Gauhati High Court
Arb.A./18/2019 on 20 April, 2026
1
GAHC010092912019
2026:GAU-AS:5380
IN THE GAUHATI HIGH COURT
HIGH COURT OF ASSAM, NAGALAND, MIZORAM & ARUNACHAL PRADESH)
Arb.A./18/2019
1. Indian Oil Corporation
(Bongaigaon Refinery),
A Government of India Company, P.O.
Dhaligaon, District - Chirang,
Assam, Pin- 783385.
......Appellant
-Versus-
1. M/S Esteem Projects Private Limited,
B-39, Sector- 67, Noida (UP)- 201301.
......Respondent
For Appellant : Mr. R. Choudhury, Advocate
For Respondent : Mr. G. N. Sahewalla, Senior Advocate
Mr. H. K. Sharma, Advocate
Date of Hearing : 06.01.2026
Date of Judgment : 20.04.2026
Arb.A./18/2019 Page 1
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BEFORE
HON'BLE MR. JUSTICE MRIDUL KUMAR KALITA
JUDGMENT
1. Heard Mr. R. Choudhury, the learned counsel for the
appellant. Also heard Mr. G. N. Sahewalla, the learned senior
counsel assisted by Mr. H. K. Sharma, the learned counsel for
the respondent.
2. This appeal under Section 37 (1) (c) of the Arbitration and
Conciliation Act, 1996 has been filed by the appellant, namely,
Indian Oil Corporation (Bongaigaon Refinery), impugning the
judgment and order dated 26.02.2019 passed by the Court of
the learned District Judge, Chirang, Kajalgaon, in Misc.
(Arbitration) Case No.18/2016, whereby the application filed
by the appellant under Section 34 of the Arbitration and
Conciliation Act, 1996 for setting aside the arbitral award
dated 28.04.2016 was dismissed.
3. The facts relevant for consideration of the instant appeal, in
brief, are that the respondent herein was found as the
successful bidder in a tender floated by the appellant for the
work of “Heater package for the DHDT (Diesel Hydro-
Treater) project”, Dhaligaon, Assam. The Letter of Intent
(LOI) in respect of the work order No.2007/PC-1234 was
issued in favor of the respondent on 16.08.2007. The letter of
acceptance (LOA) was issued on 29.07.2007. The lump sum
contract value of the work to be carried out by the respondent
was USD 17,80,000/- (USD Seventeen Lakh Eighty Thousand
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Only) plus Rs. 18,72,20,000/- (Rupees Eighteen Crore
Seventy-Two Lakh Twenty Thousand Only). The
commencement date of the said contract was 16.08.2007 and
the date of completion was 13 months from the date of LOI
i.e., on 15.09.2008. However, the work was completed by the
respondent on 10.08.2011, after a delay of 1059 days in
completing the contract work.
4. The respondent, after completion of the work, by letter dated
07.12.2011, sought extension of time for completion of work
up to 10.08.2011. The appellant by its letter dated
20.08.2014, informed the respondent of the approval of
competent authority regarding allowing extension of time up
to 10.08.2011 to complete the work in question with
imposition of Liquidated Damages (LD) amounting to 10% of
the total contract value as per Clause 4.4.0.0 of the General
Conditions of Contract (GCC). The LD amount was estimated
at Rs. 2,59,57,700/- (Rupees Two Crore Fifty Nine Lakh Fifty
Seven Thousand Seven Hundred only).
5. It is pertinent to mention herein that the respondent
submitted the final running account bill on 19.04.2012 for an
amount of Rs. 23,27,946/- (Rupees Twenty Three Lakh
Twenty Seven Thousand Nine Hundred Forty Six only).
