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(b)Even with regard to claims that have been acceded to, AT has adopted a thumb rule approximation approach. According to learned State counsel, this is impermissible in the light of sub-

section (2) of section 28 of A and C Act as parties had not expressly authorised the AT to decide ex aequo et bono or as amiable compositeur. In this regard, it is to be noted that impugned award adopted Hudson formula. What is Hudson formula has been explained by Hon'ble Supreme Court in Associate Builders Vs. Delhi Development Authority reported in (2015) 3 SCC 49 and McDermott International Inc. Vs. Burn Standard Co. Ltd. and others reported in (2006) 11 SCC 181. To be precise, relevant paragraphs in Associate Builders and McDermott cases are http://www.judis.nic.in paragraphs 48 and 104 respectively. Paragraph 48 of Associate Builders case reads as follows :

“48.The Division Bench while considering Claims 9, 10, 11 and 15 found fault with the application of Hudson's formula which was set out by the learned arbitrator in order to arrive at the claim made under these heads. The Division Bench said that it was not possible for an arbitrator to mechanically apply a certain formula however well understood in the trade. This itself is going outside the jurisdiction to set aside an award under Section 34 inasmuch as in McDermott case [McDermott International Inc. v. Burn Standard Co. Ltd., (2006) 11 SCC 181] , it was held: (SCC pp. 222-24, paras 104-06) “104. It is not in dispute that MII had examined one Mr D.J. Parson to prove the said claim. The said witness calculated the increased overheads and loss of profit on the basis of the formula laid down in a manual published by the Mechanical Contractors Association of America entitled ‘Change Orders, Overtime, Productivity’ commonly known as the Emden Formula. The said formula is said to be widely accepted in construction contracts for computing increased overheads and loss of profit. Mr D.J. Parson is said to have brought out the additional project management cost at US $1,109,500. We may at this juncture notice the different formulas applicable in this behalf.
106. We do not intend to delve deep into the matter as it is an accepted position that different formulae can be applied in different circumstances and the question as to whether damages should be computed by taking recourse to one or the other formula, having regard to the facts and circumstances of a particular case, would eminently fall within the domain of the arbitrator.” Relevant portion in paragraph 104 of McDermott case reads as follows:

27 Viewing the matter in sum totality of all these principles, considering the nature of said contract and considering the nature of claims, on a careful examination of impugned award, this court finds that there is adequate technical explanation for the quantum arrived at with regard to sums awarded under each head of claim, though this has been described as thumb rule approximation by learned State counsel. Therefore, this court is of the considered view that this cannot be considered as infarction of section http://www.judis.nic.in 28(2) of A and C Act. To be noted, there is no change in sub-section (2) of section 28 post 23.10.2015. Therefore, McDermott case which was rendered on 12.05.2006 can be safely relied on with regard to such approximations and thumb rules being permissible.