Case Note & Summary
The petition was filed under Section 34 of the Arbitration and Conciliation Act, 1996 by the Board of Trustees of Jawaharlal Nehru Port Trust challenging an arbitral award dated 25 April 2009. The dispute originated from a contract awarded to Three Circles Contractors on 27 May 1996 for reclamation work behind service berth at the Nhava Sheva port. The contract commenced on 1 June 1996 with a completion deadline of 28 February 1997. A work completion certificate with a snag list was issued on 27 February 1997. Disputes arose regarding payments and additional claims, leading the contractor to invoke clause 65 of the contract and appoint an arbitrator. The arbitration proceedings witnessed multiple procedural events: an initial sole arbitrator resigned in April 2002, and a retired High Court judge was subsequently appointed. The claimant submitted an additional statement of claim in June 2003 without a formal amendment application, which was later rejected by the arbitrator in December 2003. However, the arbitrator later reviewed this order sua sponte in April 2008 citing a clerical error. Various applications for amendment of claims were filed, with one allowed in September 2008, allegedly after the conclusion of arguments, and the claimant was permitted to amend the claim amounts substantially. The petitioner argued that no hearing was granted on the inflated claims. Oral evidence of expert witnesses was taken, including Mr. Prakash Falari and Mr. V.T. Ganpule. The arbitrator ultimately rendered an award on 25 April 2009, directing the petitioner to pay Rs.8,00,06,872.26 against claim nos. 1, 2, and 3, along with 14% interest per annum from 28 February 1997 until realisation, and costs of Rs.14,00,000, while rejecting the counterclaims. The petitioner sought to set aside the award on grounds of procedural irregularities and violation of natural justice. The provided judgment excerpt does not include the Court's analysis or final decision on the petition.
Issue of Consideration
ARBITRATION PETITION NO. 648 OF 2009
Case Details
2015 LawText (BOM) (04) 48
Arbitration Petition No. 648 of 2009
Mr. Milan Bhise, Mr. Amit Bhave, Mr. Vinod Sakpal, Mr. E.P. Bharucha, Mr. Atul Damle, Mr. A.R. Balsara, Mr. Rupesh Lanjekar
Board of Trustees of Jawaharlal Nehru Port Trust
Three Circles Contractors
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Nature of Litigation
Petition under section 34 of the Arbitration and Conciliation Act, 1996 challenging an arbitral award.
Remedy Sought
Petitioner sought to set aside the arbitral award dated 25 April 2009.
Filing Reason
Alleged procedural irregularities, denial of natural justice, and improper allowance of amendments and claims by the arbitrator.
Previous Decisions
Arbitral award dated 25 April 2009 allowing some claims and rejecting counter claims.
Procedural History
The petitioner invited tenders on 21 March 1996 for reclamation work. The respondent submitted a bid on 11 April 1996 and was awarded the contract on 27 May 1996, with work to commence on 1 June 1996 and be completed by 28 February 1997. A work completion certificate with a snag list was issued on 27 February 1997. Disputes arose regarding payments, and the respondent invoked arbitration clause 65. Mr. R.K. Bhansali was appointed sole arbitrator on 20 April 2000. The respondent filed a statement of claim, and the petitioner filed a written statement and counter claim. The parties agreed not to lead oral evidence. The arbitrator resigned on 19 April 2002. A retired High Court judge was then appointed. The respondent submitted an additional statement of claim on 14 June 2003 without an amendment application; the arbitrator rejected the amendment application on 18 December 2003. On 24 January 2004, the arbitrator permitted oral evidence of Dr. R.K. Katti, but the respondent later decided not to examine him. Instead, the respondent filed an affidavit of Mr. Prakash Falari, who became unavailable, and later Mr. V.T. Ganpule was examined and cross-examined. On 11 April 2008, the arbitrator suo moto reviewed the 18 December 2003 order, citing a clerical mistake. On 12 September 2008, the arbitrator allowed a further amendment application filed on 1 September 2008, enabling significant inflation of claim amounts, after arguments had commenced. The petitioner objected. The arbitrator later rejected an application to examine the respondent's proprietor. The proceedings were closed on 27 November 2008, but the award was not pronounced until 25 April 2009. The award directed payment of Rs.8,00,06,872.26 with interest and costs, and dismissed the counterclaims. The petitioner filed the present petition under section 34 of the Arbitration and Conciliation Act, 1996, challenging the award.
Acts & Sections
- Arbitration and Conciliation Act, 1996: 34
