Container Corporation Of India Limited ... vs Watrana Traction Company on 17 January, 2022

[Cites 4, Cited by 0]

Delhi High Court

Container Corporation Of India Limited ... vs Watrana Traction Company on 17 January, 2022

1. The petitioners have filed the present petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereafter 'the A&C Act') praying that the Arbitral Award dated 20.01.2021 (hereafter 'the impugned award') be set aside.

2. The impugned award was rendered by an Arbitral Tribunal constituted by a Sole Arbitrator (hereafter 'the Arbitral Tribunal'), in O.M.P. (COMM) 182/2021 Page 1 of 22 This is a digitally signed Judgement.

NEUTRAL CITATION NO: 2022/DHC/000290 the context of disputes that had arisen between the Container Corporation of India Limited (hereafter 'CONCOR') and the respondent (hereafter 'WTC') in connection with a contract for Mechanized Cargo Handling and Inventory Management at CONCOR's facility at Tughlakabad, New Delhi.

Factual Background

3. CONCOR is a Government company and is primarily engaged in providing rail transportation services between Inland/Domestic Containers Depots/Terminals and Ports within the country. WTC is a partnership firm and is engaged in the business of renting forklift trucks, warehousing equipments, containers and other vehicles on a contractual basis.

4. CONCOR had issued a Notice Inviting Tenders (hereafter 'NIT') for the work of Mechanized Cargo Handling and Inventory Management Services at Inland Container Depot (ICD) - Tughlakabad, New Delhi. Pursuant to the aforesaid NIT, WTC had submitted its online bid. WTC was declared as the successful bidder and CONCOR issued a Letter of Intent dated 11.09.2017 (hereafter 'the LoI'). Thereafter, on 18.09.2017, the parties signed an agreement (hereafter 'the Agreement'), whereby WTC agreed to provide the specified services, for a term of four years extendable by a further period of one year. In terms of the said LoI, WTC was required to furnish a Bank Guarantee (BG) in the sum of ₹25,00,000/-within a period of fifteen days from the date of issuance of the LoI, that is by 25.09.2017.

O.M.P. (COMM) 182/2021 Page 2 of 22

This is a digitally signed Judgement.

NEUTRAL CITATION NO: 2022/DHC/000290 Thereafter, on 10.10.2017, CONCOR called upon WTC to commence its work.

5. In terms of the Agreement, WTC was obliged to deploy the specified machines, equipment and manpower at the ICD for cargo handling and inventory management. However, WTC would be remunerated on the basis of certain activities executed by it at the agreed rates.

6. WTC did not deploy certain machinery as agreed. Consequently in the month of March 2018, CONCOR imposed a penalty of ₹2,73,045/-, which included a sum of ₹1,49,000/- on account of non- deployment of machinery by WTC. In this context, WTC sent a letter dated 21.04.2018 setting out the equipment deployed by it. It requested that the penalty amount of ₹1,49,000/-, which was imposed by CONCOR and deducted from its bill, be waived as it was suffering losses in performing the Agreement. WTC also stated that it had not defaulted in performance of any work and there was no pendency in performance of its work. WTC followed this by another letter dated 15.05.2018, once again, requesting that the penalty imposed for non- deployment of certain equipment [18 T Hydra & 10 T Forklift] be waived. It also stated that it was suffering huge losses and its billing income in the month of April was less than its fixed expenses. WTC requested CONCOR to waive the penalty on compassionate grounds because of business conditions. It also requested CONCOR to permit it to remove certain resources and reduce the strength of tally clerks to one tally clerk, till such time as the volume stabilizes.

O.M.P. (COMM) 182/2021 Page 3 of 22

This is a digitally signed Judgement.

