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2022 (6) TMI 1356 - HC - Indian LawsArbitration petition - decision of Project Director in respect of levy of compensation at the rate specified therein was final and binding - levy of consequent compensation - claim for Labour Cess @ 1% and DVAT @ 3% of the amount of work done, correct or not. First contention of the petitioner-DSIIDC is that as per Clause 2 of the Agreement, decision of Project Director in respect of levy of compensation at the rate specified therein was final and binding and, therefore, the question of delay/prolongation and consequent compensation was not arbitrable - HELD THAT:- This aspect has been explained in the decision of VIDYA DROLIA AND OTHERS VERSUS DURGA TRADING CORPORATION [2020 (12) TMI 1227 - SUPREME COURT] decided by the Hon‟ble Supreme Court in December, 2020. It was observed that non-arbitrability is basic to arbitration as it relates to the very jurisdiction of the Arbitral Tribunal. Non-arbitrability has multiple meanings. In J.G. ENGINEERS PVT LTD VERSUS UNION OF INDIA AND ANR [2011 (4) TMI 1467 - SUPREME COURT] similar clause as under consideration in the present case, was examined and the Hon‟ble Supreme Court concluded that the decision of the specified Authority on the question whether the contractor is responsible for delay is not final and binding, but the decision of the specified Authority on the consequential issue of quantification of compensation is final. It was, thus, held that the question of determination of delay is an arbitrable dispute to be decided by the Arbitral Tribunal. Arbitration being a matter of contract, the parties are entitled to fix the boundaries so as to confer and limit the jurisdiction and legal authority of the arbitrator. An arbitration agreement can be comprehensive and broad to include any dispute or can be confined to specific disputes. The scope of arbitrator's jurisdiction invariably arises when the disputes that are arbitrable are enumerated or the arbitration agreement provides for exclusions as in case of “excepted matters” which are the matters where the parties expressly exclude certain disputes to be referred to arbitration in respect of which the Arbitral Tribunal may not have jurisdiction to adjudicate such disputes. The will of the parties as to the scope of arbitration is a subjective act personal to the parties. The argument raised by the DSIIDC that the claim of the petitioner fell in an excepted manner and could not have been adjudicated by Arbitral Tribunal was found to be an after-thought and not supported by the pleadings and it has been rightly upheld by the Arbitral Tribunal's decision to award a sum of ₹1,04,60,700/- to HRD which was recovered by DSIIDC in the Final Bill. The conclusion arrived at by the learned Single Judge that the question of determination of delay was not an excepted matter, is based on the evidence and pleadings and does not suffer from any patent illegality. Whether the Arbitral Tribunal's decision to allow the M/s H.R. Builders's claim for Labour Cess @ 1% and DVAT @ 3% of the amount of work done is patently illegal? - HELD THAT:- A sum of ₹48,45,700/- which was awarded by the Tribunal as overheads on account of prolongation of works, was also challenged. The reasoning given by the Arbitral Tribunal while allowing this claim, was that HRB was required to be compensated for the prolongation of work on account of overheads incurred by it during the extended period and the sum so awarded and the Arbitral Tribunal moderated the amount as claimed by the HRB and awarded ₹48,45,700/- by applying Hudson formula. Again, it is a finding arrived at on the basis of evidence and is a factual conclusion which was found to be reasonable by the learned Single Judge and cannot be said to be perverse or patently illegal warranting interference by this Court - Similarly, the award of interest and cost had been challenged as being exorbitant but again grant of interest @ 8.5% was held to be reasonable. This again was a determination on facts and thus, cannot be re-agitated in the present proceedings. The scope of interference under Section 34 and Section 37 of the Act, 1996 is extremely limited to when an award is in conflict with the public policy of India, which includes cases of fraud, breach of fundamental policy of Indian law and breach of public morality or is patently illegal as held by the Apex Court in its decision in MEDERMOTT INTERNATIONAL INC. VERSUS BURN STANDARD CO. LTD. & ORS. [2006 (5) TMI 442 - SUPREME COURT] and M/S. DYNA TECHNOLOGIES PVT. LTD. VERSUS M/S. CROMPTON GREAVES LTD. [2019 (12) TMI 842 - SUPREME COURT] and again reiterated in the recent decision of PROJECT DIRECTOR, NATIONAL HIGHWAYS NO. 45 E AND 220 NATIONAL HIGHWAYS AUTHORITY OF INDIA VERSUS M. HAKEEM & ANR. [2021 (7) TMI 1343 - SUPREME COURT]. The conclusions arrived at by learned Arbitrator in his Award dated 13th April, 2018, including dismissal of the counter claim, were found to be well reasoned and based on the interpretation of various Clauses of the contract and the facts, which could not be termed as perverse or patently illegal and rightly held to be beyond the scope of interference under Section 34 of the Act, 1996 by learned Single Judge in the impugned order dated 11th August, 2021. Appeal dismissed.
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