Gauhati High Court
Arb.A./18/2019 on 20 April, 2026
1
GAHC010092912019
2026:GAU-AS:5380
IN THE GAUHATI HIGH COURT
HIGH COURT OF ASSAM, NAGALAND, MIZORAM & ARUNACHAL PRADESH)
Arb.A./18/2019
1. Indian Oil Corporation
(Bongaigaon Refinery),
A Government of India Company, P.O.
Dhaligaon, District - Chirang,
Assam, Pin- 783385.
......Appellant
-Versus-
1. M/S Esteem Projects Private Limited,
B-39, Sector- 67, Noida (UP)- 201301.
......Respondent
For Appellant : Mr. R. Choudhury, Advocate
For Respondent : Mr. G. N. Sahewalla, Senior Advocate
Mr. H. K. Sharma, Advocate
Date of Hearing : 06.01.2026
Date of Judgment : 20.04.2026
Arb.A./18/2019 Page 1
2
BEFORE
HON'BLE MR. JUSTICE MRIDUL KUMAR KALITA
JUDGMENT
1. Heard Mr. R. Choudhury, the learned counsel for the appellant. Also heard Mr. G. N. Sahewalla, the learned senior counsel assisted by Mr. H. K. Sharma, the learned counsel for the respondent.
2. This appeal under Section 37 (1) (c) of the Arbitration and Conciliation Act, 1996 has been filed by the appellant, namely, Indian Oil Corporation (Bongaigaon Refinery), impugning the judgment and order dated 26.02.2019 passed by the Court of the learned District Judge, Chirang, Kajalgaon, in Misc. (Arbitration) Case No.18/2016, whereby the application filed by the appellant under Section 34 of the Arbitration and Conciliation Act, 1996 for setting aside the arbitral award dated 28.04.2016 was dismissed.
3. The facts relevant for consideration of the instant appeal, in brief, are that the respondent herein was found as the successful bidder in a tender floated by the appellant for the work of "Heater package for the DHDT (Diesel Hydro- Treater) project", Dhaligaon, Assam. The Letter of Intent (LOI) in respect of the work order No.2007/PC-1234 was issued in favor of the respondent on 16.08.2007. The letter of acceptance (LOA) was issued on 29.07.2007. The lump sum contract value of the work to be carried out by the respondent was USD 17,80,000/- (USD Seventeen Lakh Eighty Thousand Arb.A./18/2019 Page 2 3 Only) plus Rs. 18,72,20,000/- (Rupees Eighteen Crore Seventy-Two Lakh Twenty Thousand Only). The commencement date of the said contract was 16.08.2007 and the date of completion was 13 months from the date of LOI i.e., on 15.09.2008. However, the work was completed by the respondent on 10.08.2011, after a delay of 1059 days in completing the contract work.
4. The respondent, after completion of the work, by letter dated 07.12.2011, sought extension of time for completion of work up to 10.08.2011. The appellant by its letter dated 20.08.2014, informed the respondent of the approval of competent authority regarding allowing extension of time up to 10.08.2011 to complete the work in question with imposition of Liquidated Damages (LD) amounting to 10% of the total contract value as per Clause 4.4.0.0 of the General Conditions of Contract (GCC). The LD amount was estimated at Rs. 2,59,57,700/- (Rupees Two Crore Fifty Nine Lakh Fifty Seven Thousand Seven Hundred only).
5. It is pertinent to mention herein that the respondent submitted the final running account bill on 19.04.2012 for an amount of Rs. 23,27,946/- (Rupees Twenty Three Lakh Twenty Seven Thousand Nine Hundred Forty Six only).