6. Against the decision of the appellant regarding the deduction
of the LD, the respondent initiated arbitration proceedings by
filing statement of claims dated 10.09.2014 before the Indian
Council of Arbitration (ICA) with following claims –
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(i) Amount due under RA Bill No. 24 dated 19.04.2012 of
Rs. 23,27,946/-;
(ii) Reimbursement of legal fees for opinion on procedure
for post facto clearance and job work for imported
material for Rs. 22,000/-;
(iii) Reimbursement of demurrage/cost incurred on imported
dues for Rs. 22,80,109/-;
(iv) Additional cost incurred towards air freight on imported
tubes;
(v) Fluctuation in exchange rate for Rs. 1,00,21,890/-;
(vi) Reimbursement of excise duty in terms of other than
steel for Rs. 33,03,818/-;
(vii) Reimbursement of excise duty in terms of other than
steel for Rs. 42,42,410/-;
(viii) Bank charges paid for extension of performance bank
guarantee for Rs. 8,40,134/-;
(ix) Charges for pre dry out of refractory for Rs. 10,00,000/-
;
(x) Compensation for extended stay for Rs. 58,50,000/-;
(xi) Reimbursement of Liquidated Damages for Rs.
2,59,57,700/-;
(xii) Loss of opportunity for Rs. 2,59,57,700/-;
(xiii) Interest of Rs. 2,58,63,045/-;
(xiv) Cost of arbitration.
7. On receipt of the aforesaid statement of claims in the
arbitration proceeding, the appellant submitted its
reply/statement of defence on 18.12.2014. The appellant also
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submitted an application under Section 16 of the Arbitration
and Conciliation Act, 1996 before the Arbitral Tribunal on
18.12.2014 stating therein that the Arbitral Tribunal does not
have jurisdiction to entertain the claims raised by the claimant
as the same are beyond the scope and purview of the
arbitration in terms of the agreement between the parties.
8. The main defence taken by the present appellant in their
statement of defence is that the Arbitral Tribunal lacks
jurisdiction to entertain the claims raised by the respondent in
as much as in terms of clause 9.1.0.0 of the GCC, only a
dispute arising out of notified claims of the contractor included
in the final bill in accordance with the provisions of Clause
6.6.1.0 of the GCC can be the subject matter of the
arbitration. It was contended that none of the claims raised by
the respondent are notified claims in terms of GCC neither the
same were included in the final bill dated 19.04.2012.
9. However, the Arbitral Tribunal, after hearing the parties
passed the arbitral award, on 28.04.2016, whereby, the Claim
No. 2 to 10 and Claim No. 12 raised by the respondent were
rejected by the Arbitral Tribunal as the same were not notified
claims. However, it allowed the Claim No. 1, i.e., payment of
Rs. 23,27,946/- against RA Bill No. 24 dated 19.12.2012. It
also held in respect of Claim No. 11 that the appellant was not
justified in levying the Liquidated Damages. Accordingly, the
present appellant was directed to refund the amount of
Liquidated Damage, namely, Rs. 2,59,57,700/- to the claimant
(the present respondent). Against Claim No. 13, the Arbitral
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Tribunal allowed interest at the rate of 12% per annum from
the date of reference i.e., 08.08.2015 on the Liquidated
Damages of Rs. 2,59,57,700/- as well as on the amount under
RA Bill No. 24 i.e., Rs. 23,27,946/-. In respect of Claim No. 14,
the Tribunal directed that the claimant would be entitled to a
sum of Rs. 25,00,000/- towards the cost of the arbitral
proceeding.
10. Being aggrieved and dissatisfied with the award dated
28.04.2016, the appellant preferred an application under
Section 34 of the Arbitration and Conciliation Act, 1996,
before the Court of the learned District Judge, Chirang. The
said application was registered as Misc. (Arbitration) Case
No.18/2016.
11. During the pendency of the aforesaid arbitration case, the
respondent filed an application under Section 34 (5) of the
Arbitration and Conciliation Act, 1996, alleging that the
petition under Section 34 of the Arbitration and Conciliation
Act, 1996, filed by the present appellant was not maintainable
on the ground of non-compliance of the statutory provision of
serving prior notice on the respondent before filing the
aforesaid petition, as contained in Section 34 (5) of the
Arbitration and Conciliation Act, 1996.
