IRCON INTERNATIONAL LIMITED Vs. C.R. SONS BUILDERS

JUDGEMENT

(1.) By way of this petition, under Section 34 of the Arbitration and Conciliation Act , 1996 [hereinafter referred to as "the Act"], the petitioner [hereinafter referred to as "IRCON"] seeks setting aside of an arbitral award dated 10.02.2009. By the impugned award, a sole arbitrator adjudicated various claims and counter-claims raised by the parties under a construction contract dated 17.08.2004. After adjusting the amount awarded on the counter-claims raised by IRCON, the arbitrator awarded a net sum of Rs. 17,74,332/- in favour of the respondent No.1 herein [hereinafter referred to as "CRS"]. Background

(2.) By way of the contract dated 17.08.2004, CRS was to construct an office building for IRCON. An arbitration clause was included in a supplementary agreement dated 02.06.2006. CRS invoked arbitration and raised twelve claims before the arbitrator. Mr. S.P. Mehta, former General Manager of Northern Railways, was appointed as the sole arbitrator, impleaded as respondent No.2 herein. During the course of proceedings, IRCON also filed a counter-claim enumerating nine claims.

(3.) In the present petition, Mr. Chandan Kumar, learned counsel for IRCON, has confined his arguments to challenging claim nos. 1 and 3, awarded in favour of CRS. By way of claim no.1, CRS made a claim of Rs. 22,41,192/- [plus interest] on account of "unjustified recovery of excavated earth". The arbitrator has awarded a sum of Rs. 2,24,119/- and interest of Rs. 67,235/- on this account. In claim no.3, on account of escalation, CRS claimed Rs. 29,22,685.89/- [plus interest at the rate of 18% per annum], of which the arbitrator has awarded a sum of Rs. 13,00,000/- and interest in the sum of Rs. 2,60,000/-. Each of these claims, and the validity of the challenge thereto, are discussed in turn hereinbelow. Claim No.1 Facts: