NATIONAL HIGHWAYS AUTHORITY OF INDIA Vs. PCL

JUDGEMENT

(1.) This petition under Sec. 34 of the Arbitration & Conciliation Act, 1996 (Act) by the National Highways Authority of India ("NHAI") challenges an Award dated 9th May, 2009 passed by the Arbitral Tribunal "AT") in the disputes between the NHAI and the Respondent PCL-SUNCON JV arising out of a Contract Agreement (CA) dated 28th March 2002 for the work of four-laning and strengthening of the existing two lanes between km 317 and km 65 on NH-2 in the States of Uttar Pradesh and Bihar, which was awarded by NHAI to the Respondent.

(2.) The contract was an item rate contract. The Respondent had quoted its rates for various items as per the details given in the Technical Specifications ("TS") and Bill of Quantities ("BOQ"), which formed the part of the Contract Agreement ("CA") between the parties. The dispute pertained to the rate payable for a non-BOQ item i.e., Granular Sub-Base ("GSB") for emergency repairs and maintenance of shoulders and main carriageway. It is not in dispute that the work of the GSB was a non-BOQ item for which rates were not specified elsewhere in the CA.

(3.) The genesis of the claim of the Respondent was a letter dated 11th Sept. 2002 by which the Team Leader i.e. the Engineer ordered emergency repairs and maintenance of shoulders and carriageway with GSB from the existing stockpiles of Chunar from the Ram Nagar Camp situated at a distance of 40 km from the Chunar quarry. By a letter dated 29th Oct. 2002, the Team Leader decided that the applicable rate for doing the non-BOQ work of GSB would be as per the BOQ Item 02 i.e., at Rs. 720 per cum. Subsequently a new rate of Rs. 665 per cum was finalised by the Team Leader after discussions with the Respondent. This according to the Respondent was a rate derived from the rate for BOQ Item 02. This was also consistent with the procedure envisaged under Clause 52.1 of the General Conditions of Contract (GCC). It is sought to be explained by the Respondent that the reduction of Rs. 55 per cum from the quoted rate of Rs. 7620 per cum for BOQ Item No. 02 was by way of adjustment for not so proper compaction, grading of surface and less quality control. By letter dated 1st July 2003 the Team Leader stated that deductions would be carried out in the invoice for the month of June 200