6. Against the decision of the appellant regarding the deduction of the LD, the respondent initiated arbitration proceedings by filing statement of claims dated 10.09.2014 before the Indian Council of Arbitration (ICA) with following claims -
Arb.A./18/2019 Page 3
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(i) Amount due under RA Bill No. 24 dated 19.04.2012 of
Rs. 23,27,946/-;
(ii) Reimbursement of legal fees for opinion on procedure for post facto clearance and job work for imported material for Rs. 22,000/-;
(iii) Reimbursement of demurrage/cost incurred on imported dues for Rs. 22,80,109/-;
(iv) Additional cost incurred towards air freight on imported tubes;
(v) Fluctuation in exchange rate for Rs. 1,00,21,890/-;
(vi) Reimbursement of excise duty in terms of other than steel for Rs. 33,03,818/-;
(vii) Reimbursement of excise duty in terms of other than steel for Rs. 42,42,410/-;
(viii) Bank charges paid for extension of performance bank guarantee for Rs. 8,40,134/-;
(ix) Charges for pre dry out of refractory for Rs. 10,00,000/-
;
(x) Compensation for extended stay for Rs. 58,50,000/-;
(xi) Reimbursement of Liquidated Damages for Rs.
2,59,57,700/-;
(xii) Loss of opportunity for Rs. 2,59,57,700/-;
(xiii) Interest of Rs. 2,58,63,045/-;
(xiv) Cost of arbitration.
7. On receipt of the aforesaid statement of claims in the arbitration proceeding, the appellant submitted its reply/statement of defence on 18.12.2014. The appellant also Arb.A./18/2019 Page 4 5 submitted an application under Section 16 of the Arbitration and Conciliation Act, 1996 before the Arbitral Tribunal on 18.12.2014 stating therein that the Arbitral Tribunal does not have jurisdiction to entertain the claims raised by the claimant as the same are beyond the scope and purview of the arbitration in terms of the agreement between the parties.
8. The main defence taken by the present appellant in their statement of defence is that the Arbitral Tribunal lacks jurisdiction to entertain the claims raised by the respondent in as much as in terms of clause 9.1.0.0 of the GCC, only a dispute arising out of notified claims of the contractor included in the final bill in accordance with the provisions of Clause 6.6.1.0 of the GCC can be the subject matter of the arbitration. It was contended that none of the claims raised by the respondent are notified claims in terms of GCC neither the same were included in the final bill dated 19.04.2012.
9. However, the Arbitral Tribunal, after hearing the parties passed the arbitral award, on 28.04.2016, whereby, the Claim No. 2 to 10 and Claim No. 12 raised by the respondent were rejected by the Arbitral Tribunal as the same were not notified claims. However, it allowed the Claim No. 1, i.e., payment of Rs. 23,27,946/- against RA Bill No. 24 dated 19.12.2012. It also held in respect of Claim No. 11 that the appellant was not justified in levying the Liquidated Damages. Accordingly, the present appellant was directed to refund the amount of Liquidated Damage, namely, Rs. 2,59,57,700/- to the claimant (the present respondent). Against Claim No. 13, the Arbitral Arb.A./18/2019 Page 5 6 Tribunal allowed interest at the rate of 12% per annum from the date of reference i.e., 08.08.2015 on the Liquidated Damages of Rs. 2,59,57,700/- as well as on the amount under RA Bill No. 24 i.e., Rs. 23,27,946/-. In respect of Claim No. 14, the Tribunal directed that the claimant would be entitled to a sum of Rs. 25,00,000/- towards the cost of the arbitral proceeding.
10. Being aggrieved and dissatisfied with the award dated 28.04.2016, the appellant preferred an application under Section 34 of the Arbitration and Conciliation Act, 1996, before the Court of the learned District Judge, Chirang. The said application was registered as Misc. (Arbitration) Case No.18/2016.
11. During the pendency of the aforesaid arbitration case, the respondent filed an application under Section 34 (5) of the Arbitration and Conciliation Act, 1996, alleging that the petition under Section 34 of the Arbitration and Conciliation Act, 1996, filed by the present appellant was not maintainable on the ground of non-compliance of the statutory provision of serving prior notice on the respondent before filing the aforesaid petition, as contained in Section 34 (5) of the Arbitration and Conciliation Act, 1996.
12. The Court of the learned District Judge, Chirang, allowed the aforesaid application by its order dated 06.07.2017 and held that the application under Section 34 of the Arbitration and Conciliation Act, 1996 filed by the present appellant is hit by Section 34 (5) of the Arbitration and Conciliation Act, 1996, Arb.A./18/2019 Page 6 7 and as such, the said application under Section 34 of the said Act is not maintainable.
13. On being aggrieved by the aforesaid order dated 06.07.2017, passed by the Court of the learned District Judge, Chirang, the appellant approached this Court by filing an arbitration appeal, i.e., Arbitration Appeal No.19/2017. Later on, this Court, by its order dated 09.08.2018, passed in Arbitration Appeal No. 19/2017 had set aside the order dated 06.07.2017, passed by the Court of the learned District Judge, Chirang, petition under Section 34 (5) of the Arbitration and Conciliation Act, 1996 filed by the present respondent.
14. The matter was remanded to the Court of learned District Judge, Chirang for deciding the petition under Section 34 as well as Section 16 of the Arbitration and Conciliation Act 1996, which were filed by the present appellant, afresh.
15. Ultimately, by its judgment dated 20.06.2019, which has been impugned in the instant appeal, the Court of the learned District Judge, Chirang held that the Arbitral Tribunal has the jurisdiction to decide the disputes raised by the respondent regarding liquidated damages deducted from the final bill of the respondent by the appellant and as such by the aforesaid judgment, the petition under Section 34 of the Arbitration and Conciliation Act, 1996, filed by the present appellant, was dismissed.
16. Mr. R. Choudhury, the learned counsel for the appellant submits that the Court of the learned District Judge, Chirang, while passing the impugned judgment dated 26.02.2019, Arb.A./18/2019 Page 7 8 erred and failed to take into consideration the aspect that the arbitral award dated 28.04.2016, passed by the Arbitral Tribunal, is liable to be set aside under Section 34 (2) (a) (iv) of the Arbitration and Conciliation Act, 1996. He submits that the Court of the learned District Judge, Chirang, erred in not considering the fact that the Claim No.11 of the present respondent before the Arbitral Tribunal, regarding the reimbursement of the Liquidated Damages, was not notified in terms of the Clause 6.6.1.0 the GCC. As such, the same could not have been the subject matter of the arbitration, in terms of the Clause 9.1.0.0 of the GCC, before the Arbitral Tribunal. He submits that the Arbitral Tribunal failed to take into consideration that only those disputes arising out of the notified claim of the contractor included in the final bill, in accordance with the provision of clause 9.1.0.0, are referrable to arbitration. However, as the dispute regarding deduction of Liquidated Damages by the appellant was not notified in terms of the aforementioned clauses of the contract, the Arbitral Tribunal lacks jurisdiction to entertain any reference for arbitration.
17. The learned counsel for the appellant submits that as per Clause 6.6.1.0 of the GCC, if the contractor had any dispute regarding deduction of Liquidated Damages by the appellant from the final bill, he ought to have given notice in writing to the Engineer-in-Charge and the Site Engineer within 10 days from the date of issuance of order. He submits that any of the claims of contractor notified in accordance with the provision Arb.A./18/2019 Page 8 9 of Clause 6.6.1.0 remain at the time of preparation of final bill by the contractor, same shall have to be separately included in the final bill prepared by the contractor in form of a statement of claim attached thereto in terms of the Clause 6.6.3.0 of the GCC. He further submits that as per Clause 6.6.3.1, any notified claim not separately reflected and included in the final bill in accordance with the provisions of Clause 6.6.3.0 shall be deemed to have been waived by the contractor. He further submits that as per Clause 9.1.0.0, only notified claim of the contractor included in the final bill in accordance with the provision of Clause 6.6.3.0 may be referred to arbitration as per Clauses 9.1.1.0 and 9.1.2.0 of the GCC. However, in the instant case, the claim regarding reimbursement of deduction of liquidated damages by the appellant was not notified by the respondent in pursuant to the provisions contained in Clause 6.6.1.0, therefore, the Arbitral Tribunal does not have jurisdiction to entertain any reference of such dispute to arbitration under Clause 9.1.0.0 of the GCC. In support of his submission, the learned counsel for the appellant has cited a ruling of the Apex Court in the case of "Indian Oil Corporation Limited Versus NCC Limited" reported in 2023 (2) SCC 539.
