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2009 (4) TMI 899 - DELHI HIGH COURTSettlement of dispute - Arbitral proceeding - Held that:- The Arbitral Tribunal correctly held that the petitioner produced no evidence to establish that they had appointed an Engineer in writing under clause 3 of the Contract. The only reference to an Engineer is in the letter dated 29th December, 2007 averring for the first time that the letter dated 16th August, 1996 was, in fact, an Engineer's letter as per clauses 26 and 27. Significantly, this was well after the invocation of arbitration by the respondent on 11th November, 2007 and thus, is of no avail to the petitioner. The petitioner's challenge to the award under Sections 11 and 16 of the Act must fail. No specific instances has been given, in the petitioner, as to which submission of the petitioner was not noted and in which manner the Arbitral Tribunal acted in a partial manner towards the respondent. Also uphold the decision of the Arbitral Tribunal dismissing the petitioner's application under Section 12 and 13 of the Arbitration Act. No restriction on or order of the court by which the Arbitral Tribunal was precluded from adjudicating and deciding the dispute in respect of the bank guarantees. Since, the bank guarantees were given under the contract, which contained an arbitration agreement that applied, even as per the petitioner, to the bank guarantees, there is no error of jurisdiction in adjudication of disputes in respect of the Bank Guarantees by the Arbitral Tribunal. The Arbitral Tribunal has rightly held that once it stood admitted by the petitioner that the material issued by it was used for its project and that there was no theft or pilferage, the petitioner could not make any claim against the respondent for excess consumption or deny the claim of the respondent for additional works which were necessitated due to site conditions and the, change in design. Arbitral Tribunal in the present case comprised of Engineers, two of whom were appointed by the President, Institution of Engineers. Their decision to apply the Hudson Formula for calculating the damages and expenses cannot be faulted merely because they choose to apply the said formula. This objection of the petitioner thus has no merit and is therefore, rejected. The Arbitral Tribunal directed the petitioner to pay only 50% of the amount of losses and damages suffered by the respondent on account of the prolongation of the work. The objection raised by the petitioner, namely that the Arbitral Tribunal despite holding that the respondent was liable for 50% of the delay granted the entire claim, is therefore, clearly misconceived and is rejected. In the present case, the petitioner has not been able to set out any ground on merits on which the Arbitral award merits interference from this Court except in the case of the butterfly valve and the award is modified and respondent held liable to pay ₹ 3,45,000/- instead of ₹ 2,00,000/- ordered by the Arbitral Tribunal on this claim. This amount of ₹ 3,45,000/- instead of ₹ 2,00,000/- shall be adjusted from the amount payable by the petitioner to the respondent. However, thus also allow the plea of the learned counsel for the petitioner Shri Bhat that in light of the current interest rates levy of 18% interest per annum was excessive and consequently reduce the rate of interest awarded by the Arbitral Tribunal to 12% uniformly. The present petition is accordingly dismissed with the above modifications with costs of ₹ 20,000/- in favour of the respondent.
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