NEUTRAL CITATION NO: 2022/DHC/000290

7. WTC sent another letter dated 14.06.2018, in continuation of its earlier letters stating that it was not able to pay salaries to its workers as the volume in the import section was very low and WTC was unable to sustain its fixed costs. It further stated that it was the practice to bill all containers for seal cutting at a rate of ₹170.90 for a 20 feet container and ₹192.10 for a 40 feet container, but the same was discontinued due to a change in the tender conditions. WTC complained that the billable amount for imports had dropped to 40% of the projected volume. It also made a grievance that CONCOR had levied a penalty of ₹3,43,195/- on account no fault of WTC. It, accordingly, requested that (a) the CCLS data of all import containers may be considered for billing including Green Channel/RMS Containers; and (b) the penalty amount may be refunded on account of poor business conditions.

8. Apparently, the issues as raised by WTC were not resolved. On 26.07.2018, WTC wrote to CONCOR stating that it had quoted an amount of ₹ 3,53,83,628/-, which was approximately 2.14% less than the estimated value. WTC stated that it had quoted nominal rates for import containers on the assumption that it would be paid as per the CCLS data, as was the practice being followed for billing at the material time. It claimed that the volume of business had reduced drastically and CONCOR had implemented changes in the CCLS software without considering that the same had affected the billing thereby, resulting in huge losses to WTC. It requested CONCOR to revise the rates upward on an urgent basis or permit WTC to exit the Agreement within a period of three months. It also called upon CONCOR to nominate an O.M.P. (COMM) 182/2021 Page 4 of 22 This is a digitally signed Judgement.

NEUTRAL CITATION NO: 2022/DHC/000290 independent arbitrator, in the event, its request was not accepted. WTC stated that it would continue with its operations in terms of the Agreement till such time as CONCOR appoints a new contractor within a period of three months.

9. On 13.09.2018, CONCOR responded to WTC's letter dated 26.07.2018 informing WTC that its request for termination had been accepted, however, it called upon WTC to continue performing the Agreement till 25.10.2018 or till finalization of a new contract whichever was earlier. It also informed WTC that WTC's BG would be forfeited and WTC would be debarred from participating in the next tender.

10. In view of the above, by a letter dated 14.09.2018, WTC requested CONCOR to appoint a Sole Arbitrator in terms of Clause 20 of the Agreement.

11. CONCOR sent another letter dated 17.10.2018 modifying its earlier letter dated 13.09.2018 and called upon WTC to continue with the Agreement till finalization of the new contract.

12. On 01.11.2018, WTC sent another reminder reiterating its request for appointment of an arbitrator. It further stated that if an arbitrator is not appointed, it would be compelled to approach the High Court for the appointment of an arbitrator. CONCOR responded by a letter dated 16.11.2018 referring to the Arbitration Clause and stated that since the disputes related to schedule of quantities as set out in Annexure-I of the Agreement and the same were only an approximate O.M.P. (COMM) 182/2021 Page 5 of 22 This is a digitally signed Judgement.

NEUTRAL CITATION NO: 2022/DHC/000290 estimate of expected volumes, there was no dispute that could be referred to arbitration.

13. The petitioner approached the Delhi International Arbitration Centre (DIAC) for appointment of an arbitrator. The learned Arbitrator was appointed by DIAC and the parties submitted a Joint Memorandum accepting the arbitration.

Impugned Award

14. It is WTC's case that the volume of business was significantly lower than as projected in the tender documents, which was relied upon by it for submitting its bid. It also alleged that CONCOR had unilaterally changed the billing system, whereby the revenues from the Agreement in question were reduced significantly.

15. Before the Arbitral Tribunal, WTC claimed an amount of ₹2,08,94,299/- on account of losses suffered by it due to alleged change in the tender conditions and on account of it being compelled to continue to perform the Agreement. WTC also claimed an amount of ₹25,00,000/- which was recovered from CONCOR by encashing the BG furnished by WTC.

16. Given the rival stands, the Arbitral Tribunal had framed the following points for determination:

"Points of Determination O.M.P. (COMM) 182/2021 Page 6 of 22 This is a digitally signed Judgement.

