the rejoinder filed before the Arbitral Tribunal.
  6.  Lastly, he submitted that the impugned award was contrary to the principles of natural justice as the Arbitral Tribunal had not permitted RVNL to make its submissions

Contention of the respondent:

Mr Udayaditya Banerjee, learned counsel appearing for Simplex countered the aforesaid submissions on the following ground:

  1. He stated that the arguments advanced on behalf of RVNL amount to re-agitating the entire case, which is impermissible.
  2. He submitted that the Arbitral Tribunal had examined the terms of the Agreement and had correctly interpreted the same. The word ‘fabrication’ is not mentioned anywhere in BOQ Item 5(b)(ii) of Schedule A forming a part of the Agreement and therefore, the contention that the impugned award is contrary to the terms of the contract is unsustainable.
  3. He further submitted that the Clauses of Technical Specifications as well as GCC were general in nature. The same did not enlarge the scope of the BOQ items, which were required to be interpreted in their own terms.

Observation and judgement of court:

  1. The disputes between the parties essentially relate to interpretation of BOQ Item 5(b)(ii) of Schedule.
  2. The Arbitral Tribunal had carefully examined the BOQ items and had taken an informed view. The Court was unable to accept that the said reasoning is perverse or patently illegal. On the contrary, it found no infirmity with the aforesaid reasoning.
  3. Clauses 7.1 to 7.6 of the Technical Specifications also do not expressly provide that the contractor would necessarily be required to carry out fabrication work, even though it does not find any mention in the BOQ item.
  4. Clearly, if fabrication work is not included in the said BOQ item, Simplex would have no contractual obligation to execute the same. In such circumstances, obviously, the contract price would not cover execution of the fabrication work.
  5. The decision of the Arbitral Tribunal to not consider the judgment cited by the counsel for RVNL cannot be held to be violative of the principles of natural justice.

Thus, the court held that the contention that the impugned award is vitiated as RVNL was not afforded full opportunity to contest the claims made by Simplex or to advance its counter-claims, is unpersuasive and the petition was dismissed.

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