12. The Court of the learned District Judge, Chirang, allowed the
aforesaid application by its order dated 06.07.2017 and held
that the application under Section 34 of the Arbitration and
Conciliation Act, 1996 filed by the present appellant is hit by
Section 34 (5) of the Arbitration and Conciliation Act, 1996,
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and as such, the said application under Section 34 of the said
Act is not maintainable.
13. On being aggrieved by the aforesaid order dated 06.07.2017,
passed by the Court of the learned District Judge, Chirang,
the appellant approached this Court by filing an arbitration
appeal, i.e., Arbitration Appeal No.19/2017. Later on, this
Court, by its order dated 09.08.2018, passed in Arbitration
Appeal No. 19/2017 had set aside the order dated 06.07.2017,
passed by the Court of the learned District Judge, Chirang,
petition under Section 34 (5) of the Arbitration and
Conciliation Act, 1996 filed by the present respondent.
14. The matter was remanded to the Court of learned District
Judge, Chirang for deciding the petition under Section 34 as
well as Section 16 of the Arbitration and Conciliation Act 1996,
which were filed by the present appellant, afresh.
15. Ultimately, by its judgment dated 20.06.2019, which has been
impugned in the instant appeal, the Court of the learned
District Judge, Chirang held that the Arbitral Tribunal has the
jurisdiction to decide the disputes raised by the respondent
regarding liquidated damages deducted from the final bill of
the respondent by the appellant and as such by the aforesaid
judgment, the petition under Section 34 of the Arbitration and
Conciliation Act, 1996, filed by the present appellant, was
dismissed.
16. Mr. R. Choudhury, the learned counsel for the appellant
submits that the Court of the learned District Judge, Chirang,
while passing the impugned judgment dated 26.02.2019,
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erred and failed to take into consideration the aspect that the
arbitral award dated 28.04.2016, passed by the Arbitral
Tribunal, is liable to be set aside under Section 34 (2) (a) (iv)
of the Arbitration and Conciliation Act, 1996. He submits that
the Court of the learned District Judge, Chirang, erred in not
considering the fact that the Claim No.11 of the present
respondent before the Arbitral Tribunal, regarding the
reimbursement of the Liquidated Damages, was not notified in
terms of the Clause 6.6.1.0 the GCC. As such, the same could
not have been the subject matter of the arbitration, in terms
of the Clause 9.1.0.0 of the GCC, before the Arbitral Tribunal.
He submits that the Arbitral Tribunal failed to take into
consideration that only those disputes arising out of the
notified claim of the contractor included in the final bill, in
accordance with the provision of clause 9.1.0.0, are referrable
to arbitration. However, as the dispute regarding deduction of
Liquidated Damages by the appellant was not notified in
terms of the aforementioned clauses of the contract, the
Arbitral Tribunal lacks jurisdiction to entertain any reference
for arbitration.
17. The learned counsel for the appellant submits that as per
Clause 6.6.1.0 of the GCC, if the contractor had any dispute
regarding deduction of Liquidated Damages by the appellant
from the final bill, he ought to have given notice in writing to
the Engineer-in-Charge and the Site Engineer within 10 days
from the date of issuance of order. He submits that any of the
claims of contractor notified in accordance with the provision
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of Clause 6.6.1.0 remain at the time of preparation of final bill
by the contractor, same shall have to be separately included in
the final bill prepared by the contractor in form of a statement
of claim attached thereto in terms of the Clause 6.6.3.0 of the
GCC. He further submits that as per Clause 6.6.3.1, any
notified claim not separately reflected and included in the final
bill in accordance with the provisions of Clause 6.6.3.0 shall
be deemed to have been waived by the contractor. He further
submits that as per Clause 9.1.0.0, only notified claim of the
contractor included in the final bill in accordance with the
provision of Clause 6.6.3.0 may be referred to arbitration as
per Clauses 9.1.1.0 and 9.1.2.0 of the GCC. However, in the
instant case, the claim regarding reimbursement of deduction
of liquidated damages by the appellant was not notified by the
respondent in pursuant to the provisions contained in Clause
6.6.1.0, therefore, the Arbitral Tribunal does not have
jurisdiction to entertain any reference of such dispute to
arbitration under Clause 9.1.0.0 of the GCC. In support of his
submission, the learned counsel for the appellant has cited a
ruling of the Apex Court in the case of “Indian Oil Corporation
Limited Versus NCC Limited” reported in 2023 (2) SCC 539.