NEUTRAL CITATION NO: 2022/DHC/000290

40. Based on the pleadings of the parties, the following points of determination were settled vide Order dated 21.09.2020: -

i) Whether the Claimant is entitled for a sum of Rs.2,08,94,299/- against the losses suffered by the Claimant due to the alleged change of tender conditions? OPC

ii) Whether the Claimant is entitled for a sum of Rs.25,00,000/- submitted as bank guarantee en-cashed by the Respondent arbitrarily and illegally? OPC

iii) Whether the Claimant is entitled for a sum of Rs.5,00,000/- against as mental agony and harassment suffered by the Claimant due to the illegal acts of the Respondent? OPC

iv) Whether the Claimant is entitled to the amounts as stated in points 1 to 3 in view of the clauses 1.1 and 1.2 of Chapter III of the tender documents? Onus on parties

v) Whether the Claimant is entitled to any costs of arbitration. If so, to what amount? OPC

vi) Whether the Claimant is entitled to any pendente-lite or future interest. If so, at what rate.

vii) Relief."

17. The Arbitral Tribunal found that CONCOR had effected a change in the CCLS software, which had resulted in a change of the billing pattern. The Arbitral Tribunal accepted WTC's case that prior to a change in the CCLS software, the contractors were paid for all the containers as entered in the CCLS software. However, subsequent to upgrading the CCLS software, WTC was not paid on the basis of all O.M.P. (COMM) 182/2021 Page 7 of 22 This is a digitally signed Judgement.

NEUTRAL CITATION NO: 2022/DHC/000290 containers but only in respect of the work done. The Arbitral Tribunal found that this constituted a change in the tender conditions and this entitled WTC to claim payment on the basis of the volume of business as projected in the tender documents. On the said basis, the Arbitral Tribunal entered an award for a sum of ₹2,08,94,299/- on account of loss of revenue suffered by WTC for change in the tender conditions. The Arbitral Tribunal also awarded a sum of ₹25,00,000/- that was recovered by CONCOR by encashing the BG furnished by WTC.

18. In addition to the above, the Arbitral Tribunal also awarded pendente lite interest at the rate of 9% per annum on the claimed amount from the date of filing of the Statement of Claims till the date of award and, future interest at the rate of 9% per annum on the awarded amount including pendente lite interest.

Reasons and Conclusion

19. CONCOR has challenged the impugned award, primarily, on two grounds. First, that CONCOR had not breached the Agreement in question and therefore, WTC's claim for damages was required to be rejected. Second, that even if it was accepted that CONCOR was in breach of the Agreement and WTC was entitled to a claim for damages, it was, nonetheless, essential for WTC to establish loss suffered by it. CONCOR claims that there was no material on record to substantiate the alleged loss suffered by WTC. Therefore, the impugned award is vitiated by patent illegality.

O.M.P. (COMM) 182/2021 Page 8 of 22

This is a digitally signed Judgement.

NEUTRAL CITATION NO: 2022/DHC/000290

20. Mr Jain, learned counsel appearing for CONCOR, contended that the impugned award is contrary to the express terms of the Agreement between the parties. He pointed out that Clause 3 of the General Conditions of Contract (GCC), expressly stipulate that, WTC would not be entitled for any compensation from CONCOR, in the event of any change in the business pattern, drop in the volumes or insufficient work. He contended that WTC's entire claim is founded on the basis that there has been a drop in the business and therefore, its billings were reduced. Thus, the impugned award is contrary to the terms of the Agreement.

21. CONCOR had issued the NIT for Mechanized Cargo Handling and Inventory Management Services at ICD in two bid mode (Financial and Technical). The bids would be considered on a reverse auction basis and the technically qualified bidder quoting the lowest bid price (L-1) would be considered successful. The bidders were required to quote the schedule of rates as per Annexure-I to the Tender Documents. The bidders were required to quote separate rates for separate items of works such as ICD stuffing, direct stuffing, direct transshipment of cargo, loading and unloading of cargo, examination of cargo/container. It is clear that the financial bids submitted by the bidders were required to be evaluated on the said basis. The Tender Document also indicated the estimate value of business at ₹3,61,59,917/- per annum. Annexure- I to the bidding document also indicated the estimated volume of work for each item of work. The bidders were required to deploy the specified resources in terms of manpower and machinery at the ICD and O.M.P. (COMM) 182/2021 Page 9 of 22 This is a digitally signed Judgement.

