Case Note & Summary
The dispute arose from a consultancy agreement between the State of Jharkhand and a consortium for the construction of a six-lane divided carriageway of Ranchi Ring Road. The agreement was signed on 28.08.2007, with a work period from 01.10.2007 to 30.09.2010. Disputes emerged regarding non-performance and unsatisfactory work, leading to contract extensions and a suspension of payments. The State issued a termination notice on 09.02.2012, which the respondents contested, invoking arbitration. The Arbitral Tribunal ruled the termination illegal and awarded the respondents Rs.2,10,87,304/ for various claims, dismissing the State's counterclaims. The High Court upheld the Tribunal's award under Section 37 of the Arbitration Act, prompting the State to file a special leave petition. The petitioners argued that the High Court erred in its findings, while the respondents maintained that the Tribunal's findings were based on evidence and should not be disturbed. The Supreme Court found that the Tribunal's findings were concurrent and based on proper evidence, thus dismissing the special leave petition without costs.
Headnote
A) Arbitration Law - Termination of Contract - Illegal Termination - Arbitration and Conciliation Act, 1996, Sections 34, 37 - The Arbitral Tribunal found the termination of the contract illegal for not following due procedure as required under the contract. The High Court confirmed this finding, leading to the dismissal of the special leave petition. Held that the findings were based on appreciation of evidence and should not be interfered with (Paras 6-8).
Issue of Consideration
Whether the termination of the contract was illegal and whether the findings of the Arbitral Tribunal should be interfered with.
Final Decision
The Supreme Court dismissed the special leave petition, upholding the findings of the Arbitral Tribunal regarding the illegal termination of the contract and the award granted to the respondents.
Law Points
- Arbitration Act
- 1996
- Section 34
- Section 37
- illegal termination
- contractual obligations
- concurrent findings of fact
