TMI Blog2016 (4) TMI 801X X X X Extracts X X X X X X X X Extracts X X X X ..... were given for the benefit of the claimant and any cost associated with such benefit would not come within the scope of Clause 70.8. However, respondent submitted that the bank guarantees were required to be given under the contract itself and such requirement was stipulated by the appellant primarily to reduce its financial risk and to bind the claimant for its performance or protecting the money advanced to the respondents. In his submission, furnishing a performance bank guarantee @ 10% of the contract price was a mandatory condition of the contract under Clauses 10.1 and 10.2 of COPA. Though at some stage the option of performance bond was mentioned in COPA, such option was withdrawn making performance security to be compulsorily i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aised in these appeals being identical, the appeals are dealt with by this common judgment and for the sake of convenience, the facts leading to the filing of FAO (OS) 588 of 2013 are dealt with in detail. 2. Contract No.TNHP/2, Construction Package II-C for a contract price of ₹ 295.53 crores for executing the work of 4-laning and strengthening of the existing 2 lanes sections between km 38 to km 115 on National Highway- 2 in Uttar Pradesh was awarded to the Respondent on 12.03.2001. 3. Clause 14.3 of Instruction to Bidder was as under:- All duties, taxes and other levies payable by the Contractor under the contract, or for any other cause, as of the date 28 days prior to the deadline for submission of bids, shall be inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exing of any inputs to the Price Adjustment Formulae in accordance with the provisions of Sub-Clauses 70.1 to 70.7 of this Clause. 4. Disputes having arisen between the parties, the matter was referred to the Arbitral Tribunal. Two claims were raised by the respondent namely: (i) Dispute No. 1 Compensation for additional cost on account of increase in Service Tax on the Insurance Premium under the Insurance Policy for the Project. (ii) Dispute No. 2 Compensation for additional cost on account of Service Tax on the Bank Guarantee charges. 5. It was submitted by the respondent-claimant that in terms of Clause 21.1 of General Conditions of contract, for the works awarded under the contract, an insurance polic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.3 Post award interest shall be payable in addition, on the principal sum awarded of ₹ 11,34,877/- at the rate of 12% per annum from 01.03.2013 to the actual date of payment of amounts under pars 6.1 6.2 above. No post award interest shall however be payable in case the above sums are payable within 90 days of the date of award. Similarly the Arbitral Tribunal awarded to the respondent-claimant following sums under dispute No. 2:- 10.1 The Claimant shall be paid by the Respondent an amount of ₹ 63,58,368/- on account of additional cost incurred on the Bank Guarantees furnished to the Respondent in terms of the Contract. 10.2 The Claimant shall also be paid by the Respondent a sum of ₹ 43,84,987/- t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y filing OMP No.623 of 2013 under Section 34 of the Arbitration and Conciliation Act, 1966 before the High Court of Delhi. By order dated 21.10.2013 Single Judge of the High Court dismissed said petition. In an appeal arising therefrom i.e. in FAO(OS)588 of 2013, the Division Bench of the High Court by its judgment and order dated 20.12.2013, which is presently under challenge, affirmed the view taken by Single Judge and dismissed the appeal. 8. The facts leading to the present appeal arising out of FAO(AS)590 of 2013 are more or less identical. In that matter identical claims were raised on two counts but arising out of a different contract by the very same claimant. The Arbitral Tribunal granted ₹ 8,84,969/- in respect of dispute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... associated with such benefit would not come within the scope of Clause 70.8. Mr. Biswajit Das, learned Advocate appearing for the respondent-claimant in both the appeals however, submitted that the bank guarantees were required to be given under the contract itself and such requirement was stipulated by the appellant primarily to reduce its financial risk and to bind the claimant for its performance or protecting the money advanced to the respondents. In his submission, furnishing a performance bank guarantee @ 10% of the contract price was a mandatory condition of the contract under Clauses 10.1 and 10.2 of COPA. Though at some stage the option of performance bond was mentioned in COPA, such option was withdrawn making performance securit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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