NEUTRAL CITATION NO: 2022/DHC/000290 maintain themselves in a state of readiness to carry on the work of cargo handling.

22. The rates submitted by WTC were found to be the lowest. Accordingly, CONCOR had issued the LoI dated 11.09.2017, in favour of WTC, accepting its tender. Annexure-I to the LoI sets out the rates for certain activities as accepted. Annexure-I to the LoI is relevant and is reproduced below:

"Annexure-1 ACTIVITY SIZE Rate per container (in₹) 2.7: Export Cargo Handling 2.7.1: ICD Stuffing 20' 257.50 40' 324.50 2.7.2: Direct Stuffing 20' 257.50 40' 324.50 2.7.3.1: Factory Stuffing (Seal 20' 165.00 Cutting) 40' 185.50 2.7.3.2: Factory Stuffing (Seal 20' 257.50 cutting and Cargo Handing) 40' 324.50 2.8: Import Cargo Handling 2.8.1: ICD De-stuffing 20' 247.00 40' 310.00 2.8.2 Direct De-stuffing 20' 247.00 40' 310.00 2.8.3.1: Factory De-stuffing (Seal 20' 165.00 Cutting) 40' 185.50 2.8.3.2: Factory De-stuffing (Seal 20' 278.00 cutting and Cargo Handling) 40' 288.50 2.9OUT OF CYCLE 2.9.1: De-stuffing of containers 20' 247.00 40' 310.00 O.M.P. (COMM) 182/2021 Page 10 of 22 This is a digitally signed Judgement.

                                         NEUTRAL CITATION NO: 2022/DHC/000290


 2.9.2: Stuffing of containers                     20'            247.00
                                                   40'            247.00
 2.9.3 Direct Transhipment of Cargo                20'            247.00
                                                   40'            247.00
 2.9.4: Loading/unloading of cargo                 Per MT         45.00
 2.9.5: Examination of                             20'            45.00
 Cargo/Container
                                                   40'       45.00
 2.10: Work for Inventory                          Rate per 268.00"
 Management of Cargo                               Container

23. There is no dispute that WTC was paid for each activity conducted by it, at the rates as agreed.

24. As noted above, WTC's grievance is that the volume of revenue generated was less than the value of business as projected in the Tender Documents. WTC claimed that it had submitted its tender based on the estimated volume projected by CONCOR. The officials of CONCOR had assured WTC that the volume of business at the ICD, Tughlakabad, was increasing and the actual volume of business would be more than the estimated value as set out in the Tender Documents. WTC claimed that it had quoted approximately 2.4% less than the estimated value. WTC believed that it would be paid on the basis of the number of containers and other data as captured under the CCLS data as this was the procedure being followed by CONCOR prior to the Agreement in question. WTC claimed that it had incurred costs of more than ₹2.5 crores in material handling equipment to perform the Agreement but had found that the business was significantly less than as estimated by CONCOR. WTC claimed that the reduction in the volume was on O.M.P. (COMM) 182/2021 Page 11 of 22 This is a digitally signed Judgement.

NEUTRAL CITATION NO: 2022/DHC/000290 account of change in the CCLS software made by CONCOR and the same amounted to a change in the Tender Conditions. It also claimed that there was a change in the policy and the billing for cutting seals, which was earlier fixed at ₹170.90 for a 20 feet container and ₹192.10 for a 40 feet container, was stopped.

25. The Statement of Claims does not contain any allegations that CONCOR had breached any term of the provisions of the Agreement. A plain reading of the impugned award indicates that no such finding had been returned by the Arbitral Tribunal as well.

26. However, as stated above, WTC had premised its claim on the allegation that CONCOR had changed the Tender Conditions and the Arbitral Tribunal had also returned a finding to the aforesaid effect.

