Case Note & Summary
By this Commercial Arbitration Petition, the petitioner sought quashing and setting aside of the Award dated 1 February 2020 passed by the Majority Arbitral Tribunal, with a dissenting opinion by Mr. R.G. Kulkarni, Secretary, Irrigation (Retired) to Government of Maharashtra. The dispute arose out of a construction contract for civil RCC/architectural finishing work for seven towers in a residential project at Patel Neo Patel Town, Bengaluru. The petitioner, Patel Engineering Ltd., had engaged an agency called VCon between January to April 2010 before inviting tenders on 3 June 2010. The respondent, Acron Developers Pvt. Ltd., submitted its final offer on 14 and 15 June 2010, and a Letter of Intent dated 23 June 2010 was issued for six towers at rates of Rs.860.40 per sq.ft for five towers and Rs.823.50 per sq.ft for Tower S10. The contract sum was Rs.34,15,62,096 with a duration of 16 months. A second Letter of Intent dated 26 July 2010 added the seventh tower S11 with a contract sum of Rs.3,59,97,528 and duration of 15 months. The Letters of Intent stated that the contract was based on measurable built-up area and payments would be made on joint measurement after completion of total work. The contract executed on 11 November 2010 recorded that it was not an item-rate contract but a lump sum contract calculated on rate per total built up area as quoted, with total area of 4,45,443.7 sq.ft and total contract sum of Rs.37,75,59,624. Disputes arose regarding delayed GFC drawings, work stoppages due to third-party contractors, rejection of RA bills, measurement and payment issues, and increase in built-up area. The original completion timelines of 22 and 25 October 2011 were not met; the petitioner terminated the contract on 22 October 2011 on grounds of failure to achieve milestones. The respondent denied allegations and sought amicable settlement. A Deed of Settlement was executed on 31 October 2011, reviving the contract with modifications: the respondent undertook to complete the project by 31 January 2012 as per milestones in Annexure 3; time was of the essence; respondent could raise bills every 15 days and petitioner to pay within 15 days; all other contract clauses including arbitration agreement remained in force. Further delays occurred, with emails from January to February 2012 regarding third-party delays and non-availability of kitchen granite slabs to be supplied by Patel Realty (India) Ltd. A show cause notice was issued by the Development Manager regarding non-completion and liquidated damages; respondent requested extension till 31 May 2012. Meetings and emails set revised handover dates: initially 30 June 2012, then 30 July 2012, then 3 November 2012. The Development Manager ceased involvement from 30 November 2012; respondent claimed project completion on 31 December 2012. The respondent handed over flats to Arsen Infra Pvt. Ltd., petitioner's representative, after rectification of snags between February and March 2013. The respondent submitted final bill on 24 August 2013. The available excerpt of the judgment ends at an email dated 25 September 2013 from the petitioner requesting the respondent to send certain documents, and does not include the parties' submissions, court's analysis, or final decision. Consequently, the legal issues, arguments, and ratio decidendi beyond the challenge to the award are not available in the provided portion.
Issue of Consideration
Whether the Award dated 1 February 2020 of the Majority Arbitral Tribunal should be quashed and set aside.
