Arbitration and Conciliation Act, 1996 – s.37 – Arbitration award – Scope of interference in an appeal u/s.37 – Dispute between the appellant and the respondent over construction of Road Over Bridges – Case of the appellant that delay in construction work for the reasons attributable to the respondent, resulted in additional financial burdens – Appellant sought extension of time, and the same was extended by the respondent – Appellant then sought damages on account of delay on part of the respondent, however, the claims rejected – Thereafter, undertakings by the appellant that it would not claim anything extra other than escalation for the work executed – Two years later, the appellant invoked arbitration clause on basis of the claims raised – Arbitral tribunal rejected the claims based on clause 49.5 of GCC which disentitles the appellant from raising any claim for damages or compensation for failure or delay caused by the respondent in fulfilling its obligations under the contract – Petition u/s.34 by the appellant – Dismissed by the Single Judge of the High Court holding that the clause 49.5 would bar the appellant’s claim – Appeal before the Division Bench u/s.37 also dismissed – Correctness:
Held: Scope of interference in an appeal u/s.37, in examining an order, setting aside or refusing to set aside an award, is limited and restricted – On facts, the appellant acted upon clause 49.5 and sought an extension of time on three occasions – Solemn undertaking by the appellant not to make any claim other than escalation in respect of delays in the completion of work, however, claim made contrary to the undertakings – By the undertakings, the appellant agreed not to make a claim contrary to what is provided in clause 49.5, thus, by conduct, the appellant was estopped from challenging the validity of clause 49.5 – Furthermore, Clause 49.4 would apply when the delay is not due to the respondent – In the said matter, the delay was on the part of the respondent, hence, clause
49.5 would apply and not clause 49.4 – Also it cannot be inferred that clause 49.5 was waived by the respondent – Respondent stated that the claim for financial burden would have to be dealt with together with the proposal for an extension of time, and the said claim cannot be processed separately – Thus, on two occasions, on specific requests made by the appellant under clause 49 of the GCC, the extension of time was granted by the respondent – Except sub-clause 5 of clause 49, no other sub-clause which provides for grant of extension when the delay was attributable to the respondent – Thus, the order passed by the Division Bench upheld – General Conditions of Contract – Clause 49.5. [Paras 19, 23, 26-29]
As published in the Supreme Court Reports, Supreme Court of India. Headnotes prepared by: Nidhi Jain (2023) 9 SCC 85. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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