National Highways Auth. Of India Vs. ITD Cementation India Ltd
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Head Note
The Arbitration and Conciliation Act, 1996 - Section 34
Arbitral Award - Challenge as to - Construction of Contract - Held that construction of the terms of a contract is primarily for an arbitrator to decide - He is entitled to take the view which he holds to be the correct one after considering the material before him and after interpreting the provisions of the contract - Court while considering challenge to an arbitral award does not sit in appeal over the findings and decisions unless the arbitrator construes the contract in such a way that no fair minded or reasonable person could do.
The Arbitration and Conciliation Act, 1996 - Section 34
Arbitral Award - Challenge as to - In clause No.13.4 of the Invitation to Tender it was clearly stipulated in the contract that all duties, taxes and other levies payable by the contractor under the contract as of the date 28th days prior to the deadline for submission of bid shall be included in the rates and prices and the total bid price submitted by the bidder - State Government was levying royalty on ordinary earth and this situation was obtaining on such date - By notification dated 20.03.2001, the same rate was maintained and as such there was no change arising due to any subsequent legislation - Arbitral Tribunal ought to have confined itself to the terms of the Contract and see if there was any variation for the purposes of Sub-Clause 70.8 of COPA - It went beyond its powers in holding that the existing levy as on the date the contract was entered into was without any authority in law and as such the imposition by notification dated 20.03.2024 created liability for the first time - Arbitral Tribunal went beyond the scope of the contract and it clearly exceeded its jurisdiction - Award insofar as it allows Claim No. 8 liable to be set aside.
The Arbitration and Conciliation Act, 1996 - Section 34
Arbitral Award - Challenge as to - View of the Arbitral Tribunal that as a result of upward variation in the rates of royalty pursuant to subsequent legislation, the matter would be covered by clause 32.1 held to be a plausible view - While quoting the initial rates and prices, it would not have been in contemplation of a party as to the framework of any revision in rates of royalty at a future date - Clause 32.1 can be said to have covered such eventualities - No error in the assessment and approach of the Arbitral Tribunal - High Court was right in dismissing the challenge.
Topic(s)-Arbitration - Award partially set aside
Important Decision(s)- Construction of the terms of a contract is primarily for an arbitrator to decide.