18. The learned counsel for the appellant submits that since as per Clause 9.1.0.0, only disputes arising out of notified claim are referrable to arbitration and since in the instant case, the dispute regarding deduction of the liquidated damages by the appellant was not notified in terms of Clause 6.6.1.0 of the GCC, the same is a non-arbitrable dispute and it would not be Arb.A./18/2019 Page 9 10 open for the Arbitral Tribunal to arbitrate over such a dispute, since it would be beyond its jurisdiction. He further submits that this aspect was not taken into consideration by the Court of the learned District Judge, Chirang while passing the impugned judgment under Section 34 of the Arbitration and Conciliation Act, 1996.
19. The learned counsel for the appellant submits that that such a dispute, which is not notified in terms of the aforesaid clauses of the GCC, may be treated as those kind of dispute which are specifically excluded from the purview of arbitration clause and as such, the same would not be referrable to arbitration, therefore, the Court of the learned District Judge, Chirang as well as the Arbitral Tribunal failed to consider this aspect while assuming jurisdiction to arbitral dispute referred to it. In support of his submission, the learned counsel for the appellant has cited a ruling of a Coordinate Bench of this Court in the case of "Bongaigaon Refinery Versus Buildworth Private Limited", reported in 2019 SCC online GAU 2820.
20. The learned counsel for the appellant has also submitted that since the delay in execution of the work is apparent in this case and the same is attributable to the contractor, the appellant has rightly invoked the provision of Clause 4.4.2.0 of the GCC and levied 10% of the total contract value as liquidated damages on the respondent to compensate the loss suffered to the appellant due to breach of contract by the respondent in completing the contract work beyond the stipulated time as provided in the contract. He submits that Arb.A./18/2019 Page 10 11 same is in terms with the spirit of law as contained in Section 73 of the Contract Act, 1872.
21. The learned counsel for the appellant also submits that the Court of the learned District Judge, Chirang, while considering the application under Section 34 of the Arbitration and Conciliation Act, 1996 filed by the present appellant also failed to take into consideration the fact that though the Arbitral Tribunal rejected the Claim No. 2 to 10 and 12 of the respondent, as the same were not notified claims in terms of Clause 6.1.0.0, whereas, the claim in respect of liquidated damages was dealt with by adopting a different reasoning by the Tribunal, which is blatantly illegal. He submits that the Arbitral Tribunal erred in arbitrating over a non-arbitrable dispute as per the agreement between the parties. He also submits that the arbitral award is also liable to be set aside under Section 34 (2) (b) (i) as well as (ii) of the Arbitration and Conciliation Act, 1996.
22. On the other hand, Mr. G. N. Sahewalla, the learned senior counsel for the respondent has submitted that the Court of the learned District Judge, Chirang has rightly dismissed the application under Section 34 of the Arbitration and Conciliation Act, 1996, filed by the present appellant challenging the arbitral award passed by the Arbitral Tribunal on 28.04.2016. He submits that in page No.13 of the arbitral award, the Arbitral Tribunal has observed that the objection as to deduction of liquidated damages by the appellant may not be regarded as a claim and hence, the notification of the said Arb.A./18/2019 Page 11 12 objection under Clause 6.6.1.0 of the GCC is not necessary for referring any dispute arising out of such deduction to arbitration in terms of Clause 9.1.0.0 of the GCC.
