TARAPORE AND COMPANY MADRAS Vs. UNION OF INDIA

JUDGEMENT

(1.) The Union of India through ]Ministry of Exteral Affairs invited tenders for the construction of chancery and residential building for the Indian High Commission at Colombo, Sri Lanka. The petitioner, M/s. Tarapore & Co's tender was ultimately accepted and work was awarded to the petitioner. The petitioner hereinafter called as the Claimant and the respondent Union of India as Objector. Subsequently, a dispute arose between the parties which according to the terms of the contract were referred to the arbitration of a retired Chief justice of the High Court and to two retired Chief Engineers of the CPWD under the Arbitration Act of 1940. The award was published on 4.6.1997. The objection to the award have been filed by the Union of India.

(2.) In the award the reasons for delay in completion of the project have been discussed at length and out of the total delay of 25 months, delay of 16 months has been attributed to the Union of India. The remaining delay has not been specifically attributed to the Claimant but in the award it is mentioned that ethnic violance was prevalent during that period in Sri Lanka. The relevant passage of the award reads as under: Four our purpose it would be suffice to mention that the ethnic violence during the relevant period in Colombo was not to the extent as to seriously hinder the project or delay its execution for long period. In this regard it may be noticed that the claimant had been earlier constructing another large project connected with Taj Samundra Hotel which was coming up in Colombo and for that purpose their staff including technical staff had been posted in Ceylon for considerable period shortly before the present project was taken up. It would, therefore, be safe to conclude that the claimants were fully aware of the conditions in Sri Lanka and were confident of their ability to undertake the project successfully inspite of the un-settled condition prevaliling in Ceylon (Sri Lanka) at the relevant time. While submitting their tender, they must have taken the situation in Sri Lanka into account and would have also covered for this situation while quoting their tender bid.

(3.) The learned Counsel for the Union of India submitted that this delay of 9 months must be attributed to the Claimant whereas the learned Counsel for the Claimant submitted that this delay has occurred because of ethnic violence prevalent in Colombo and this delay has not been attributed to the Claimant in the award.