TMI Blog2015 (5) TMI 1194X X X X Extracts X X X X X X X X Extracts X X X X ..... and the main contractor on the one hand and between the sub-contractor and the main contractor on the other will be quite distinct and separate. No such clause to the contrary, existent in the main contract between Appellants and SIPCOT, has been highlighted before us by the Appellants, which would persuade us towards a deviation from the presumption of distinct and sole liability of the Appellant-Contractor as employer viz. a. viz. the Respondent-Sub Contractor. The Appellant exercised care to make this concession by conjoining therewith its demand for adjustment in the Second Arbitration. To that extent the concession could be called a conditional one. At the heart of the concession however, the admission itself, taken alone, was not conditional. The Appellant thereby admitted an unconditional contractual liability on its part to pay the Respondent s contractual claim, albeit dressing the same in the shroud of conditionality, by the expedient of making the concession dependent upon a consequent favourable outcome in the Second Arbitration. We cannot subscribe to the argument on behalf of the Appellant that it was merely a Consultant and therefore could not be fastened with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent against the Appellant in the First Arbitration, and the claims made in turn by the Appellant against SIPCOT in the Second Arbitration. The Arbitrator passed a common Award in the First Arbitration for both packages in favour of the Respondent for the sum of ₹ 7,87,21,820/- for C1 and ₹ 1,38,78,139/- for C2, both sums carrying with them interest at the rate of twelve per cent from 04.03.2001 until the date of payment. Interest apart, the Appellant stood liable as a result of the Award to pay the Respondent ₹ 9,25,99,959/-, including the aforementioned ₹ 61 lakhs. 4 The Appellant filed two petitions (OP Nos. 107 and 108) under Section 34 of the Arbitration and Conciliation Act, 1996, thereby separately challenging the Award passed in respect of the two subcontracts. The Respondent filed two applications in the two petitions, contending that while the Appellant had rejected the Respondent s claims of payment arrears under the two subcontracts, it had, at the same time and contradictorily, claimed in the Second Arbitration against SIPCOT that its dues to Respondent were in turn payable to it by SIPCOT. By a common Order, the Single Judge di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ider agreement for Package C2, and in subsequent epistles exchanged between IRCON and the Respondent from whose analysis two significant factors emerge. Firstly, that back-to-back only meant that the terms and conditions relating to technical specifications, and quality, quantum, manner and method of work to be done by the Appellant in the main contract, stood transposed on the subcontracts, C1 and C2; the primary liability of the Appellant to the Respondent, however, stood untouched, there having been no transference or transposition of this liability onto SIPCOT, either explicitly or implicitly. Secondly, the Appellant had in its Written Statement before the Arbitrator, reiterated the back-to-back nature and thereby agreed that the Respondent would be entitled to payment of dues as and when the Appellant received the payment for these from SIPCOT, the Respondent s claims having been transmitted by the Appellant to SIPCOT for the latter s consideration. The Appellant has taken the stance that it had no objection to the Arbitrator awarding a reasonable amount to the Respondent, subject to the Appellant being awarded the same amount by the Arbitrator in its Arbitration with SI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en for the High Court to come to two dissonant conclusions in the two interdependent arbitrations; the Appellant s expressed fear being that while its obligation to pay, as sealed by the Award in favour of the respondent in the First Arbitration, would be sustained, the award in its favour against SIPCOT, if heard separately, would possibly be set aside, leaving it uncompensated and liable to pay the Respondent the claimed amount. The Single Judge observed that no material had been brought on record, nor a specific plea raised or details adduced, that SIPCOT had filed a Section 34 petition before the same Court in a challenge against the Award in the Respondent s favour; a mere statement from the Appellant s counsel made across the bar was not sufficient materially to justify the demand for connecting and hearing the petitions together. 8 The Learned Division Bench wholly ratified the reasoning of the Arbitrator and Single Judge below it, finding no reason to disencumber the Appellant from the obligation to fulfill the Respondent s claim. While entirely agreeing with the reasons given against the Appellant by the Arbitrator and the Courts below, we also find additiona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant provided for back to back subcontracts whereby SIPCOT would be directly answerable for the payment claims raised by contractors. That subletting was provided for by the main contract, and indeed occurred, has been found by the Arbitrator (in both Arbitrations) and affirmed by the Courts below. This however, is quite distinct from concluding that SIPCOT contractually (in the main agreement) assumed primary liability for the Subcontractor-Respondent s payment claims in respect of agreements made with the Appellant. The fact that the Respondent was represented and present in parleys and meetings between SIPCOT and the Appellant or that it was referred to in the correspondence exchanged between them does not lead to the conclusion that a Tripartite contract had come into effect by evolution. 11 The Appellant conceded before the Arbitrator that it would countenance an Award in favour of the Respondent as long as it was indemnified for the payment made to the Respondent by an equal offsetting payment by way of an Award in its favour in its arbitration with SIPCOT. The record, as has been hereinbefore referenced, shows that the Appellant was granted precisely such an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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