18. The learned counsel for the appellant submits that since as
per Clause 9.1.0.0, only disputes arising out of notified claim
are referrable to arbitration and since in the instant case, the
dispute regarding deduction of the liquidated damages by the
appellant was not notified in terms of Clause 6.6.1.0 of the
GCC, the same is a non-arbitrable dispute and it would not be
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open for the Arbitral Tribunal to arbitrate over such a dispute,
since it would be beyond its jurisdiction. He further submits
that this aspect was not taken into consideration by the Court
of the learned District Judge, Chirang while passing the
impugned judgment under Section 34 of the Arbitration and
Conciliation Act, 1996.
19. The learned counsel for the appellant submits that that such a
dispute, which is not notified in terms of the aforesaid clauses
of the GCC, may be treated as those kind of dispute which are
specifically excluded from the purview of arbitration clause
and as such, the same would not be referrable to arbitration,
therefore, the Court of the learned District Judge, Chirang as
well as the Arbitral Tribunal failed to consider this aspect while
assuming jurisdiction to arbitral dispute referred to it. In
support of his submission, the learned counsel for the
appellant has cited a ruling of a Coordinate Bench of this
Court in the case of “Bongaigaon Refinery Versus Buildworth
Private Limited”, reported in 2019 SCC online GAU 2820.
20. The learned counsel for the appellant has also submitted that
since the delay in execution of the work is apparent in this
case and the same is attributable to the contractor, the
appellant has rightly invoked the provision of Clause 4.4.2.0 of
the GCC and levied 10% of the total contract value as
liquidated damages on the respondent to compensate the loss
suffered to the appellant due to breach of contract by the
respondent in completing the contract work beyond the
stipulated time as provided in the contract. He submits that
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same is in terms with the spirit of law as contained in Section
73 of the Contract Act, 1872.
21. The learned counsel for the appellant also submits that the
Court of the learned District Judge, Chirang, while considering
the application under Section 34 of the Arbitration and
Conciliation Act, 1996 filed by the present appellant also failed
to take into consideration the fact that though the Arbitral
Tribunal rejected the Claim No. 2 to 10 and 12 of the
respondent, as the same were not notified claims in terms of
Clause 6.1.0.0, whereas, the claim in respect of liquidated
damages was dealt with by adopting a different reasoning by
the Tribunal, which is blatantly illegal. He submits that the
Arbitral Tribunal erred in arbitrating over a non-arbitrable
dispute as per the agreement between the parties. He also
submits that the arbitral award is also liable to be set aside
under Section 34 (2) (b) (i) as well as (ii) of the Arbitration
and Conciliation Act, 1996.
22. On the other hand, Mr. G. N. Sahewalla, the learned senior
counsel for the respondent has submitted that the Court of
the learned District Judge, Chirang has rightly dismissed the
application under Section 34 of the Arbitration and
Conciliation Act, 1996, filed by the present appellant
challenging the arbitral award passed by the Arbitral Tribunal
on 28.04.2016. He submits that in page No.13 of the arbitral
award, the Arbitral Tribunal has observed that the objection as
to deduction of liquidated damages by the appellant may not
be regarded as a claim and hence, the notification of the said
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objection under Clause 6.6.1.0 of the GCC is not necessary for
referring any dispute arising out of such deduction to
arbitration in terms of Clause 9.1.0.0 of the GCC.
23. The learned senior counsel for the respondent has submitted
that the Arbitral Tribunal has correctly held that since the
deduction against liquidated damages were made after 2.5
years of the submission of final RA bill as well as after expiry
of defect liability period on 09.08.2012, the objection
regarding deduction of liquidated damages could not have
been raised in the final bill by the respondent and as such, the
same could not have been notified in terms of the provision
contained in Section 6.6.1.0 of the GCC. He submits that the
view taken by the Arbitral Tribunal regarding its jurisdiction to
entertain the reference cannot be regarded as perverse.
