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O.P.No.4 of 2015

IN THE HIGH COURT OF JUDICATURE AT MADRAS THE HONOURABLE MR.JUSTICE CORAM: N. SATHISH KUMAR Chennai-600044. No.60 Engineering Mr.K.Dhanasekar Rajendra Contractor, Prasad and Road, O.P.No.4 O.A.No.31 of 2015 of 2015 The Chennai Southern Union its 600003. Railway, General of India, Manager Park Town, Mrs.N.C.Sharda The Mr.Karunakar Presiding IRICEN/Pune, Pune-411001. Southern Dy.Director, Deputy Arbitrator Railway, Chief Kalakshetra K.Menon Engineer/GC Madurai & Senior Foundation, 625001. Professior/Track-1 Chennai Southern (formerly Railway) Dy.FA&CAO/G/MAS,





Reserved 20~08~2019 on

Delivered 10~09~2019 on

Petitioner .Vs.


O.P.No.4 of 2015

5. Mr.M.A. Park Southern CME/Planning Town, Inbarasu, Railway, Chennai 600003. Prayer: 23.05.2014 Conciliation Petition passed Act, filed 1996 by Respondents under praying Section * * to 3 * to set 5. 34 For For Respondents: Petitioner :


aside of the the Arbitration Award dated and

: Respondents aside of the the Arbitration Award dated and Mr. Mr. for M/s.S.Varsha P.T. Naveen

Mr. Mr. for M/s.S.Varsha P.T. Naveen Ramkumar Kumar Murthi [for R1 and R2]

Challenging the Three O Members R D E R Arbitral Award, the present Original 2. The Petitionhas brief facts been leading filed. to file this O.P. is as follows:

ballast of “collection doubling 2(a) between The and of the Respondent/Petitioner supply Dindigul track of (excluding)and between 50mm size Dindigul herein machine Madurai & Madurai has crushed (including) awarded section” hard the as granite to a work part the


O.P.No.4 of 2015

with 13.11.2006 claimant a date on of was completion 22.08.2006 executed as by 21.06.2007 and them agreement for the (ten value months). No.183/CN/06 of Rs.6,18,24,000/- dated condition time. were exorbitant 2(b) However, awarded of It rate. contract. is the Despite on contract case relaxed It of is his the his was plea claimant specification further terminated. for relaxing case that that of work It the 25% thereafter is was impact not impact not as value completed risk per value tenders to general 25% at in was impact quantity. & terminated cost not tender, value considered The after had specification the the been risk by last & the considered cost Respondent. of extended is the not ballast he tenable date would It has is which and been have the the plea is changed supplied contract also of relaxation not in the was the legally entire also risk of correct. terminated terminated risk amount work work claimed was is got as awarded counter completed to claim the through is same not maintainable. contractor. another contractor. Therefore, the

As per Clause 62(B)(b) of GCC the risk amount is payable Final if


contractor. Therefore, the As per Clause 62(B)(b) of GCC the risk amount is payable Final if

O.P.No.4 of 2015

The contract partial 2(c) was It is due the to case poor of progress the respondent of ballast that supply the termination by the claimant. of the contract improvement. ballast claimant termination giving 7 every partially days did notice not month. on Therefore, show for 21.02.2007 on 40000 09.04.2007. proper Despite cum. the and progress several respondent 48 The hours as notices termination per notice forced approved he on did to was 23.03.2007 not terminate programme done show as and any the the of condition not be 2(d) accepted of The contract. claimant as in Relaxation the requested tender in condition abration for The lowering lowering vide and clause of impact of specification the 2.2.1 value specification of shall special could be ballast doubling. the has cost claimant to of be in ballast time resorted Moreover, as so with otherwise as to original to lowering due get risk to the specification the the amount ballast failure specification in would of would time the have for has claimant have for been been been targeted even to beneficial more. supply more work The the as to of

termination was done as per Clauses 62 of GCC after

as to of termination was done as per Clauses 62 of GCC after given prior to

given prior to invitation of tender.


O.P.No.4 of 2015

respondent did had not not improve even has forced the applied supply to terminate for position extension. the even contract after Learned partial finally three termination as the members claimant and Arbitrators as entirety. risk & Challenging cost finally amount allowed the and same the dismissed counter the present claim the claim Original to tune of the Petition of Rs.1,70,96156 petitioner has been in

tune of the Petition of Rs.1,70,96156 petitioner has been in before dismissal f i l e

before dismissal filed. 3. this Though of court the the is claim only Original and with also regard Petition the to counter has the been counter claim, filed claim the challenging awarded main focus the by the Arbitrators. 4. The learned counsel appearing for the petitioner vehemently within three over submitted has also the years a reasonable award submitted that and the seven has Award time been that months. period. has passed the been Tribunal The But after passed Award in this 3 has years ought with case completely 7 an after to months. inordinate have the been ignored hearing Besides delay passed was the he of


O.P.No.4 of 2015

The supply 22.8.2006 20% contract impact the for to same supply 21.06.2007. value due of to 96000 be But effected cm however, of 50 within mm the machine 10 petitioner months crushed was period unable ballast from at to contention of procured 20.02.2007 impact performing value. anywhere that whereby 20% the Railways said of in the the the condition themselves impact impact surrounding value and value have issued specification area. considered specification a general Therefore was the circular could relaxed impossibility it not is dated from his be 20% several however, exercise the 40,000 was specification. sought to 5. 25% cubic requests In their the view to for metre powers Railway be all However, of to performed contracts was the the under did removed above Railways not issued the en by masse consider contract way relaxation partial from to of from relax a under the the termination risk then the petitioner's same the clause tender petitioner onwards. specification. and 42(1) at notice contract also the has to whereby risk did modify made and and But not

fundamental principle of contract law while deciding the dispute.

principle of contract law while deciding the dispute. to non-availability of the said ballast at 20%

to non-availability of the said ballast at 20%


O.P.No.4 of 2015

specification cost successful cost of tender the bidders, Petitioner. lost to 25%. its character the Therefore, While Railways issuing of it being arbitrarily is his the the contention risk risk and and and unilaterally cost that cost tender such tender risk relaxed to and and the became changed tender. a and The completely the risk same and fresh cost could tender tender. not be was The considered awarded entire contract as with a risk a completely itself and gets cost different petitioner learned certainly contention would be Arbitrators held violation scope in that the liable once of contract. of have under work fundamental the not the than scope Therefore, considered risk what of and policy work was cost it this of is is of originally aspect India. his changed, the contention same. and It agreed the is the Similarly his Petitioner Award that by further the the the is Tribunal Railways' contract frustrated. also own has Hence not circular become the considered award dated impossibility has 20.02.2007 the to be change set of and aside. performance of also circumstances not considered and become by that the 6. In support


not considered and become by that the 6. In support 7/23 of his contention he relied

of his contention he relied upon the following

O.P.No.4 of 2015

judgments: 1. Electricals Harji Engg.Works Ltd. & Another Pvt. [2009 Ltd., vs. (107) Bharat DRJ Heavy 213] 2. [(2007) Russ Edwinton Union (Worldwide of EWCA India Commercial and Civ others Salwage 547] Corporation vs. Tantia & Towage) and Constructions Tsavliris Ltd.,


7. Learned Private counsel Limited. appearing [(2011) for 5 SCC the 697] Respondent would submit several contract that though opportunities the the contract Petitioner was given partially has to the not terminated petitioner supplied the he on materials has 09.04.2007. not fulfilled as per Even the the completing termination objection 17.5.2004. same. Further, whatsoever the was Partial the balance done petitioner termination raised work. as with per is It also was is regard the his executed done Railway further to the after rider contention subsequent Board adequate agreement Circular that contract notice the with dated final was for no given. Despite the extension was granted he has not supplied the


O.P.No.4 of 2015

The petitioner himself would have

materials as per the contract. considered portion Rs.9,000/- work arbitrators. part, applied with he for of has per by increase tender the Merely 10 not the work, cum for arbitrators. because done impact risk during the so. and the contract value the Entire cost contract period of aspect for 25% of was completion execution at awarded was much considered of of to higher the the complete remaining remaining rate by the the of evidence. per contention entire the arguments contract that three terms. and member arrived This court Arbitrators a just cannot finding. have re-appreciate passed Therefore, the the Award it is entire his as have been and Award the been given no same prejudice considered. and is liable the whatsoever matter to Hence, be dismissed. has this occurred. been Original heard Sufficient Petition in length. is opportunities not All maintainable the points has Court in 8. the The following scope of judgments: interference of the Award is dealt by the Apex

of judgments: interference of the Award is dealt by the Apex The Arbitrators awarded to have

The Arbitrators awarded to have the considered claimant was the

It is his further contention that mere delay in passing the



O.P.No.4 of 2015

Ltd., Court contrary the Arbitration [2003 10(a) has to: held (5) Scope SCC and that of 705], Conciliation an interference Award wherein can Act the under be 1996 Honoruable set Section aside is discussed if 34 Apex it of is

in Oil and Natural Gas Corporation Ltd., v. Saw Pipes

c) a) b) d) justice fundamental the if it interest is patently or morality; of
c) a) b) d) justice fundamental the if it interest is patently or morality; of policy India; illegal or of or Indian law; or

court. unreasonable Award could that also it be shocks set aside the if conscience it is so unfair of and the patently that the would findings materials 8(b). Act. the be The Arbitral illegal of In exercised to the the power show or Arbitrator Award case in that of only contravention on the is this in on hand, Court cases this case the court to considering face where requires set of of the do aside the it not provisions erroneous interference Court the the find Award entire finds any or of under Ltd., 2015(5) Section v. SCC Hindustan 34 739 of the the Copper Honourable Act. In Swan Ltd Apex reported Gold Court Mining has in


held as follows:

sub-section for award conditions 30 and Arbitrator’s binding of setting Conciliation the "12. may between Arbitration Section aside (2) specified be decision of Act, set the Section the Act, 1996 arbitral aside 34 parties therein is of 1940 34 corresponds generally of only award. and making the the is if Act, satisfied. therefore, one In a Arbitration considered an to provision terms arbitral Section of The the the of power exercised the patently provisions proposition substitute arbitral of the only illegal its award of that Court in the interpretation cases the or is to on Act. set Court in where the aside contravention It fact shall the the is for of Court a award it not that erroneous well ordinarily finds would of of settled that the the be or arrived basis then Arbitrator illegal." substituting of at those a or concluded by terms the new and Court terms contract conditions would in the the and be contract of erroneous acted the contract on by the the or

Arbitrator. Similarly, when parties have

appointed The finding "13. by It is the of equally parties facts well recorded is the settled final by that judge him the of cannot Arbitrator the facts. be

O.P.No.4 of 2015


contract interfered were with not on correctly the ground interpreted that the by terms him." counsel of the the (supra), the any conflict arbitral substance case with observed award of the Oil in on public and the that the said Natural the policy ground term submission. of Gas ‘public India. that Corporation the We policy This same do Court, of not India’ is Ltd. find in in of interest view, contrary Court rescue have challenged jurisdiction and conditions entered the held of of to said the India, before of fundamental that into appellant. the decision of or an it the Court concluded becomes if award said there will As where policy contract, noticed not is can final contract, patent the in of be and any validity Indian above, which set illegality. executable. agreeing way aside of the was law come award if parties In or finally terms it into The our the is is acted contract the Even the contrary against illegality. ground award assuming upon. the cannot to interest cannot that In fundamental the back such the be of ground same out India a set case, and is aside policy available or against the challenge on as the parties of because the to ground Indian the the public to appellant, award of it the law policy. patent is said not on or

appearing "21.

for Mr.

the Sharan, appellant, learned also

senior challenged

is required to be interpreted in the context

O.P.No.4 of 2015


O.P.No.4 of 2015

22. The words “public policy” or “opposed to the determine above, precluded arrive public arbitral Arbitration Contract Arbitrator, at the policy”, award Act different from interpretation and and is who and find against re-appreciating Conciliation decide is also conclusion a reference Judge, the Section the of public the dispute. chosen Act, by contract in the 34 policy." Section holding 1996. (2)(b)(ii) evidence by The the is As 23 matter parties Court that and of of stated the the the to to of is

is to be kept at minimum level
be kept
minimum level

illegality root [2006 unfair International the Court. of 8(c). and the (11) and unreasonable matter. The The held SCC Honourable Inc., supervisory that Public 181] v. patent as Policy Burn explained Apex to role illegality shock violation Standard Court of the the the must in conscience should term McDermott Court Co.,Ltd., go patent to under be the so of interference violation gone contract that would contrary or of come granted natural is to envisaged or within justice, relief beyond the only in etc., the the purview in a express matter case If the of of not Arbitrator Section fraud of law in or dispute of 34 bias, has the of the Arbitration and Conciliation Act 1996.

Section 34



O.P.No.4 of 2015

v. envisaged court Award 588] Venkatraman also can and be under followed held interfered. Ganesh the that the decision and above only Another of in judgment the the [2018 Apex circumstances of Court the (6) Apex MLJ the

this Mrs.Ranjani Court in

Puravankara 8(d). A

Projects Division

Bench Limited of

Puravankara 8(d). A Projects Division Bench Limited of the the Development Honourable substantive 8(e). In

the the Development Honourable substantive 8(e). In Authority Apex law Associate of Court India reported has would held Builders result that in (2015) a in contravention the Vs. death 3 SCC Delhi knell 49, of statutory award Such administration contrary Furthermore, of an award arbitral which provisions to /judgment/decision is, award. the the of on justice binding fundamental cannot the Violation fact and be effect of would said of is ti, policy likely Indian of patently to be be the to regarded in statutes of adversely judgment public in Indian violation as interest. i.e., affect being of law. the of a superior of understood root the of the fundamental court matter in being the sense and disregarded policy cannot that of such be Indian would of illegality a be law. trivial equally must This nature. go must violative to This the be again Act follows: 1996. is The Honoruable Apex Court further held as

really a contravention of Section 28(1)(a) of the


sub-heads: 'patent '42. In illegality' the 1996 principle Act, this principle which, in is turn, substituted contains by three the the This to must would 42.1.(a) the '28.Rules the Act, place again be root result which understood A an of applicable contravention of is arbitration in the really reads the matter in as death a to the contravention under: is substance situated and of sense knell the cannot that of substantive in of an India_ such be of dispute arbitral Section of illegality a trivial law award. 28(1)(a) of must nature. India This go of regarded (b) gives substantive the commercial 42.3. 31(3) dispute A of no (c) contravention the reasons as Equally, submitted Act, a law arbitration, patent such for for the the illegality of an award to third time the award the arbitration Arbitration will subhead Arbitral being _ in for be contravention liable example in in Tribunal of force accordance Act patent to be itself in if an set India.' shall illegality of arbitrator would aside. with Section decide 42.2. the be is really Act, which "28. dispute. a contravention reads Rules as under: applicable of Section to 28(3) substance of the Arbitration of (1) (2)

in arbitration other than an international (1) Where
international (1) Where


O.P.No.4 of 2015

O.P.No.4 of 2015

the shall contract decide (3) of In in and all accordance cases, shall take the with Arbitral into the account terms tribunal the of contract arbitrator Construction that that of terms An This the arbitral no last the transaction." of contract fair in the contravention to award such minded tribunal contract, of decide in the a way a can or terms reasonable must unless reasonable but that must be if of it decide an set could the a be contract arbitrator manner, understood person aside arbitrator in be accordance said is could on construes it primarily to will construes with this be do.' something not a with ground. caveat. a for mean term the the an







for mean term the the an usages the trade applicable to the Another Harji reliance 9.

Another Harji reliance 9. Engg. No has [2009 doubt been Works (107) the placed Pvt. Award DRJ on Ltd., has the 213]. vs. been judgment Bharat In passed the Heavy of above with the judgment Delhi Electricals some High delay. the Court Ltd. Much Delhi & in without in hearing High passing Court finally has the taking not concluding Award. been note properly Accordingly, of the the hearings concluded fact held that and that and after there the award certain is Award an has inordinate hearings, has been to passed be delay the set


O.P.No.4 of 2015

the aside. Hardyal judgment In 1985 the above of (2) the SCC judgment, Honourable 629 and the Apex Flowmore learned Court Single in Pvt. State Judge Ltd., of v. has Punjab National referred v. Thermal held as follows: Power Corporation Ltd., [ILR (1996) 2 Del 476] and

Power Corporation Ltd., [ILR (1996) 2 Del 476] and contentions "20. It and is natural pleas

contentions "20. It and is natural pleas raised and normal by the parties for any during arbitrator the course to forget of

upon a should explanation make and element arguments, effective, the go reference document reasonable into respondent the facts and merits date be of just etc. publish and to if is public explained. time. on & there for undue and the circumstances had fair, which deciding an What demerits written is policy submitted must delay OMP a the huge is Abnormal be whether No.241-2006 reasonable and in award of submissions, gap concluded of that it. the causes each between Arbitration claims is this the delay case. made. time prejudice. award Court expeditiously. Page and the Is claim is without An case flexible should No.12 counter last is proceedings Arbitrator justified. Each there petition, date award examine and satisfactory claims case Counsel of is depends delay, In hearing should has within reply, to other with and for an be it documents. defeat fledged words, shoes objections of the counsel hearing the under very This Arbitrator for purpose Section should or the trial respondent or not of 34 as before arbitration of an be the appellate permitted wanted the Act Court, with and the court and would reference Court while allowed decide result to adjudicating step to the as the into into present it said will full the


O.P.No.4 of 2015

objections of decided judgment. facts and on under Under entirely law. Section Courts the Act, different 34 have an of Arbitrator limited the principles Act. power Objections is supposed and to an set are award aside to required be an sole is award not judge to be a as additional make undue required provided and OMP to publish responsibility give No.241-2006 in Section detailed an award 34 judgments, and of Page within the obligation No.13 Act. a but reasonable The delay. only upon Act, indicate Arbitrators therefore, an time Arbitrator and grounds imposes without are not or to

an time Arbitrator and grounds imposes without are not or to rejecting taken before which satisfaction

rejecting taken before which satisfaction reasons effective will very redressal. undue be purpose is delay an into contrary passed for hearing, or Arbitrator Delay partly that and consideration rejecting and after which therefore to the without rejecting the justice and learned a is or fundamental period patently the unjust." accepting and satisfactory their their same Arbitrator of would three claims. bad contentions should basis claims. and defeat years explanation This not was unexplained, for justice. from be A is conscious alternative and denied. party a right the for It pleas date defeats must constitutes of the An and a dispute award of before delay, party have had last the

Arbitrator the hearing course 10. and The to of forget arguments. the above date contention judgments on There which and make is a the pleas huge it Award clear gap raised that between has by it been the is the natural parties made. last for date during The any of Arbitrators should make and publish the Award within a reasonable


O.P.No.4 of 2015

time. What is reasonable time is flexible and depends upon the facts certainly same explained. counter and circumstances makes claim cause The it clear, prejudice was abnormal of raised claim each to case. statement the on delay other 20.12.2008 In without case was party. there filed In and satisfactory on is the a hearing 30.09.2008 delay, present it explanation started Award should and the the on be submissions 15.5.2009 the after award more and than has were further not three also been years details received passed. and on on 7 by 3.2.2009. months The the Arbitrators Arbitrators have Thereafter passed on on 25.3.2014 28.1.2009 it the appears Award that i.e., and and the Heavy High delay Court 11. Electricals In has case para not further 16 been Ltd. of explained the held & Another Harji as follows: in Engg.Works the [2009 entire (107) award. Pvt. DRJ Ltd., 213] vs. the Bharat Delhi



and completed 1.2.2011.