23. The learned senior counsel for the respondent has submitted that the Arbitral Tribunal has correctly held that since the deduction against liquidated damages were made after 2.5 years of the submission of final RA bill as well as after expiry of defect liability period on 09.08.2012, the objection regarding deduction of liquidated damages could not have been raised in the final bill by the respondent and as such, the same could not have been notified in terms of the provision contained in Section 6.6.1.0 of the GCC. He submits that the view taken by the Arbitral Tribunal regarding its jurisdiction to entertain the reference cannot be regarded as perverse. Hence, the Court of the learned District Judge, Chirang was right in not interfering in the view taken by the Arbitral Tribunal as in a proceeding under Section 34 of the Arbitration and Conciliation Act, 1996, it cannot sit as the Court of appeal over the findings of the Arbitral Tribunal.
24. He further submits that the interpretation of the terms of contract is primarily for an arbitrator to decide, and unless the arbitrator construes the contract in such a way that it could not be said to be something that no fair-minded or reasonable person could do, same cannot be faulted with. He submits that the Court should not interfere with an award merely because an alternative view on facts and interpretation of contract exists. He submits that the court needs to be Arb.A./18/2019 Page 12 13 cautious and should defer to the view taken by the Arbitral Tribunal even if the reasoning provided in the award is implied unless such award portrays perversity unpardonable under Section 34 of the Arbitration and Conciliation Act, 1996. He submits that the Court of the learned District Judge, Chirang is, therefore, right in not interfering with the interpretation given by the Arbitral Tribunal while discarding the objection regarding its jurisdiction to entertain the reference of the dispute to the arbitration.
25. The learned senior counsel for the respondent submits that the final RA bill was submitted by the respondent in the year 2012 itself, whereas, the decision to deduct liquidated damages was made by the appellant in the year 2014 as such, the said claim could not have been included in the final bill, which was submitted two years prior to imposition of LD by the appellant. The learned senior counsel for the respondent submits that this aspect was also taken into consideration in Page No. 79 of the impugned judgment by the Court of the learned District Judge, Chirang.
26. He also submits that the reasoning given by the Court of the learned District Judge, Chirang for agreeing with the finding of the Arbitral Tribunal that the dispute regarding deduction of liquidated damages by the appellant could not have been included in the final bill, should not be regarded as perverse so as to justify any interference by this Court in the impugned order passed by the learned District Judge, Chirang Arb.A./18/2019 Page 13 14 in exercise of its powers under Section 34 of the Arbitration and Conciliation Act, 1996.
27. The learned senior counsel for the respondent submits that when it comes to the scope of an appeal under Section 37 of the Arbitration and Conciliation Act, 1996, the jurisdiction of an Appellate Court in examining the order refusing to set aside an award is all the more circumscribed. He submits that if the view taken by the Arbitral Tribunal in the interpretation of contract is a possible and plausible view, merely because another view can be taken may hardly be ground for interference with the arbitral award.
28. The learned senior counsel for the respondent has also submitted that since the contract work has already been completed in the year 2011 and since the final RA bill was also submitted in the year 2012, there may not be any Engineer-in-Charge or Site Engineer after two and a half years of completion of the said work. Hence, the question of notifying them does not arise. He also submits that this Court while exercising its jurisdiction under Section 37 of the Arbitration and Conciliation Act, 1996 cannot travel beyond the restrictions laid down under Section 34 of the said Act. He submits that this Court cannot undertake an independent assessment of the merit of the award and must only ascertain that the court of learned District Judge, while exercising the powers under Section 34 of the Arbitration and Conciliation Act, 1996 has not exceeded the scope of the provisions. He submits that it is evident that in the case where an arbitral Arb.A./18/2019 Page 14 15 award has been confirmed by the Court under Section 34 of the Arbitration and Conciliation Act, 1996, this Court should be very cautious in interfering with such a finding of the Court. He submits that the Court of the learned District Judge, Chirang has rightly dismissed the application under Section 34 of the Arbitration and Conciliation Act, 1996 filed by the present appellant and has rightly refused to interfere with the arbitral award passed by the learned Arbitral Tribunal, therefore, he submits that this appeal does not have any merit and is liable to be dismissed.
