NATIONAL HIGHWAYS AUTHORIITY OF INDIA Vs. JSC CENTRODORSTROY

JUDGEMENT

(1.) IN the captioned petitions, the issues involved are common. The first issue relates to compensation for additional cost on account of increase in the rate of service tax on insurance premium under the insurance policy taken qua the project in issue. The second issue also involves compensation towards additional cost incurred on account of increase in the rate of service tax, though qua bank guarantee charges. The arbitral tribunal in both cases has ruled in favour of the respondent based on its construction of clause 70.8 of the General Conditions of the Contract (GCC). The relevant extract of clause 70.8 reads as follows:

(2.) A bare reading of the said clause would show that it entitles the aggrieved party to an increase or reduction in the costs which rises on account of the changes to the National or State Statute, Ordinance, Decree etc.

(3.) LEARNED counsel for the petitioner, however, says that clause 70.8 of the GCC would only take care of increase in those costs which have a constructional input element.