Commercial (See, ensure Sections "16. fast The arbitration and Act 4,12,13,16, based quick on process 23 UNCITRAL disposal and should 34(3) and Model of be curtail efficient Law the seeks delays Act). and to


O.P.No.4 of 2015

prosper disputes and decided grow. expeditiously Contractual for rights trade and and obligations commerce to to alternative proceedings and with delays encourages Arbitration have policy quick meaning reasonable of normally law to implies disposal breaches. are court should that dispatch encouraged adjudication. timeous arbitration associated of be Arbitration disputes enforced. decisions and because proceedings with Its proceedings between promptness. Delay primary and court defeats they promptitude. parties objective should must proceedings. are Arbitration justice without be speedy not is held It and fast be is unduly expected prolonged. to be prompt." Arbitration proceedings, therefore, are

to be prompt." Arbitration proceedings, therefore, are Finally unexplained same has the to Delhi be reason

Finally unexplained same has the to Delhi be reason set High side. that Court award concluded is violation that when of public there policy is a delay and with the been Arbitrators despatched stated do not 12. passed for indicate In the clearly only this after huge the case on 3 delay indicate reason 11.11.2014. years also in on passing and for that perusal such 7 the months. There the delay. of Award Award. the is The no Therefore, records dated Even letter reasons the 23.5.2014 the issued applying entire whatsoever Award by award was has the the


O.P.No.4 of 2015

very months above Act ratio after which and completion is delay required in of passing to the pass hearing, the the award award which beyond within is certainly a three reasonable years against and time. the 7 also in public the In the the award, raised eye policy absence of with such of law India. of regard in delay any view Therefore, explanation in to of fact the the certainly delay contract the or alone. above reason become have Award Though, for impact frustrated the cannot other delay and be contentions violation and in sustained passing Clause of court of and 42.1 raised Railways vitiated of is during of the the contract during by view Arbitral long that the has delay, proceedings. currency since not the been the above award of considered contract The itself aspects respondents has is and not are not subsequent in kept according considered, 1 open and circular to 2 to this law are be directed from since other are claim at the the aspects alone liberty to date challenge appoint originally. have of to receipt canvas not is only been of their On copy with such challenged respective of regard this reconstitution Order to before case the and as counter this of it against is Court, the made claim Tribunal the the clear and counter parties that the the

fresh Arbitrators within a period of three months


the clear and counter parties that the the fresh Arbitrators within a period of three months

O.P.No.4 of 2015

learned Award within Arbitrator(s) three (3) shall months hear thereafter. the counter claim alone and pass

are allowed. months appointment directed 13. from With The to the the Counter the appoint learned date above Claim of fresh Arbitrator(s) receipt observation alone Arbitrators of is copy set the shall within aside. of Original hear this a Respondents Order period the Petition counter and of three is on 1 and partly claim such (3) 2 Consequently connected an Original Application is closed. No cost.

and Copy ggs Speaking/Non-speaking Internet: Index to: : Yes Yes / No order The The Southern Chennai Southern Deputy General 600003. Railway, Railway, Chief Manager Engineer/GC Madurai Park Town, 625001.



pass Award within three (3) months






O.P.No.4 of 2015


O.P.No.4 of 2015 N. SATHISH KUMAR, ggs J. O.P.No.4 of order 2015 in: and O.A.No.31 of

O.P.No.4 of order 2015 in:

and O.A.No.31 of 2015