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6.1 In response, the Appellant contended that the settlement under the MoM pertained only to additional work and not the de-scoped work. The Appellant also argued that the Arbitral Tribunal has the discretion to adopt "honest guesswork" for determining damages or claims in the absence of precise evidence, provided such discretion is exercised reasonably.

6.2 The learned Single Judge found that the MoM clearly reflected a settlement of all disputes which would include the de-scoped work. It was held that the Arbitral Tribunal's interpretation of the document as excluding de-scoped work was perverse and unsupported by evidence. The learned Single Judge also observed that while arbitral tribunals have some latitude to award damages based on broad estimates, however, such decisions must be rooted in evidence and sound reasoning. The Arbitral Tribunal's approach of awarding an amount equal to 2/3rds of the difference between the claimed and offered amounts without adequate justification was deemed arbitrary and unjustified. Thus, the Arbitral Award qua Claim No.2 was set aside by the learned Single Judge.

24. The above extracts of the Minutes of Meeting dated 12.02.2015 leaves no iota of doubt that the parties have agreed and settled on their inter se disputes on the issue of the effect of the de-scoping of work."

[Emphasis is ours]

26. This Court has examined the MoM which took place on 12.02.2015 between the Appellant and the Respondent. The MoM set out a discussion between the parties with respect to the additional work of "pushing of 1100 mm dia pipe out of two below the railway line", for which an amount of Rs.36.22 lakhs would be reduced from the value of the de-scoping work. It further records the fact that the Respondent agreed to reduce an amount of Rs.7,21,884/- on account of cleaning, flushing and clearing of debris of de- scoped work. It further sets out that the Appellant and the Respondent discussed the issue qua the rate of sand filling item, and after discussions, the Respondent agreed to consider a revised rate for "morrum and for sand filling". The discussions which were held between the representatives of the Appellant and the Respondent as recorded in the MoM are detailed and under three heads, i.e.,

4. Pushing of pipe below 70,72,500 34,50,000 Rs.36,22,500/-

                                          Railway line (Annexure-1 of                           reduced below by









                                           deduction sheet, Sl no-Z)                                line
                                5.        De-scoping laying works of 12,41,49,406   4,85,36,019    Qty modified as
                                          1100 dia pipe (Annexure-1                                per single line
                                          of deduction sheet, Sl no-4)                             diagram       and
                                                                                                   material     cost
                                                                                                   shown separately
                                                                                                   in Sl no-8
                                6.        De-scoping laying works of 2,13,98,827    2,37,04,088    Qty modified as
                                          100 dia pipe (Annexure-1 of                              per single line
                                          deduction sheet, Sl no-5)                                diagram
                                7.        Miscellaneous work          60,57,184     54,43,800      [9,04,62,299/-
                                                                                                   ...handwritten...]
                                                                                                   Rs.7,21,8841
                                                                                                   reduced
                                8.        Deduction for unadjusted      __          7,15,24,851
                                          pipe        quantify  on
                                          reconciliation.
                                          Total                    17,31,20,120     16,19,87,150

45. We are unable to agree with this finding of the learned Single Judge. Given the fact that the entire case of the Respondent has been that the parties have entered into an amicable resolution of their disputes through the MoM and have taken steps on the basis of the settlement, any deduction that the Respondent claims should also have formed part of the negotiations. The table of claims which has been reproduced in paragraph 26.2 above does set out a column for deduction of de-scoping work. It also refers to a deduction of Rs. 11.68 crores as the indicated cost for the extra job which is then worked out by the Respondent as Rs. 21.88 crores (approximately) but revised to Rs. 13.61 crores. This amount was then deducted by the Respondent prior to making a one-time payment of Rs. 60,39,35,869/- to the Appellant. The final negotiations in the MoM were by the Respondent based on the deductions for the de-scoped work, including the return of the pipes. Once this final negotiations were concluded and binding on the Appellant, these were to bind the Respondent as well.