LLOYD INSULATIONS (INDIA) LTD. Vs. NBCC LIMITED

JUDGEMENT

(1.) (Oral)- The petitioner has filed the present objections under Sec. 34 of the Arbitration and Conciliation Act, 1996 in respect of the award dated 9.1.2001. The learned Arbitrator had found that the petitioner/claimant was entitled to the following amount:

(2.) The National Building Construction Corporation Limited (NBCC) was required to construct a 200 bed hospital at Maldives by the Government of India. In 1986 a tender was floated for the same. The petitioner responded to the same and its offer was accepted by the NBCC (respondent herein) on 26.9.1989. The acceptance of the petitioner's offer was conveyed on 26.9.1989 in respect of the work of false ceiling, venetian blinds and insulation and water proofing on the roof of the Indira Gandhi Memorial Hospital at Male, Republic of Maldives. The condition of the contract was that at the time of placing of the detailed order, the petitioner would have to furnish a performance bank guarantee at the rate of 10% of the contract value till the end of the maintenance period.

(3.) Under this parent contract two work orders were issued to the petitioner by the respondent. The first work order was issued on 16.3.1992 for fixing of false ceiling, venetian blinds and insulation materials at the said hospital project. This work order in itself comprises of two parts, one pertaining to supply and the other pertaining to erection. The total value of the first work order was Rs. 1,17,61,822 (after rebate). The second work order was placed by the petitioner under, the same parent contract, on 29.8.1992 for the work of water proofing on the roof of the hospital with kini foam. The value of this contract was Rs. 7,95,387 (after rebate). Disputes had arisen between the parties as a result of which the bank guarantee, which had been extended by the petitioner in favour of the respondent, came to be invoked by the respondent by a letter dated 27.1.1995. The invocation of the bank guarantee was challenged before the Delhi High Court and ultimately before the Supreme Court. The Supreme Court permitted the encashment of the bank guarantee and directed that the amount of the bank guarantee be paid by the petitioner to the respondent. However, the Supreme Court further directed the disputes of the parties to be referred to arbitration in the following terms: