O.M.P. (COMM)/183/2021 of RAIL VIKAS NIGAM LIMITED Vs SIMPLEX INFRASTRUCTURES LTD

IN THE HIGH COURT OF DELHI AT NEW DELHI

Judgment delivered on: 29[th]September, 2021

+O.M.P. (COMM) 183/2021 & I.A. 7631/2021

RAIL VIKAS NIGAM LIMITED

..... Petitioner

versus

SIMPLEX INFRASTRUCTURES LIMITED..... Respondent

Advocates who appeared in this case:

For the Petitioner:Mr Anil Seth and Mr Prateek, Advocates.For the Respondent:MrUdayadityaBanerjee,MrSamrat:Sengupta and Mr Parag Chaturvedi, Advs.

CORAMHON’BLE MR JUSTICE VIBHU BAKHRU

JUDGMENT

VIBHU BAKHRU, J

Introduction

1.The petitioner, Rail Vikas Nigam Ltd. (hereinafter ‘RVNL’),has filed the present petition under Section 34 of the Arbitration andConciliation Act, 1996 (hereinafter the ‘A&C Act’) impugning thearbitral award dated 08.02.2021 (hereinafter the ‘impugned award’)delivered by the Arbitral Tribunal comprising of three arbitrators,namely, Mr R. Rajamani, Mr N.K. Gupta and Mr B.S. Sudhir Chandraas the Presiding Arbitrator (hereinafter the ‘Arbitral Tribunal’).

2.The impugned award was rendered in the context of disputesthat had arisen between the parties in connection with their contract –Contract Agreement No: RVNL/KOL/WCA/JMS1/2012-13/2 dated24.08.2012 (hereinafter ‘the Agreement’) – in respect of package,JMS1 Contract for “Construction of Joka, Thakurpukur, Sakher BazarandBehalaChowrastaStationsincludingallrelatedworks(Architecture,Electrical&Mechanical(E&M),HVAC,FireDetection, Fire Suppression System and Public Health EngineeringWorks) in Joka-BBD BAG Corridor of Kolkata Metro Railway Line”.

3.The disputes, essentially, relate to the interpretation of Item5(b)(ii) of Schedule of Bill of Quantities (hereinafter ‘BOQ’), whichwas required to be executed in terms of the Agreement.Whilst,RVNL claims that it included the work of ‘fabrication’. Therespondent, Simplex Infrastructures Ltd. (hereinafter ‘Simplex’),disputes the same. In the aforesaid context, Simplex had preferredclaims relating to execution of the fabrication work as an additionalitem as, according to it, such work was not covered under BOQ Item5(b)(ii).The Arbitral Tribunal accepted Simplex’s contention andmade the impugned award holding RVNL liable to make additionalpayment in respect of the said BOQ Item 5(b)(ii) at the rate of₹21,067/- per MT. In respect of the quantities already certified, the Arbitral Tribunal awarded an amount of ₹1,15,93,907/- in favour of Simplex and also held that RVNL would be entitled to escalation interms of the Agreement in respect of the aforesaid claim. Further, theArbitral Tribunal awarded interest at the rate of 9% per annum on the

awarded amount from the date of receipt of the impugned award tillthe date of actual payment in the event, the awarded amount was notpaid within three months from the date of the impugned award.

4.RVNL contends that the impugned award is patently illegal andfalls foul of the public policy of India.

Factual Context

5.On 01.12.2011, RVNL issued notice inviting tender for thepurpose of construction of four elevated stations on Joka-BBD BagCorridor of Kolkata Metro Railway Line – Package JMS-1.Alongwith the tender documents, RVNL provided the pricing documentsincluding Schedules to G.The tenders invited were for RateContract and the bidders were required to quote percentage above, orbelow, or at par with the prices mentioned in the schedules. The saidschedules comprised of BOQ and the item base rates. The bids wereevaluated on the basis of rate of discount/premium quoted by thebidders against the base rates for the BOQ items as specified in thesaid schedules.

6.Simplex participated in the competitive bidding process andwas awarded the contract for JSM-1 Package for construction of Joka,Thakurpukur, Sakher Bazar and Behala Chowrasta Stations includingall related works (Architecture, Electrical & Mechanical (E&M),HVAC, Fire Detection, Fire Suppression System and Public HealthEngineering Works) in Joka-BBD BAG Corridor of Kolkata MetroRailway Line. Accordingly, on 14.04.2012, RVNL issued the Letter of

Acceptance (LoA) in favour of Simplex. Thereafter, on 24.08.2012,the parties entered into formal contract for execution of the works(the ‘Agreement’). The work awarded was to be completed within aperiod of 24 months from the date of the LOA, that is, by 13.04.2014and, the Contract Price was computed at ₹200,91,29,786/- based on the BOQ.Along with the tender documents, RVNL also providedcertain drawings for the roof structure to be erected. It is Simplex’scase that the same did not provide any details to assess the quantum offabrication required for executing the BOQ Item 5(b)(ii).

7.In terms of the Agreement, Simplex was required to make shopfloor drawings on the basis of Approved for Construction (hereinafterthe ‘AFC drawings’) to be provided by RVNL.There was asignificant delay on the part of RVNL as the AFC drawings wereprovided to Simplex after almost two years after the date of the LoA.

8.SimplexclaimedthattheAFCdrawingsindicatedthatsubstantial quantity of fabrication work was involved, which wascoveredundertherelevantBOQitem[BOQItem5(b)(ii)].Accordingly, Simplex sent letter dated 05.07.2014 seeking anintroduction of new BOQ item in lieu of the existing BOQ Item5(b)(ii) of Schedule A, which would support the work as per the AFCdrawings furnished by RVNL. Simplex followed up with RVNL bysending another letter dated 07.10.2014 reiterating its request tointroduce new item of work. Thereafter, meeting took place in theoffice of RVNL on 16.10.2014 to discuss the matter regarding theBOQ item in question.

9.Simplex claimed that in the said meeting, its representativedemonstrated that the AFC drawings were entirely in variance with thedrawings provided along with the tender documents and RVNL wasconvinced that separate BOQ item was required to be introduced.Whilst, RVNL does not dispute that meeting took place; it claimsthat the meeting was only general meeting with respect to thecontract in question.

10.Simplex asserted that RVNL had called upon Simplex to submita rate analysis for the purpose of determining the new BOQ item andaccordingly, it submitted the rate analysis on 27.10.2014.

11.Simplex claims that on 12.12.2014, it received an email fromRVNL’s DGM forwarding an internally prepared rate analysis for thesaid item of work. The rate analysis furnished by Simplex was for asum of ₹21,080/- for the cost of fabrication, loading, unloading and transportation of fabricated structural members. The rate analysis forthe said work as mentioned in the email dated 12.12.2014 sent byRVNL was ₹21,067/-.

12.Simplex claims that believing that the new item of work offabrication of trusses would be introduced in the BOQ based on theaforementioned rate analysis, it continued to prepare the shopdrawings for fabrication of structural roof trusses in accordance withthe AFC drawings furnished by RVNL.

13.On 10.01.2015, Simplex forwarded sixteen numbers of shopdrawings for fabrication of the structural roof trusses and also

mentioned that the delay in approving the new item of BOQ wouldalso delay the execution of that work. This was followed by anotherletter dated 23.04.2015, whereby Simplex stated that it was unable tocommence the fabrication of roof structures pending approval of thesaid item of work. Simplex claims that it prepared and submittedworking drawings and thereafter, also commenced execution of theroof structure in one of the stations.

14.On 30.11.2015, RVNL sent letter rejecting the request ofSimplex to introduce new item of work. According to RVNL, thesame was covered under BOQ Item 5(b)(ii) of Schedule of thetender documents.

15.In 2016, Simplex invoked the arbitration clause and the ArbitralTribunal was constituted to adjudicate the disputes between theparties. In July 2020, after the arguments were heard, the thenPresiding Arbitrator expired. Consequently, new Arbitral Tribunalwas constituted in October 2020 by filling up the vacancy resultingfrom the demise of the learned Arbitrator. The arbitral proceedingsculminated on 08.02.2021 with the newly constituted Arbitral Tribunaldelivering the impugned award.

16.The tabular statement setting out the claims made by Simplex inits Statement of Claims is as under:

17.RVNL also preferred counter-claims and sought compensationfor the financial loss for defending the claims made by Simplex. Inaddition, it also claimed costs of arbitration quantified at ₹53,20,000/-.

18.The Arbitral Tribunal partially allowed the claims of Simplex interms of the impugned award. RVNL has been held liable to make anadditional payment for the subject work as an additional item of workat the rate of ₹21,067/- per MT for the quantity of 550.335 MT invoiced under RA Bills 37 to 70 (both inclusive) amounting to₹1,15,93,907/-. RVNL is also liable to pay an additional amount for the item in question from RA Bill no.71 onwards at the rate of₹21,067/- per MT subject to due verification along with escalation in terms of the Agreement.The counter-claims made by RVNL wererejected. The Arbitral Tribunal also awarded future interest at the rate

of 9% per annum from the date of the award till the date of payment, ifthe same was not paid within period of three months from the date ofthe award.

Submission

19.Mr. Seth, learned counsel appearing on behalf of RVNLcontended that the Arbitral Tribunal has grossly erred in holding thatBOQ Item 5(b)(ii) was not complete item and did not includefabrication, painting, etc. He submitted that the Agreement was clearand BOQ Item 5(b)(ii) entailed “providing and erection of StructuralSteel in floor, beam / roof etc.”. He further submitted that RVNL hadissued pre-bid clarification clearly indicating that the cost offabrication would not be paid through different items. Next, hesubmittedthatthetenderdrawingsaccompanyingthetenderdocuments were tentative but indicated the extent of work involved.The actual work was required to be executed as per the detaileddrawings.He has also referred to Note 13 of the tender drawing,which reads as under:

“Tender Drawing indicates the extent of work involved.However, actual work shall be executed as per detaileddrawing and specification for which no adjustment forprocess shall be admissible payment shall be as perrespective pricing and price document.”

20.He referred to the BOQ preamble which expressly indicates thatthe pricing document was required to be read in conjunction with thetechnical specifications, construction specifications, BOQs for the

work and other provisions of the tender documents including theGeneral Conditions of the Contract (hereafter ‘GCC’). He thenreferred to Clauses 7.1 to 7.6 of the Technical Specifications andsubmitted that the same made it clear that Simplex was to provide allmaterial and equipment to complete the works and to also provide thefabrication shop drawings. In addition to the above, he also drew theattention of this Court to Clause 4.1 of the GCC and submitted that interms of the said clause, the contract price would cover all obligationsforexecutionandcompletionofworkincludingtestingandcommissioning.

21.He contended that in view of the express terms of theAgreement, Simplex’s claim that fabrication of trusses for the roofstructure was not included in the Agreement was untenable and oughtto have been rejected. However, the Arbitral Tribunal had acceptedthe aforesaid claim and therefore, the impugned award is contrary tothe terms of the Agreement.He referred to the decisions of theSupremeCourtinSsangyongEngineeringandConstructionCompany Ltd. v. National Highways Authority of India (2019) 15SCC 131 and Associate Builders v Delhi Development Authority(2015) 3 SCC 49 and submitted that an arbitral award, which iscontrary to the terms of the contract is liable to be set aside as patentlyillegal and also as opposed to the public policy of India.

22.Mr. Seth further submitted that the Arbitral Tribunal hasignored that Simplex had altered its case in the rejoinder filed beforethe Arbitral Tribunal. In its Statement of Claim, Simplex had asserted

thatBOQItem5(b)(ii) did notincludefabrication,painting,transportation etc. However, in its rejoinder, it accepted that somefabrication was required to be done at the shop floor but asserted thatextensive fabrication was not involved. The witness (CW1) examinedon behalf of Simplex also admitted that nominal fabrication work wasrequired to be carried out for cutting, bending, welding of structuralsteel in desired shape and therefore, his testimony did not support thecase set up by Simplex. The Arbitral Tribunal accepted that the roofstructure was required to be constructed with minor fabrication ofrolled up sections. However, the Agreement between the parties didnot indicate the same. Thus, the impugned award is not only contraryto the terms of the Agreement but also contrary to the case set up bySimplex in its Statement of Claim wherein it had asserted that nofabrication was involved within the BOQ item in question.

23.Lastly, he submitted that the impugned award was contrary tothe principles of natural justice as the Arbitral Tribunal had notpermitted RVNL to make its submissions. He referred to the order ofthe Arbitral Tribunal in respect of the virtual hearing held on04.11.2020 and drew the attention of this Court to paragraph 9.1 of thesaid order which indicates that the counsel for RVNL was notpermitted to refer to Supreme Court decision or to make furthersubmissions in addition to submissions made earlier.

24.MrUdayadityaBanerjee,learnedcounselappearingforSimplex countered the aforesaid submissions.He stated that thearguments advanced on behalf of RVNL amount to re-agitating the

entire case, which is impermissible. He submitted that the ArbitralTribunal had examined the terms of the Agreement and had correctlyinterpreted the same.The word ‘fabrication’ is not mentionedanywhere in BOQ Item 5(b)(ii) of Schedule forming part of theAgreement and therefore, the contention that the impugned award iscontrary to the terms of the contract is unsustainable. He furthersubmitted that the Clauses of Technical Specifications as well as GCCwere general in nature. The same did not enlarge the scope of theBOQ items, which were required to be interpreted in their own terms.

Reasons & Conclusions:

25.Thedisputesbetweenthepartiesessentiallyrelatetointerpretation of BOQ Item 5(b)(ii) of Schedule which reads asunder:

26.Before the Arbitral Tribunal, Simplex claimed that in terms ofits understanding, Item 5(b)(ii) of the BoQ was limited to procuringthe readily available members from the approved vendors and erectingthe same. It also claimed that the drawings provided along with thetender documents did not indicate any extensive fabrication work.However, almost two years after the issuance of the LoA, RVNL hadprovided AFC drawings of the roof structure to be erected and thesame indicated extensive fabrication work. According to Simplex,such work was not included in BOQ Item 5(b)(ii).

27.The RVNL had disputed the above and claimed that fabricationwas included in the BOQ Item 5(b)(ii).

28.The RVNL relied upon the pre-bid clarification issued by it andClauses 7.1 to 7.6 of the Technical Specifications and Clauses 4.10and 5.1 of the GCC in support of its contention.

29.At the pre-bid stage, one of the bidders had raised query inregard to which RVNL had issued clarification, which is reproducedas under:

30.According to RVNL, the said clarification settled the issuebeyond the pale of any controversy.

31.The Arbitral Tribunal had examined the controversy andconcluded that BOQ Item 5(b)(ii) did not include any fabricationwork. Concededly, plain reading of the aforesaid BOQ item doesnot indicate that the same also entails fabrication of structural rooftrusses as claimed by RVNL. The Arbitral Tribunal had examined thelanguage of BOQ Item 5(b)(ii), evaluated the material placed onrecord, and held as under:

“A plain reading of the above item, according to us,shows only the grade of steel to be used for the roofstructure, and does not indicate any other specificrequirement of the Respondent. The Respondent neitherthrough their pleadings nor through their oral evidenceand submissions could justify why the type of roofstructure they required was not properly and completelydescribed and included in the item. Even though, the itemrefers to providing and erection of structural steel in roof,there was no reason why, the Respondent did not includethe full description of the item and stopped with merelyexpressing their requirement of the grade of steel alone.This point remains completely unanswered.”

32.Simplex had contended that the said pre-bid clarification reliedupon by RVNL was only general clarification; issued in response tothe query raised by another bidder. Simplex had not sought anyclarification as the terms of the BOQ item were clear and thefabrication, if any, under the said BOQ item was understood asnominal or basic fabrication work and, not extensive fabrication work

as subsequently required by RVNL. The Arbitral Tribunal acceptedthe aforesaid explanation after appreciating the other material onrecord.

33.The Arbitral Tribunal was also persuaded to accept that BOQItem 5(b)(ii) did not entail any extensive fabrication as another item(BOQ Item No.6.10) which entailed some fabrication had expresslyprovided for the same. The BOQ Item No.6.10 is set out below:

34.The Arbitral Tribunal had taken note of the above item and hadreasoned as under:

“129. The above description includes fabricating to requiredprofileandshapeandtransportingetc.,andaccordinglythebasicratewasstatedbytheRespondent as Rs 78,791.27. In contrast, in the BOQitem 5(b)(ii) the Respondent had given the basic rate ofRs.59,500/- per MT only even though the activities /operations involved in this item 5(b)(ii) for makingbuilt-up sections best fits the work involved in item6.10. Further, AT noted that the Respondent had takenso much care and had been meticulous in giving adetailed description of item 6.10 which is for meagerquantity of 2 MT with basic rate of Rs.78,791.27 perMT and par cost of Rs.1,57,582.24, but failed to givesimilar type of description for item. 5(b)(ii) for muchhigher quantity of 2321.21 MT at par cost ofRs.13,81,11,995.00 leading to the ambiguity that item5(b)(ii) included only minor fabrication and notextensive fabrication to make built-up sections as perAFCdrawings.Respondentshouldhavetakenadequate care to avoid such ambiguities which hefailed. In fact the tenders should be absolutely explicit,free of contradictions so that all the tenderers are clearregarding the items and their execution.profileandshapeandtransportingetc.,andaccordinglythebasicratewasstatedbytheRespondent as Rs 78,791.27. In contrast, in the BOQitem 5(b)(ii) the Respondent had given the basic rate ofRs.59,500/- per MT only even though the activities /operations involved in this item 5(b)(ii) for makingbuilt-up sections best fits the work involved in item6.10. Further, AT noted that the Respondent had takenso much care and had been meticulous in giving adetailed description of item 6.10 which is for meagerquantity of 2 MT with basic rate of Rs.78,791.27 perMT and par cost of Rs.1,57,582.24, but failed to givesimilar type of description for item. 5(b)(ii) for muchhigher quantity of 2321.21 MT at par cost ofRs.13,81,11,995.00 leading to the ambiguity that item5(b)(ii) included only minor fabrication and notextensive fabrication to make built-up sections as perAFCdrawings.Respondentshouldhavetakenadequate care to avoid such ambiguities which hefailed. In fact the tenders should be absolutely explicit,free of contradictions so that all the tenderers are clearregarding the items and their execution.Attention is also drawn to the description of item 5 (a)in BOQ (which is high value item) where it iselaboratelyexplained,goingtominutedetailsincluding notes where payments for items of work likeproviding laps / providing couplers, welding will notbe paid is clearly mentioned. In contrast, in item5(b)(ii)thedescriptionissoshort,andhardlyconveying any clear meaning of various items of workinvolved in this ‘roof structure work’. AT finds hugedifference in the basic rate of these two items, viz5(b)(ii) and 6.10. Now looking at the rate analysisexchanged between the parties which are on record, theone submitted by the Claimant vide CD 5 dated27/10/2014 indicates the cost of the new item forfabrication etc., as per the description given by theClaimant in the request letter at Rs 21,080/- per MT.The one prepared by the Respondent through itsdepartment and forwarded to the Claimant vide MrKoley's email dated 12/12/ 2014 (CD- 6) [refer S.No.6of the Table attached with Memo of Admission andDenial of the documents filed by the Claimant assubmitted by Respondent vide their memo dated13.06.2018] gives the worked out rate as Rs 21,067/-per MT. So it becomes evident that huge quantity offabricationworkwasnotinthemindoftheRespondent when the tender for this work was floatedand the required BOQ was prepared by them.”

35.It is clear from the above that the Arbitral Tribunal has carefullyexamined the BOQ items and had taken an informed view. This Courtis unable to accept that the said reasoning is perverse or patentlyillegal.On the contrary, this court finds no infirmity with theaforesaid reasoning.

36.The next question to be examined is whether the impugnedaward runs contrary to Clauses 1.1 and 7.1 to 7.6 of the Technical

Specifications and/or Clauses 4.10 and 5.1 of the GCC.The relevantsub-clauses of Clause 1.1 of the Technical Specifications are set outbelow:

“1. General

1.1General

i)These Specifications contained herein shall be read inconjunction with other tender documents and TenderDrawings issued under this Contract.conjunction with other tender documents and TenderDrawings issued under this Contract.

ii)Generally the work shall be carried out as per thelatest edition of Codes and Standards of IndianRailways, Metro Railways Kolkata, ‘Specificationsfor Road and Bridge works’ of Ministry of RoadTransport & Highways (MORTH) as published byIndian Roads Congress and CPWD specifications –1996/2002 with correction slips & amendments uptodate to the extent they are applicable to the workscovered under scope of works in order of precedenceand as decided solely by RVNL. Tender price shouldbe deemed inclusive of all aspects related to thisproject.latest edition of Codes and Standards of IndianRailways, Metro Railways Kolkata, ‘Specificationsfor Road and Bridge works’ of Ministry of RoadTransport & Highways (MORTH) as published byIndian Roads Congress and CPWD specifications –1996/2002 with correction slips & amendments uptodate to the extent they are applicable to the workscovered under scope of works in order of precedenceand as decided solely by RVNL. Tender price shouldbe deemed inclusive of all aspects related to thisproject.

iii)The Work shall be carried out in accordance with the“Good for Construction” drawings and designs aswould be issued to the Contractor by the engineerduly signed and stamped by him.The Contractorshall not take cognisance of any drawings, designs,specifications, etc. not bearing Engineer’s signatureand stamp.Similarly the Contractor shall not takecognisanceofinstructionsgivenbyanyotherAuthorityexcepttheinstructionsgivenbytheEngineer in writing.“Good for Construction” drawings and designs aswould be issued to the Contractor by the engineerduly signed and stamped by him.The Contractorshall not take cognisance of any drawings, designs,specifications, etc. not bearing Engineer’s signatureand stamp.Similarly the Contractor shall not takecognisanceofinstructionsgivenbyanyotherAuthorityexcepttheinstructionsgivenbytheEngineer in writing.

**********

v)Absence of terms such as providing, supplying,laying, installing, fixing etc. in the descriptions doesnot even remotely suggest that the Contractor isabsolved of such providing, supplying etc. unless anexplicit stipulation is made in this contract.TheEmployer / Engineer shall bear no costs of materials,labour,equipment,duties,taxes,Octroi,cess,royalties etc.laying, installing, fixing etc. in the descriptions doesnot even remotely suggest that the Contractor isabsolved of such providing, supplying etc. unless anexplicit stipulation is made in this contract.TheEmployer / Engineer shall bear no costs of materials,labour,equipment,duties,taxes,Octroi,cess,royalties etc.

***************vii)The classification of various items of works forpurposes of measurements and payments shall be asper Bills of Quantities (BOQ).Except wheredistinguished by BOQ, the rates apply to all heights,depths, leads, lifts, sizes, shapes and locations. Theyalso cater for all cuts and wastes. No height-wise /vii)The classification of various items of works forpurposes of measurements and payments shall be asper Bills of Quantities (BOQ).Except wheredistinguished by BOQ, the rates apply to all heights,depths, leads, lifts, sizes, shapes and locations. Theyalso cater for all cuts and wastes. No height-wise /

floor-wise separation shall be made for the rates.Likewise all heights of cantering, shuttering, staging,formwork and scaffolding, launching trusses andother launching methods are covered by the quotedrates including multi stage propping for heightsgreater than one life / floor as per drawings.”Likewise all heights of cantering, shuttering, staging,formwork and scaffolding, launching trusses andother launching methods are covered by the quotedrates including multi stage propping for heightsgreater than one life / floor as per drawings.”

37.As is apparent from the above, the provisions of sub-clauses ofClause 1.1 of the Technical Specifications are general in nature. Thesame do not in any manner materially extend the scope of the expressterms of the BOQ item. Sub-clause (v) of Clause 1.1 of the TechnicalSpecifications also makes it clear that absence of terms such asproviding, 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. In view of the above, it isdifficult to accept that in terms of Clause 1.1 of the TechnicalSpecifications, Simplex was required to carry out the work even

though the same was not expressly provided in the BOQ item inquestion. In any view of the matter, the impugned award cannot beheld to be contrary to Clause 1.1 of the Technical Specifications.

38.Clauses 7.1 to 7.6 of the Technical Specifications also do notexpressly provide that the contractor would necessarily be required tocarry out fabrication work, even though it does not find any mentionin the BOQ item. Clauses 4.10 of the GCC relied upon by RVNLreads as under:

39.There is no dispute that the contract price would cover all theobligations undertaken by Simplex under the Agreement. However,thatisnotthedispute/controversyinthiscase.Thedispute/controversy, as noted above, is whether the work of extensivefabrication is included in the BOQ Item 5(b)(ii) of Schedule A.Clearly, if fabrication work is not included in the said BOQ item,

Simplex would have no contractual obligation to execute the same. Insuch circumstances, obviously, the contract price would not coverexecution of the fabrication work.Clause 5.1 of GCC relates topreparation of shop drawings.Simplex has not disputed that it isrequired to prepare shop drawings based on the construction drawingsissued by RVNL.

40.Mr. Seth had also referred to the cross-examination of CW1 andhad contended that there were clear admissions made by CW1 –witness examined on behalf of Simplex – which was ignored by theArbitral Tribunal. This Court finds the said contention to beunmerited. The Arbitral Tribunal has extensively considered the oraltestimony of the said witness and this Court is not required to re-appreciate the same. The scope of Section 34 of the A&C Act does notentail re-appreciation and re-evaluation of evidence.The SupremeCourt, in number of decisions, has reiterated the same. In recentdecision in Delhi Airport Metro Express Pvt. Ltd. v. Delhi Metro RailCorporation Ltd.: 2021 SCC OnLine SC 695, the Supreme Court hadobserved that the approach of the courts to set aside the arbitral awardafter dissecting and reassessing the factual aspects of the cases wouldlead to corrosion of the objective of the A&C Act. The relevantobservations made by the court are set out below:

“24.ThisCourthasinseveralotherjudgmentsinterpreted Section 34 of the 1996 Act to stress on therestraint to be shown by courts while examining thevalidity of the arbitral awards. The limited groundsavailable to courts for annulment of arbitral awards are

well known to legally trained minds. However, thedifficultyarisesinapplyingthewell-establishedprinciples for interference to the facts of each case thatcome up before the courts. There is disturbingtendency of courts setting aside arbitral awards, afterdissecting and reassessing factual aspects of the cases tocome to conclusion that the award needs interventionand thereafter, dubbing the award to be vitiated by eitherperversity or patent illegality, apart from the othergrounds available for annulment of the award. Thisapproach would lead to corrosion of the object of the1996 Act and the endeavours made to preserve thisobject, which is minimal judicial interference witharbitralawards.Thatapart,severaljudicialpronouncements of this Court would become deadletter if arbitral awards are set aside by categorisingthem as perverse or patently illegal without appreciatingthe contours of the said expressions.

