EMPLOYEES STATE INSURANCE CO. LTD Vs. RAVI ASSOCIATES

JUDGEMENT

(1.) This appeal under Section 37 of the Arbitration and Conciliation Act 1996, read with Section 13 of the Commercial Courts Act 2015, impugns judgment/order dated 12.04.2019 rendered by the learned Single Judge of this court in O.M.P. No. 59/2016 titled Employees' State Insurance Corporation vs. M/s Ravi Associates whereby the Single Judge has dismissed the challenge under Section 34 of the Arbitration Act to Arbitral Award dated 16.12.2015. For completeness, it may be stated that a cross-petition, being OMP (COMM) No. 79/2016 had also been preferred before the Single Judge by M/s Ravi Associates, impugning certain aspects of the Arbitral Award, which was also dismissed by the Single Judge.

(2.) The genesis of the disputes between the parties is a contract agreement dated 11.11.2008 that was executed between the appellant/Employees' State Insurance Corporation ('ESIC', for short) and the respondent M/s Ravi Associates ('RA', for short) under which ESIC engaged the services of RA for rendering Architectural and Engineering Consultancy Services for the construction of a Medical College and Hospital at Paripally Kollam, in the State of Kerala ('Project', for short). The contract for executing the civil works on the Project had been awarded by ESIC to an entity called M/s Hindustan Lifecare Limited ('HLL', for short) ; and as per the record, ESIC allocated construction work to HLL only on 29.10.2009. The estimated cost of the Project was Rs.4,80,79,74,137/-. The time frame provided for completion of the Project was stipulated as three years ; and considering that the date of contract agreement was 11.11.2008, it could be inferred that the Project was required to be completed by 10.11.2011. RA was required to be remunerated at 3% of the final value of work executed.

(3.) As per the record however, before the term of the contract agreement could come to an end, on 01.02.2010 ESIC terminated the contract with RA. At this time, ESIC also encashed the bank guarantee in the sum of Rs. 65,00,000/- furnished by RA.