Hence, the Court of the learned District Judge, Chirang was
right in not interfering in the view taken by the Arbitral
Tribunal as in a proceeding under Section 34 of the Arbitration
and Conciliation Act, 1996, it cannot sit as the Court of appeal
over the findings of the Arbitral Tribunal.
24. He further submits that the interpretation of the terms of
contract is primarily for an arbitrator to decide, and unless the
arbitrator construes the contract in such a way that it could
not be said to be something that no fair-minded or reasonable
person could do, same cannot be faulted with. He submits
that the Court should not interfere with an award merely
because an alternative view on facts and interpretation of
contract exists. He submits that the court needs to be
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cautious and should defer to the view taken by the Arbitral
Tribunal even if the reasoning provided in the award is implied
unless such award portrays perversity unpardonable under
Section 34 of the Arbitration and Conciliation Act, 1996. He
submits that the Court of the learned District Judge, Chirang
is, therefore, right in not interfering with the interpretation
given by the Arbitral Tribunal while discarding the objection
regarding its jurisdiction to entertain the reference of the
dispute to the arbitration.
25. The learned senior counsel for the respondent submits that
the final RA bill was submitted by the respondent in the year
2012 itself, whereas, the decision to deduct liquidated
damages was made by the appellant in the year 2014 as such,
the said claim could not have been included in the final bill,
which was submitted two years prior to imposition of LD by
the appellant. The learned senior counsel for the respondent
submits that this aspect was also taken into consideration in
Page No. 79 of the impugned judgment by the Court of the
learned District Judge, Chirang.
26. He also submits that the reasoning given by the Court of the
learned District Judge, Chirang for agreeing with the finding of
the Arbitral Tribunal that the dispute regarding deduction of
liquidated damages by the appellant could not have been
included in the final bill, should not be regarded as perverse
so as to justify any interference by this Court in the
impugned order passed by the learned District Judge, Chirang
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in exercise of its powers under Section 34 of the Arbitration
and Conciliation Act, 1996.
27. The learned senior counsel for the respondent submits that
when it comes to the scope of an appeal under Section 37 of
the Arbitration and Conciliation Act, 1996, the jurisdiction of
an Appellate Court in examining the order refusing to set
aside an award is all the more circumscribed. He submits that
if the view taken by the Arbitral Tribunal in the interpretation
of contract is a possible and plausible view, merely because
another view can be taken may hardly be ground for
interference with the arbitral award.
28. The learned senior counsel for the respondent has also
submitted that since the contract work has already been
completed in the year 2011 and since the final RA bill was
also submitted in the year 2012, there may not be any
Engineer-in-Charge or Site Engineer after two and a half years
of completion of the said work. Hence, the question of
notifying them does not arise. He also submits that this Court
while exercising its jurisdiction under Section 37 of the
Arbitration and Conciliation Act, 1996 cannot travel beyond
the restrictions laid down under Section 34 of the said Act. He
submits that this Court cannot undertake an independent
assessment of the merit of the award and must only ascertain
that the court of learned District Judge, while exercising the
powers under Section 34 of the Arbitration and Conciliation
Act, 1996 has not exceeded the scope of the provisions. He
submits that it is evident that in the case where an arbitral
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award has been confirmed by the Court under Section 34 of
the Arbitration and Conciliation Act, 1996, this Court should be
very cautious in interfering with such a finding of the Court.
He submits that the Court of the learned District Judge,
Chirang has rightly dismissed the application under Section 34
of the Arbitration and Conciliation Act, 1996 filed by the
present appellant and has rightly refused to interfere with the
arbitral award passed by the learned Arbitral Tribunal,
therefore, he submits that this appeal does not have any merit
and is liable to be dismissed.
29. In support of his submission, the learned senior counsel for
the respondent has cited the following rulings:
(i) OPG Power Generation Private Limited Versus M/s ENEXIO
Power Cooling Solutions (I) Private Limited and others re-
ported in 2025 (2) SCC 417.
(ii) UHL Power Company Limited Versus the State of Himachal
Pradesh, reported in 2022 (4) SCC 116.
(iii) MMTC Ltd. Versus M/s Vedanta Limited reported in 2019 (4)
SCC 163.
(iv) Reliance Infrastructure Ltd. Versus State of Goa reported in
2024 (1) SCC 479.
(v) Olympus Superstructures Private Limited Versus Meena Vi-
jay Khetan and Others reported in 1999 (5) SCC 651.
(vi) Associate Builders Versus DDA reported in 2015 (3) SCC 49.
(vii) S V Samudran Versus The State of Karnataka reported in
2024 (3) SCC 623.
30. I have considered the submissions made by the learned
counsel for both sides and have gone through the materials
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available on record. I have also perused the rulings cited by
the learned counsel for both sides in support of their
respective submissions.
31. The main contention of the appellant in the instant appeal
under Section 37 (1) (c) of the Arbitration and Conciliation
Act, 1996 is that the Court of the learned District Judge,
Chirang, while considering the application under Section 34 of
the Arbitration and Conciliation Act, 1996, filed by the present
appellant, as well as the Arbitral Tribunal itself, did not
consider the objection raised by the present appellant before
both the Forums regarding the lack of jurisdiction of the
Arbitral Tribunal to entertain the arbitration proceedings.
32. It is contended that the dispute regarding the imposition of
liquidated damage by the present appellant on the respondent
was not notified in terms of the Clause 6.6.1.0 of the GCC,
therefore, said dispute could not have been referred to
arbitration under Clause 9.1.0.0 of the GCC.
33. For the sake of convenience Clause 6.6.1.0 of the GCC is
quoted herein below:
“6.6.1.0 – Should the contractor consider that he is
entitled to any extra payment or compensation in
respect of the works over and above the amounts
due in term of the contract as specified in Clause
6.3.1.0 hereof or should the contractor dispute the
validity of any deductions made or threatened by
the Owner from any Running Account Bills or any
payments due to him in term of the contract, the
contractor shall forthwith give notice in writing of
his claim in this behalf to the Engineerin-Charge and
the Site Engineer within 10 (ten) days from the date
of the issue of orders or instructions relative to anyArb.A./18/2019 Page 16
17works for which the contractor claims such
additional payment or compensation, or on the
happening of other event upon which the contractor
bases such claim, and such notice shall give full
particulars of the nature of such claim, grounds on
which it is based, and the amount claimed. The
contractor shall not be entitled to raise any claim, or
shall the Owner anywise be liable in respect of any
claim by the contractor unless notice of such claim
shall have been given by the contractor to the
Engineer-in-charge and the Site Engineer in the
manner and within the time aforesaid, and the
contractor shall be deemed to have waived any or
all claims and all his rights in respect of any claim
not notified to the Engineer-in-charge and the Site
Engineer in the matter and within the time
aforesaid.”
34. It appears that the objection regarding jurisdiction of the
Arbitral Tribunal for want of notifying the dispute regarding
deduction of liquidated damages from the final bill of the
respondent was raised before the Arbitral Tribunal also. The
Arbitral Tribunal rejected the said objection mainly on the
ground that according to it, the respondent is not asking for
any additional payment from the appellant and in that sense,
it was not regarded as a claim, it only objected to the
deduction of liquidated damages after more than two and a
half years after submission of final RA bill, much after the
lapse of defect liability period which expired on 09.09.2012.
The Arbitral Tribunal also held that since the objection to the
deduction made by the appellant as liquidated damages was
not any additional claim by the respondent. There is no
question of including the same in the final RA bill submitted
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by the respondent and accordingly, it held that it does have
jurisdiction to entertain the arbitral proceedings.
35. It also appears that the Court of the learned District Judge,
Chirang while considering the application under Section 34 of
the Arbitration and Conciliation Act, 1996, has held in Page
No. 79 of the impugned judgment that as demand for
imposition of liquidated damage as the liquidated damages
were imposed on the respondent much after submission of
final RA bill by it, hence, it was not possible for the present
respondent to have mentioned the claim of reimbursement of
deduction of liquidated damages in the said bill.
