MODI TELECOMUNICATION LTD. Vs. UOI

JUDGEMENT

(1.) The appellant is aggrieved by the judgment and order of the learned Single Judge dismissing its objections under Sec. 34 of the Arbitration and Conciliation Act, 1996 ("The Act"). It contends that the learned Single Judge overlooked the patent errors and illegalities committed by the Arbitral Tribunal in the Award dated 20.05.2005.

(2.) Briefly, the facts are that the appellant was awarded with the letter of intent on 27.10.1995 for providing radio paging services in the State of Rajasthan. The date of the common license agreement executed by the public agency, i.e., the Ministry of Communication was 27.02.1996; however, the effective date of the contract was 25.11.1995. The appellant was granted 12 months' time to start the radio paging services - in the present case the services were to begin on or before 26.11.1996. As a prelude to commencement of these services, the appellant had to apply and obtain various approvals. These included siting approvals, WPC approvals and certain other technical clearances. As a matter of fact, the radio paging services agreed to by the parties did not commence. The appellant alleged that siting approvals by SACFA (The Standing Advisory Committee on Frequency Allocation) was forthcoming much later - on 18.05.1998 in respect of 23 sites. It, therefore, invoked dispute resolution and demanded the payment. In the meanwhile, the respondent/Union of India invoked the bank guarantee furnished by the appellant under Clause 18 of the license agreement. The parties referred their disputes for adjudication by a sole arbitrator.

(3.) The Arbitral Tribunal by the Award impugned before the Single Judge was of the opinion that the delay alleged and attributed to the respondent/UOI by the appellant had not been established. In other words, the Arbitral Tribunal concluded that the appellant was responsible for the delay. The Tribunal upheld the termination and also the invocation of the bank guarantee. The Arbitral Tribunal also upheld the invocation of the bank guarantee premising the findings on clause 18.6 of the conditions in part 2 of the license agreement entered into by the parties.