29. In support of his submission, the learned senior counsel for the respondent has cited the following rulings:
(i) OPG Power Generation Private Limited Versus M/s ENEXIO Power Cooling Solutions (I) Private Limited and others re-
ported in 2025 (2) SCC 417.
(ii) UHL Power Company Limited Versus the State of Himachal Pradesh, reported in 2022 (4) SCC 116.
(iii) MMTC Ltd. Versus M/s Vedanta Limited reported in 2019 (4) SCC 163.
(iv) Reliance Infrastructure Ltd. Versus State of Goa reported in 2024 (1) SCC 479.
(v) Olympus Superstructures Private Limited Versus Meena Vi-
jay Khetan and Others reported in 1999 (5) SCC 651.
(vi) Associate Builders Versus DDA reported in 2015 (3) SCC 49.
(vii) S V Samudran Versus The State of Karnataka reported in 2024 (3) SCC 623.
30. I have considered the submissions made by the learned counsel for both sides and have gone through the materials Arb.A./18/2019 Page 15 16 available on record. I have also perused the rulings cited by the learned counsel for both sides in support of their respective submissions.
31. The main contention of the appellant in the instant appeal under Section 37 (1) (c) of the Arbitration and Conciliation Act, 1996 is that the Court of the learned District Judge, Chirang, while considering the application under Section 34 of the Arbitration and Conciliation Act, 1996, filed by the present appellant, as well as the Arbitral Tribunal itself, did not consider the objection raised by the present appellant before both the Forums regarding the lack of jurisdiction of the Arbitral Tribunal to entertain the arbitration proceedings.
32. It is contended that the dispute regarding the imposition of liquidated damage by the present appellant on the respondent was not notified in terms of the Clause 6.6.1.0 of the GCC, therefore, said dispute could not have been referred to arbitration under Clause 9.1.0.0 of the GCC.
33. For the sake of convenience Clause 6.6.1.0 of the GCC is quoted herein below:
"6.6.1.0 - Should the contractor consider that he is entitled to any extra payment or compensation in respect of the works over and above the amounts due in term of the contract as specified in Clause 6.3.1.0 hereof or should the contractor dispute the validity of any deductions made or threatened by the Owner from any Running Account Bills or any payments due to him in term of the contract, the contractor shall forthwith give notice in writing of his claim in this behalf to the Engineerin-Charge and the Site Engineer within 10 (ten) days from the date of the issue of orders or instructions relative to any Arb.A./18/2019 Page 16 17 works for which the contractor claims such additional payment or compensation, or on the happening of other event upon which the contractor bases such claim, and such notice shall give full particulars of the nature of such claim, grounds on which it is based, and the amount claimed. The contractor shall not be entitled to raise any claim, or shall the Owner anywise be liable in respect of any claim by the contractor unless notice of such claim shall have been given by the contractor to the Engineer-in-charge and the Site Engineer in the manner and within the time aforesaid, and the contractor shall be deemed to have waived any or all claims and all his rights in respect of any claim not notified to the Engineer-in-charge and the Site Engineer in the matter and within the time aforesaid."
34. It appears that the objection regarding jurisdiction of the Arbitral Tribunal for want of notifying the dispute regarding deduction of liquidated damages from the final bill of the respondent was raised before the Arbitral Tribunal also. The Arbitral Tribunal rejected the said objection mainly on the ground that according to it, the respondent is not asking for any additional payment from the appellant and in that sense, it was not regarded as a claim, it only objected to the deduction of liquidated damages after more than two and a half years after submission of final RA bill, much after the lapse of defect liability period which expired on 09.09.2012. The Arbitral Tribunal also held that since the objection to the deduction made by the appellant as liquidated damages was not any additional claim by the respondent. There is no question of including the same in the final RA bill submitted Arb.A./18/2019 Page 17 18 by the respondent and accordingly, it held that it does have jurisdiction to entertain the arbitral proceedings.