36. It also appears that the Court of the learned District Judge,
Chirang has also held in page no. 80 of the impugned
judgment that Clause 9.1.0.0 of the GCC contemplates about
two circumstances, under which a dispute may be referred to
arbitration. Firstly, any dispute arising between parties out of
any notified claim of the contractor included in the final bill.
Secondly, any dispute regarding deduction from the final bill
of the contractor or any amount payable by the owner to the
contractor in respect of the work. The Court of the learned
District Judge, Chirang observed that the dispute of illegal
deduction of liquidated damage which was referred to the
arbitration is not included in first part of the Clause 9.1.0.0 of
the GCC, rather, it is included in the second part of the said
clause which allows any dispute regarding any deduction from
final bill of the contractor to be referred to the arbitration.
Hence, the Court of the learned District Judge, Chirang held
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that the Arbitral Tribunal was correct in holding that the
dispute referred to the arbitration by the respondent cannot
be a notified claim, rather it is a dispute regarding deduction
of liquidated damages from the final bill which could not have
been notified in terms of Clause 6.6.1.0 of the GCC.
37. For the sake of clarity, the Clause 9.1.0.0 of the GCC is quoted
herein below:
“9.1.0.0 – Subject to provisions of Clause 6.7.1.0
and 6.7.2.0 hereof, any dispute or difference
between the parties hereto arising out of any
notified claim of the contractor included in the final
bill in accordance with the provisions of Clause
6.6.3.0 hereof and/or arising out of any amount
claimed by the Owner (whether or not the amount
claimed by the Owner or any part thereof shall
have been deducted from the final bill of the
contractor or any amount paid by the Owner to
the contractor in respect of the work) shall be
referred to arbitration as hereunder provided in
Clauses 9.1.1.0 and 9.1.2.0 as applicable.”
38. The Arbitral Tribunal as well as the Court of the learned
District Judge, Chirang interpreted the Clause 6.6.1.0 and
Clause 9.1.0.0 of the GCC in a manner, which does not require
the dispute regarding deduction of liquidated damages from
the final bill to be notified under Clause 6.6.1.0 of the GCC.
Though, this court is of the view that a different interpretation
of the said clauses may also be made, however, the
jurisdiction of this Court under Section 37 of the Arbitration
and Conciliation Act, 1996 is extremely circumscribed to justify
making of any such attempt.
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39. The Apex Court in the case of “UHL Power Company
Limited Versus the State of Himachal Pradesh” (Supra) has
observed as follows:
“20. In Dyna Technologies [Dyna Technologies (P)
Ltd. v. Crompton Greaves Ltd., (2019) 20 SCC 1],
the view taken above has been reiterated in the
following words : (SCC p. 12, para 25)
“25. Moreover, umpteen number of judgments of
this Court have categorically held that the courts
should not interfere with an award merely because
an alternative view on facts and interpretation of
contract exists. The courts need to be cautious and
should defer to the view taken by the Arbitral
Tribunal even if the reasoning provided in the
award is implied unless such award portrays
perversity unpardonable under Section 34 of the
Arbitration Act.”
21. An identical line of reasoning has been adopted
in South East Asia Marine Engg. & Constructions Ltd.
(SEAMEC Ltd.) v. Oil India Ltd. [South East Asia
Marine Engg. & Constructions Ltd.
(SEAMEC Ltd.) v. Oil India Ltd., (2020) 5 SCC 164 :
(2020) 3 SCC (Civ) 1] and it has been held as
follows : (SCC p. 172, paras 12-13)
“12. It is a settled position that a court can set
aside the award only on the grounds as provided
in the Arbitration Act as interpreted by the courts.
