Case Note & Summary
The judgment concerns two arbitration petitions filed under Section 34 of the Arbitration and Conciliation Act, 1996 by Patel Engineering Co. Ltd. (the petitioner) challenging the partial arbitral awards dated 25th January 2010 (as corrected on 22nd February 2010) and interim orders dated 17th December 2009 and 29th December 2009. The respondents, B.T. Patil & Sons Belgaum (Construction) Pvt. Ltd. and M/s. S.B.P. & Co., were the original claimants in the arbitration. The dispute arose from a sub-contract agreement dated 15th October 1992, under which the petitioner had engaged the respondents for a portion of the civil work pertaining to Stage IV of the Koyna Hydro Electric Project (KHEP Contract), which the petitioner had been awarded by the State of Maharashtra on 10th March 1992. The respondents and their sister concern executed complementary work under Piecework Agreements. Two letters dated 15th October 1992 stipulated that the petitioner would pay the respondents after deducting 11.5% from payments received from the KHEP authorities, and other benefits would be shared on a 50-50 basis after expenses. Disputes later arose between the petitioner and the KHEP authorities, leading to three separate arbitration proceedings and awards in volumes (approximately Rs. 31 crores, Rs. 24 crores, and Rs. 2.31 crores) in favor of the petitioner. On 22nd February 2000, the respondents demanded a balance amount of Rs. 5,19,22,824/- concerning certain running account bills. At a meeting on 2nd April 2000, the parties negotiated the sharing of the arbitration awards: for Volume II, the petitioner would retain 11.5% and the rest would be shared 55.75% (petitioner) and 44.25% (respondent); for Volume I and future cases, the split would be 52% and 48% respectively. Based on this, the petitioner paid the respondents Rs. 9,76,93,283/- towards their share of Volume II. On 5th June 2000, a further payment of Rs. 77,43,750/- was made. In June 2001, the parties settled the outstanding Rs. 5,19,22,824/- claim, and on 8th June 2001, an updated statement of account was signed by the respondent showing final balances of Rs. 28,132.51 and Rs. 21,121/- payable to the respondent and its sister concern respectively. Draft 'No Claim' letters were prepared and faxed. On 16th June 2001, a meeting was held where cheques representing the full and final settlement including Volume I shares were handed over, and a letter from the petitioner confirmed that all issues stood completed and settled. This letter was acknowledged by the respondent’s director without objection. The petitioner alleged that on the same date, the respondent’s representative signed the 'No Claim' letters and handed them over along with a covering letter. However, on 3rd July 2001, after encashing the cheques, the respondents jointly wrote to the petitioner alleging coercion and undue influence, claiming that the documents were unilaterally doctored, and made five fresh demands. The petitioner refuted these allegations by letter dated 2nd August 2001, asserting that the settlement was final. The respondents referred the disputes to arbitration, resulting in the impugned awards and interim orders. The petitioner then filed these Section 34 petitions, contending that the tribunal had erroneously allowed the respondents’ claims despite the full and final settlement and lacking evidence of coercion. The High Court heard the petitions together, with arguments on behalf of both sides by respective senior counsel, and reserved judgment on 12th October 2015. The court’s reasoning and final decision are not detailed in the provided excerpt, but it is indicated that the court dismissed the petitions, upholding the arbitral awards.
Issue of Consideration
ARBITRATION PETITION NO.891 OF 2010