27. The allegation that CONCOR had changed the Tender Conditions is required to be understood by examining the pleadings. In the Statement of Claims filed by the WTC before the Arbitral Tribunal, it had claimed an amount of 2,08,94,299/-. According to WTC, CONCOR had changed the Tender Conditions. WTC claimed that it had suffered a loss to the extent of ₹2,09,22,028/- on account of change in the Tender Conditions and low volume of business from the month of April, 2018 to September, 2019. Paragraph 29 of the Statement of Claims reads as under:-

"29. That due to the change in tender condition and low volume of business from April 2018 to September 2019, the claimant has suffered a huge O.M.P. (COMM) 182/2021 Page 12 of 22 This is a digitally signed Judgement.

NEUTRAL CITATION NO: 2022/DHC/000290 loss of Rs.2,09,22,028/- inn running the contract. That as per the business volume projected by the Respondents on which the Claimant has submitted their bid and the contract was awarded to them the Claimant is supposed to get an amount of Rs. 6,97,80,736.7/- for the work done for a total period of 23 months and 20 days but the Claimant has received an amount of Rs.4,88,86,437/- therefore, the Claimant as per the volume of business has suffered a loss of Rs. 2,08,94,299.7/- is due and payable to the claimant by the Respondents. The details are annexed herewith as ANNEXURE P-18."

28. The computation of the amount as claimed (Annexure P-18 to the Statement of Claims) is relevant and set out below:-

"SCHEDULE OF THE MONETARY CLAIM OF THE CLAIMANTS Projected Business as per the Rs.3,53,81782/- tender 2017 for one year.

Total projected business as per the Rs.6,97,80,737/- tender document for 23 months and 20 days Total amount received under Rs.4,88,86,437/- invoices Total amount received under Rs.4,88,86,437/- invoices Actual loss as per tender Rs.2,08,94,299/-

O.M.P. (COMM) 182/2021 Page 13 of 22

This is a digitally signed Judgement.

NEUTRAL CITATION NO: 2022/DHC/000290 Bank Guarantee Encashed Rs.25,00,000/-

3. Damages on account of loss of Rs.5,00,000/-

                  reputation And mental agony

                  Total                                        Rs.
                                                               2,38,94,299/-

(Rupees Two Crores Thirty Eight Lakhs Ninety four thousand and two hundred and ninety nine only)

4. Add interest at the rate of 18% on the sum of Rs.2,38,94,299/- from the date of filing of the statement of claim till the passing of the award and thereafter from the date of the award till the full and final payment of the entire amount as per the award."

29. A plain reading of the impugned award indicates that the Arbitral Tribunal accepted WTC's contention that dehors the guidelines issued by the Custom Department for cutting seals of only specific containers, CONCOR was paying for all the containers which were passing through the Green Channel irrespective of seal cutting since the month of April, 2013. This continued till the month of April, 2018. However, in the month of April, 2018, CONCOR changed the CCLS software and started paying only for those containers of which the seals were opened.

O.M.P. (COMM) 182/2021 Page 14 of 22

This is a digitally signed Judgement.

NEUTRAL CITATION NO: 2022/DHC/000290 However, it continued to charge its customers for all the containers. The fact that CONCOR was charging its customers for all the containers passing through the Green Channel was admitted by CONCOR's witness. The Arbitral Tribunal accepted that the change in the billing made a huge difference in the volume of the business. The Arbitral Tribunal also found that the cost of the tender was finalized based on the estimated value of work. Although, the volume of business indicated in the Tender Document was only an estimate, however, the same was based on the minimum volume of work. The Arbitral Tribunal found that there was material change in the billing pattern due to changes in the CCLS software. The said findings are based on appreciation of evidence produced before the learned Arbitrator. The said conclusion cannot be held to be patently erroneous or one that vitiates the impugned award. It is, therefore, not amenable to review these proceedings.

30. The Arbitral Tribunal also found that the estimated volume of import containers as projected by CONCOR in the tender floated leading to the award of the contract to the new contractor in the month of September, 2019, was 39% lower in volume than as projected by CONCOR in the Tender Documents. The Arbitral Tribunal inferred that at the time of inviting bids, CONCOR was not aware that it would change its billing pattern by making changes in the CCLS software.

