Delhi High Court
M/S National Highways Authority ... vs M/S Ncc-Vee (Jv) on 10 March, 2015
$~59
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Judgment delivered on 10.03.2015
+ FAO(OS) 93/2015 , CM 3731/2015 & CM 3732/2015
M/S NATIONAL HIGHWAYS AUTHORITY
OF INDIA ..... Appellant
versus
M/S NCC-VEE (JV) ..... Respondent
Advocates who appeared in this case:
For the Appellant : Ms Tanu Priya Gupta with Mr Mukesh Verma
For the Respondent : Mr Krishna Vijay Singh
CORAM:
HON'BLE MR. JUSTICE BADAR DURREZ AHMED
HON'BLE MR. JUSTICE SANJEEV SACHDEVA
JUDGMENT
%
BADAR DURREZ AHMED, J (ORAL)
1. This appeal has been filed against the impugned judgment
dated 17.12.2014, whereby a learned Single Judge of this Court
dismissed the objections under Section 34 of the Arbitration and
Conciliation Act 1996 (hereinafter referred to as „the said Act‟),
which had been preferred by the appellant. The objections were in
respect of the award dated 24th November, 2012.
2. We need not go into the details, as the same have been set
out in the impugned judgment. The only point of controversy is
with regard to the note after sub para (xi) of sub clause 70.3 of the
conditions of particular application. The controversy was with
regard to the manner, in which the price adjustment was to be
given to the respondent. Elaborate formulae have been prescribed
in the said sub clause 70.3 for adjustments of the labour
component, the cement component, the steel component, the plant
and machinery and spares component, the bitumen component and
adjustment of other local materials.
3. Sub para (xi) of sub clause 70.3 reads as under:
"(xi) The following percentages will govern the
price adjustment for the local currency portion (R)
of the contract:
2. Plant and Machinery and Spares -Pp 20%
3. POL-Pf 10%
4. Bitumen - Pb X%
5. Cement - Pc Y%
6. Steel - Ps Z%
7. Other Materials - Pm 50 - (X + Y + Z)%
--------------
Total 100%
---------------
{Note: X, Y, Z are the actual percentage of cost of
bitumen, cement and steel respectively used for
execution of work as per the Interim Payment
Certificate for the month.)"
4. From the above sub para (xi) it is evident that percentages
ascribed to labour, plant, machinery and spares and POL are
constant (fixed). Insofar as bitumen, cement and steel are
concerned, the percentages are variable and have been depicted as
X %, Y % and Z %. Insofar as other materials are concerned, the
formula prescribed is 50 - (X+Y+Z)%. The total of all
components is 100%. It is evident that the percentage of other
materials is a balancing item. Therefore, it may be positive and it
can also be negative. This is so, because the total must always be
100%.
5. Insofar as „X‟, „Y‟ and „Z‟ are concerned the note appended
to sub para (xi) stipulates that they are the actual percentages of
cost of bitumen, cement and steel respectively, used for execution
of work, as per the interim payment certificate for the month.
6. The entire controversy in the present case relates to the
meaning of the expression „cost‟ of bitumen, cement and steel.
According to the learned counsel for the appellant the expression
„cost‟ denotes the quantity of bitumen, cement and steel used in a
particular month multiplied by the base rate (i.e. the rate prevailing
28 days prior to the submission of the bid).
7. On the other hand, the contention raised by the respondent is
that the expression „cost‟ refers to the quantity of the bitumen,
cement and steel used during a particular month multiplied by the
prevailing rate in that month. This is the limited scope of the
controversy in this case.
8. The Arbitral Tribunal has examined this aspect of the matter
in detail in paragraphs 57 to 85 of the award. The Arbitral
Tribunal concluded that a plain reading of the note below sub
clause 70.3 (xi) does not suggest that the cost of bitumen, cement
and steel mentioned therein, has to be considered as the cost of
these materials prevailing 28 days prior to the last date of
submission of the bid. It was further concluded that on a joint
reading of the relevant clauses and sub clauses, it was clear that the
cost of bitumen, cement and steel to be considered in the said note
was the actual/current cost and that contract does not mention that
the definition of cost of this particular sub clause had to be
understood differently.
9. We may also point out that in the general conditions of
contract, Clause 1.1 (g) (i) defines „the cost‟ to mean expenditure
properly incurred or to be incurred, whether on or off the site
including over and above charges properly allocated thereto and
does not include any allowance of profit. The said definition does
not refer to any base cost as the appellant wants us to interpret the
said note.
10. We have also examined the judgment of the learned Single
Judge. We find that the interpretation given by the Arbitral
Tribunal is not an impossible view. Although, there may be some
substance, in what the learned counsel for the appellant submits by
way of interpretation of the said note, but that would only be one of
the possible interpretations. Another possible interpretation is the
one, adopted by the Arbitral Tribunal.
11. It is well settled that the interpretation of a term of contract
is within the domain of the Arbitral Tribunal and if the Arbitral
Tribunal interprets a particular clause in a particular manner, which
is a possible interpretation, then the court ought not to interfere in
its jurisdiction under Section 34 of the said Act. The only
exception being where the interpretation results in a perversity and
shocks the conscious of the Court, the latter eventuality has not
happened in the present case.
12. In view of the foregoing, we do not find any reason to
interfere with the impugned judgment or the award.
13. The appeal is dismissed. There shall be no orders as to
costs.
BADAR DURREZ AHMED, J
SANJEEV SACHDEVA, J
MARCH 10, 2015
n