25. Patent illegality should be illegality which goes tothe root of the matter. In other words, every error of lawcommitted by the Arbitral Tribunal would not fall withinthe expression ‘patent illegality’. Likewise, erroneousapplication of law cannot be categorised as patentillegality. In addition, contravention of law not linked topublic policy or public interest is beyond the scope ofthe expression ‘patent illegality’. What is prohibited isfor courts to re-appreciate evidence to conclude that theaward suffers from patent illegality appearing on theface of the award, as courts do not sit in appeal againstthearbitralaward.Thepermissiblegroundsforinterference with domestic award under Section 34(2-A) on the ground of patent illegality is when thearbitrator takes view which is not even possible one,or interprets clause in the contract in such mannerwhich no fair-minded or reasonable person would, or ifthe arbitrator commits an error of jurisdiction bywandering outside the contract and dealing with mattersnot allotted to them. An arbitral award stating no reasonsfor itsfindings wouldmake itself susceptible tochallenge on this account. The conclusions of thearbitrator which are based on no evidence or have beenarrived at by ignoring vital evidence are perverse andcan be set aside on the ground of patent illegality. Also,consideration of documents which are not supplied to theother party is facet of perversity falling within theexpression ‘patent illegality’."

41.As noticed above, the conclusion of the Arbitral Tribunal isinformed by reason. The Arbitral Tribunal has evaluated the evidenceand material on record and, this Court finds no ground to interferewith the same under Section 34(2)(b)(ii) or under Section 34(2A) ofthe A&C Act.

42.The only question that remains to be addressed is whether theprinciples of natural justice were violated and RVNL was preventedfrom contesting the claims made by Simplex. It is pertinent to notethat on 04.11.2020, the counsel appearing for RVNL had made oralsubmissions before the Arbitral Tribunal and during the course of thesaid proceedings, he had sought to refer to the decision of the SupremeCourt in (Sethi Auto Service Station v DDA: 2009 (1) SCC 180). Thiswas objected to, as the hearing before the Arbitral Tribunal had beenconcluded and the parties had also filed their written submissions. Thesaid decision was not referred to by RVNL in its submission madeearlier or in the written submissions. Since one of the members of theArbitral Tribunal had expired after the hearings were concluded,the vacancy caused had been filled by the appointment of anotherArbitrator.In the circumstances, the Arbitral Tribunal with the

consent of parties, decided that the counsels shall be afforded anopportunity to make oral submissions spanning over three hours each.This was to enable them to once again submit their case for the benefitof the learned Arbitrator who had been appointed to fill up thevacancy caused by the demise of the Arbitrator appointed earlier.Concededly, the counsels were required to confine themselves to thesubmissions already made. However, the learned counsel for RVNLnow desired to cite another judgment, which was not cited earlier andthus, was prevented from doing so.The decision of the ArbitralTribunal to not consider the judgment cited by the counsel for RVNLcannot be held to be violative of the principles of natural justice.Undisputedly, RVNL was provided full opportunity to contest theclaims made by Simplex.The counsels were not only heardextensively but were also permitted to file written submissions. In thisview, the contention that the impugned award is vitiated as RVNL wasnot afforded full opportunity to contest the claims made by Simplex orto advance its counter-claims, is unpersuasive.

43.In view of the above, the petition is unmerited and accordinglydismissed. The pending application is also disposed of.

SEPTEMBER 29, 2021

‘gsr’

VIBHU BAKHRU, J