31. A reading of the impugned award indicates that the Arbitral Tribunal had accepted that the drop in the volume of business was on account of change in the billing pattern introduced in the CCLS software. In other words, the estimated business as projected in the Tender Documents was based on a billing system that provided for O.M.P. (COMM) 182/2021 Page 15 of 22 This is a digitally signed Judgement.

NEUTRAL CITATION NO: 2022/DHC/000290 payments for all containers. If the volume of business was estimated solely on the basis of the payments to be made on activity to be performed by the contractor, the volumes as projected would be much lower.

32. It is clear that the award entered by the Arbitral Tribunal is not for failure on the part of CONCOR to perform its payment obligations under the Agreement as WTC was paid for the activities performed by it at the agreed rates. The Arbitral Tribunal had entered an award on the ground that CONCOR had changed the Tender Conditions. A plain reading of the impugned award clearly indicates that the expression "change in the tender conditions" is used to mean that the projections of estimated volume of business as made by CONCOR in the Tender Conditions would be correct if it followed the billing pattern as was being followed earlier. But that was subsequently changed. The change in the billing pattern rendered the said estimate untrue.

33. The Arbitral Tribunal has entered an award on the basis that CONCOR had procured the Agreement by making a wrong representation as to the volume of business and therefore, WTC is liable to be compensated on the basis that the representation was incorrect. The Arbitral Tribunal did not articulate its reasons in the aforesaid manner. However, a meaningful reading of the impugned award clearly indicates so.

34. In Dyna Technologies (P) Ltd. v. Crompton Greaves Ltd.:

(2019) 20 SCC 1, the Supreme Court has observed as under:

24. There is no dispute that Section 34 of the O.M.P. (COMM) 182/2021 Page 16 of 22 This is a digitally signed Judgement.

NEUTRAL CITATION NO: 2022/DHC/000290 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 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.

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.

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35. When we consider the requirement of a reasoned order, three characteristics of a reasoned order can be fathomed. They are: proper, intelligible and adequate. If the reasonings in the order are improper, they reveal a flaw in the decision-making process. If the challenge to an award is based on impropriety or O.M.P. (COMM) 182/2021 Page 17 of 22 This is a digitally signed Judgement.

NEUTRAL CITATION NO: 2022/DHC/000290 perversity in the reasoning, then it can be challenged strictly on the grounds provided under Section 34 of the Arbitration Act. If the challenge to an award is based on the ground that the same is unintelligible, the same would be equivalent of providing no reasons at all. Coming to the last aspect concerning the challenge on adequacy of reasons, the Court while exercising jurisdiction under Section 34 has to adjudicate the validity of such an award based on the degree of particularity of reasoning required having regard to the nature of issues falling for consideration. The degree of particularity cannot be stated in a precise manner as the same would depend on the complexity of the issue. Even if the Court comes to a conclusion that there were gaps in the reasoning for the conclusions reached by the Tribunal, the Court needs to have regard to the documents submitted by the parties and the contentions raised before the Tribunal so that awards with inadequate reasons are not set aside in casual and cavalier manner. On the other hand, ordinarily unintelligible awards are to be set aside, subject to party autonomy to do away with the reasoned award. Therefore, the courts are required to be careful while distinguishing between inadequacy of reasons in an award and unintelligible awards."

35. The principle that a party, who has entered into a contract by relying on a representation made by the other party, is liable to be compensated, if the representation is found to be untrue is well settled. The aggrieved party is required to be placed in the same position as if the representation was correctly made. It is apparent that the Arbitral Tribunal has awarded damages on the aforesaid principle and the same warrants no interference in these proceedings.

O.M.P. (COMM) 182/2021 Page 18 of 22

This is a digitally signed Judgement.

NEUTRAL CITATION NO: 2022/DHC/000290

36. Mr Jain, had contended that the representation regarding volume of business as set out in the Tender Documents was merely an estimate and WTC had been put to notice that the actual volume of business would vary. He also referred to Clauses 1.1 and 1.2 of Chapter III of the Agreement and Clause 3 of the GCC and contended that WTC could not make any claim on account of variation in the volume of business.

37. Clauses 1.1 and 1.2 of Chapter III of the Agreement, reads as under:

"1. SCOPE OF WORK 1.1. The scope of work indicated in the paras below is only a guide. The actual requirements are subject to variations/adjustments depending on the pattern and volume of traffic.

1.2 The scope of work described in this chapter shall not be a basis for any dispute with regard to rates or for alteration of terms and conditions including General Conditions. Doubt, if any, about the interpretation of any of the clauses in this chapter shall be referred to the Tender Accepting Authority of Container Corporation of India Ltd. whose decision in the matter shall be final and acceptable to the tenderer/contractor."

38. Clause 3 of the GCC is set out below:

"3. CHANGE IN BUSINESS PATTERN: In case of drop in volumes or insufficient work contractor will not be entitled for any compensation from CONCOR on this account."

39. The Arbitral Tribunal had rejected the contention that the O.M.P. (COMM) 182/2021 Page 19 of 22 This is a digitally signed Judgement.

NEUTRAL CITATION NO: 2022/DHC/000290 aforesaid clauses proscribed the award of damages. A plain reading of Clause 3 of the GCC indicates that it proscribes of raising any claim based on variation of volume of business. There is no dispute that WTC was required to bear the risk of change in the volume of business. The volume of business as mentioned in the Tender Documents was merely an estimate and CONCOR had not held out any assurance that that volume of business would be generated. However, the principal issue in this case is not any variation in the volume of traffic. Clearly, WTC is required to bear the risks in variation in the volume of traffic. However, the Arbitral Tribunal found that a drop in WTC's billing was not attributable to a drop in traffic of containers. The same was as a result of a change in the billing pattern. CONCOR had projected the volume of business on a billing pattern that was subsequently changed thereby, rendering its representation to be incorrect. The variation in the volume of business resulting from change in traffic of containers, is materially different from a variation in the value of billing because the estimated cost was based on a billing pattern different from the one followed for making payments.

40. The estimated volume of business was based on the volumes in the period prior to issuing the NIT. The bidders were required to take that into account, while submitting their bids. CONCOR could not be held liable for any variation in the volume of business. However, in this case, the impugned award is based on the finding that although there was no material change in the volume of work, the billings dropped below the estimate as represented by CONCOR. There was no material O.M.P. (COMM) 182/2021 Page 20 of 22 This is a digitally signed Judgement.

NEUTRAL CITATION NO: 2022/DHC/000290 reason not to hold CONCOR liable for the accuracy of its estimate as the bidders had submitted their bid on the aforesaid basis. It is not seriously contended that WTC had any means to check the accuracy of the estimated volume of business.

41. In view of the above, the decision of the Arbitral Tribunal to hold that Clauses 1.1. and 1.2 of Chapter III of the Agreement and Clause 3 of the GCC do not apply, cannot be held to be perverse or patently erroneous. The impugned award is based on the finding that CONCOR had made an incorrect representation for procuring the bids.

42. Mr Jain contended that WTC had led no evidence with regard to the quantum of loss and the award was based on no evidence at all. The said contention is unmerited as the Arbitral Tribunal has entered an award based on the volume of billing projected by CONCOR. The Arbitral Tribunal has awarded the amount being the difference between the amount paid and the projected volume of business. As stated above, this is to place WTC in the same position as it would have been if the representation made by CONCOR regarding the volume of business, was correct.

43. The Arbitral Tribunal also awarded a sum of ₹25 lakhs in favour of WTC being the amount recovered by CONCOR by encashing the BG furnished by WTC. The Arbitral Tribunal found that CONCOR had not presented any evidence, which would reflect the loss suffered by it. It, accordingly, directed refund of the said amount. This Court finds no infirmity with the said decision. Mr Jain had fairly not advanced any O.M.P. (COMM) 182/2021 Page 21 of 22 This is a digitally signed Judgement.

NEUTRAL CITATION NO: 2022/DHC/000290 contention to challenge the impugned award on this ground.

44. In view of the above, the petition is dismissed. The pending applications are also disposed of.

VIBHU BAKHRU, J JANUARY 17, 2022 RK/v O.M.P. (COMM) 182/2021 Page 22 of 22 This is a digitally signed Judgement.

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