35. It also appears that the Court of the learned District Judge, Chirang while considering the application under Section 34 of the Arbitration and Conciliation Act, 1996, has held in Page No. 79 of the impugned judgment that as demand for imposition of liquidated damage as the liquidated damages were imposed on the respondent much after submission of final RA bill by it, hence, it was not possible for the present respondent to have mentioned the claim of reimbursement of deduction of liquidated damages in the said bill.
36. It also appears that the Court of the learned District Judge, Chirang has also held in page no. 80 of the impugned judgment that Clause 9.1.0.0 of the GCC contemplates about two circumstances, under which a dispute may be referred to arbitration. Firstly, any dispute arising between parties out of any notified claim of the contractor included in the final bill. Secondly, any dispute regarding deduction from the final bill of the contractor or any amount payable by the owner to the contractor in respect of the work. The Court of the learned District Judge, Chirang observed that the dispute of illegal deduction of liquidated damage which was referred to the arbitration is not included in first part of the Clause 9.1.0.0 of the GCC, rather, it is included in the second part of the said clause which allows any dispute regarding any deduction from final bill of the contractor to be referred to the arbitration. Hence, the Court of the learned District Judge, Chirang held Arb.A./18/2019 Page 18 19 that the Arbitral Tribunal was correct in holding that the dispute referred to the arbitration by the respondent cannot be a notified claim, rather it is a dispute regarding deduction of liquidated damages from the final bill which could not have been notified in terms of Clause 6.6.1.0 of the GCC.
37. For the sake of clarity, the Clause 9.1.0.0 of the GCC is quoted herein below:
"9.1.0.0 - Subject to provisions of Clause 6.7.1.0 and 6.7.2.0 hereof, any dispute or difference between the parties hereto arising out of any notified claim of the contractor included in the final bill in accordance with the provisions of Clause 6.6.3.0 hereof and/or arising out of any amount claimed by the Owner (whether or not the amount claimed by the Owner or any part thereof shall have been deducted from the final bill of the contractor or any amount paid by the Owner to the contractor in respect of the work) shall be referred to arbitration as hereunder provided in Clauses 9.1.1.0 and 9.1.2.0 as applicable."
38. The Arbitral Tribunal as well as the Court of the learned District Judge, Chirang interpreted the Clause 6.6.1.0 and Clause 9.1.0.0 of the GCC in a manner, which does not require the dispute regarding deduction of liquidated damages from the final bill to be notified under Clause 6.6.1.0 of the GCC. Though, this court is of the view that a different interpretation of the said clauses may also be made, however, the jurisdiction of this Court under Section 37 of the Arbitration and Conciliation Act, 1996 is extremely circumscribed to justify making of any such attempt.
Arb.A./18/2019 Page 19 20
39. The Apex Court in the case of "UHL Power Company Limited Versus the State of Himachal Pradesh" (Supra) has observed as follows:
"20. In Dyna Technologies [Dyna Technologies (P) Ltd. v. Crompton Greaves Ltd., (2019) 20 SCC 1], the view taken above has been reiterated in the following words : (SCC p. 12, para 25) "25. Moreover, umpteen number of judgments of this Court have categorically held that the courts should not interfere with an award merely because an alternative view on facts and interpretation of contract exists. The courts need to be cautious and should defer to the view taken by the Arbitral Tribunal even if the reasoning provided in the award is implied unless such award portrays perversity unpardonable under Section 34 of the Arbitration Act."
21. An identical line of reasoning has been adopted in South East Asia Marine Engg. & Constructions Ltd. (SEAMEC Ltd.) v. Oil India Ltd. [South East Asia Marine Engg. & Constructions Ltd.
(SEAMEC Ltd.) v. Oil India Ltd., (2020) 5 SCC 164 :
(2020) 3 SCC (Civ) 1] and it has been held as follows : (SCC p. 172, paras 12-13) "12. It is a settled position that a court can set aside the award only on the grounds as provided in the Arbitration Act as interpreted by the courts.
