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2017 (3) TMI 1568 - HC - Indian LawsArbitration and Conciliation proceedings - challenge to the impugned Award as regards over run charges - Held that:- The Court finds that in the impugned Award the learned Arbitrator has discussed Clause 9 pertaining to over run charges. He has also adverted to email dated 30th June 2009 written by BHEL to the Respondent stating that while escalation would not be payable, over run charges would in fact be paid. The learned Arbitrator has then noted that at the time of submission of the tender, the Respondent had filled up the analysis of unit rate as per the format provided in the tender documents itself. Out of the various items listed at Serial No.5 Establishment and Administrative Expenses of site (5%) as well as depreciation and maintenance of tools and plants (2%), were relevant for over run charges as a result of extended maintenance and running of site. Since the Respondent had asked only for 5% of the contract value as over run charges, the Arbitrator awarded only that amount and that too only up to 27th May 2009 i.e. for a period of three months beyond the original completion date. The amount of over run per month charges was calculated @5% of the contract value divided by the original contract period and thus worked out as ₹ 1,59,731 per month. This was then multiplied by the period of over run i.e. 10 months. This worked out to ₹ 15,97,310. Since, however, Respondent had claimed only ₹ 14,79,615, only ₹ 14,79,730 was allowed. However, the amount of escalation claimed was disallowed and, therefore, the total over run charges actually allowed was ₹ 10,76,084. The Court finds that there is no legal infirmity whatsoever in the impugned Award insofar as the above allowing of the claim for over run charges is concerned. No ground has been made out under Section 34(2)(b)(ii) of the Act in this regard. However, as regards the award of pendente lite interest, learned counsel for the Petitioner is right in his contention that under Clause 5.7 no pendente lite interest could be granted. The Award to the extent that it has awarded pendente lite interest is contrary to the express terms of the contract and is hit by Section 28(3) of the Act. The Award to this extent is opposed to the fundamental policy of Indian law and is hereby set aside. Only the postAward interest in the manner awarded in the impugned Award is upheld.
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