Recently, this Court in Dyna Technologies (P)
Ltd. v. Crompton Greaves Ltd. [Dyna Technologies
(P) Ltd. v. Crompton Greaves Ltd., (2019) 20 SCC
1] laid down the scope of such interference. This
Court observed as follows : (SCC p. 12, para 24)
„24. There is no dispute that Section 34 of the
Arbitration Act limits a challenge to an award only
on the grounds provided therein or as interpreted
by various Courts. We need to be cognizant of the
Arb.A./18/2019 Page 20
21
fact that arbitral awards should not be interfered
with in a casual and cavalier manner, unless the
Court comes to a conclusion that the perversity of
the award goes to the root of the matter without
there being a possibility of alternative
interpretation which may sustain the arbitral
award. Section 34 is different in its approach and
cannot be equated with a normal appellate
jurisdiction. The mandate under Section 34 is to
respect the finality of the arbitral award and the
party autonomy to get their dispute adjudicated by
an alternative forum as provided under the law. If
the Courts were to interfere with the arbitral award
in the usual course on factual aspects, then the
commercial wisdom behind opting for alternate
dispute resolution would stand frustrated.‟
13. It is also settled law that where two views are
possible, the Court cannot interfere in the plausible
view taken by the arbitrator supported by
reasoning. This Court in Dyna Technologies [Dyna
Technologies (P) Ltd. v. Crompton Greaves Ltd.,
(2019) 20 SCC 1] observed as under : (SCC p. 12,
para 25)
„25. Moreover, umpteen number of judgments of
this Court have categorically held that the Court
should not interfere with an award merely because
an alternative view on facts and interpretation of
contract exists. The Courts need to be cautious
and should defer to the view taken by the Arbitral
Tribunal even if the reasoning provided in the
award is implied unless such award portrays
perversity unpardonable under Section 34 of the
Arbitration Act.‟ “
40. If we go through the Clause 9.1.0.0 of the GCC as quoted
herein above, it appears that under the facts and
circumstances of this case where the liquidated damages wereArb.A./18/2019 Page 21
22imposed after two and a half years of submitting final RA bill,
the interpretation of the aforesaid Clause (Clause 9.1.0.0)
given by the Arbitral Tribunal as well as by the Court of the
learned District Judge, Chirang, while dealing with the
application under Section 34 of the Arbitration and
Conciliation Act, 1996, cannot be regarded as irrational
interpretation. Though, an alternative interpretation is also
possible, however, merely because an alternative view on
facts and interpretation of contract exists, this Court in
exercise of its powers under Section 37 of the Arbitration and
Conciliation Act, 1996 would not interfere in the arbitral award
as well as in the judgment of the Court of the learned District
Judge, Chirang rendered under Section 34 of the Arbitration
and Conciliation Act, 1996, wherein it has declined to set
aside the arbitral award.
41. This Court is of the considered opinion that in the facts and
circumstances, which are peculiar to this case, the
interpretation of the relevant clauses of the GCC as given by
the learned Arbitral Tribunal as well as by the Court of the
learned District Judge, Chirang under Section 34 of the
Arbitration and Conciliation Act, 1996 are both possible and
plausible. As such, any interference with the impugned
judgment of the Court of the learned District Judge, Chirang,
whereby it refused to set aside the arbitral award, is not
warranted.
42. In view of the discussions made in the foregoing paragraphs
as well as the reasons stated therein, this Court is ofArb.A./18/2019 Page 22
23considered opinion that the present appeal lacks merit and
any interference with the finding of the Court of the learned
District Judge, Chirang in the impugned judgment as well as
any interference in the arbitral award passed by the learned
Arbitral Tribunal is not warranted under the facts and
circumstances of the case.
43. Accordingly, this appeal is hereby dismissed.
44. The stay on the execution of the impugned judgment and
order of the learned District Judge, Chirang granted by this
court on 08/11/2019 in IA(C)3412/2019 shall stands vacated.
The respondent shall be entitled to the pendente lite interest
on the awarded amount in terms of the arbitral award.
JUDGE
Comparing Assistant
Digitally signed
Munm by Munmun
Boruah
un Date:
2026.04.20
Boruah 16:10:04
+05'30'
Arb.A./18/2019 Page 23
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