Recently, this Court in Dyna Technologies (P) Ltd. v. Crompton Greaves Ltd. [Dyna Technologies (P) Ltd. v. Crompton Greaves Ltd., (2019) 20 SCC 1] laid down the scope of such interference. This Court observed as follows : (SCC p. 12, para 24) „24. There is no dispute that Section 34 of the Arbitration Act limits a challenge to an award only on the grounds provided therein or as interpreted by various Courts. We need to be cognizant of the Arb.A./18/2019 Page 20 21 fact that arbitral awards should not be interfered with in a casual and cavalier manner, unless the Court comes to a conclusion that the perversity of the award goes to the root of the matter without there being a possibility of alternative interpretation which may sustain the arbitral award. Section 34 is different in its approach and cannot be equated with a normal appellate jurisdiction. The mandate under Section 34 is to respect the finality of the arbitral award and the party autonomy to get their dispute adjudicated by an alternative forum as provided under the law. If the Courts were to interfere with the arbitral award in the usual course on factual aspects, then the commercial wisdom behind opting for alternate dispute resolution would stand frustrated.‟
13. It is also settled law that where two views are possible, the Court cannot interfere in the plausible view taken by the arbitrator supported by reasoning. This Court in Dyna Technologies [Dyna Technologies (P) Ltd. v. Crompton Greaves Ltd., (2019) 20 SCC 1] observed as under : (SCC p. 12, para 25) „25. Moreover, umpteen number of judgments of this Court have categorically held that the Court should not interfere with an award merely because an alternative view on facts and interpretation of contract exists. The Courts need to be cautious and should defer to the view taken by the Arbitral Tribunal even if the reasoning provided in the award is implied unless such award portrays perversity unpardonable under Section 34 of the Arbitration Act.‟ "
40. If we go through the Clause 9.1.0.0 of the GCC as quoted herein above, it appears that under the facts and circumstances of this case where the liquidated damages were Arb.A./18/2019 Page 21 22 imposed after two and a half years of submitting final RA bill, the interpretation of the aforesaid Clause (Clause 9.1.0.0) given by the Arbitral Tribunal as well as by the Court of the learned District Judge, Chirang, while dealing with the application under Section 34 of the Arbitration and Conciliation Act, 1996, cannot be regarded as irrational interpretation. Though, an alternative interpretation is also possible, however, merely because an alternative view on facts and interpretation of contract exists, this Court in exercise of its powers under Section 37 of the Arbitration and Conciliation Act, 1996 would not interfere in the arbitral award as well as in the judgment of the Court of the learned District Judge, Chirang rendered under Section 34 of the Arbitration and Conciliation Act, 1996, wherein it has declined to set aside the arbitral award.
41. This Court is of the considered opinion that in the facts and circumstances, which are peculiar to this case, the interpretation of the relevant clauses of the GCC as given by the learned Arbitral Tribunal as well as by the Court of the learned District Judge, Chirang under Section 34 of the Arbitration and Conciliation Act, 1996 are both possible and plausible. As such, any interference with the impugned judgment of the Court of the learned District Judge, Chirang, whereby it refused to set aside the arbitral award, is not warranted.
42. In view of the discussions made in the foregoing paragraphs as well as the reasons stated therein, this Court is of Arb.A./18/2019 Page 22 23 considered opinion that the present appeal lacks merit and any interference with the finding of the Court of the learned District Judge, Chirang in the impugned judgment as well as any interference in the arbitral award passed by the learned Arbitral Tribunal is not warranted under the facts and circumstances of the case.
43. Accordingly, this appeal is hereby dismissed.
44. The stay on the execution of the impugned judgment and order of the learned District Judge, Chirang granted by this court on 08/11/2019 in IA(C)3412/2019 shall stands vacated. The respondent shall be entitled to the pendente lite interest on the awarded amount in terms of the arbitral award.
JUDGE
Comparing Assistant
Digitally signed
Munm by Munmun
Boruah
un Date:
2026.04.20
Boruah 16:10:04
+05'30'
Arb.A./18/2019 Page 23