IRCON INTERNATIONAL LIMITED Vs. ARVIND CONSTRUCTION COMPANY LIMITED

JUDGEMENT

(1.) This order will dispose of the application of the petitioner under Section 34 of the Arbitration and Conciliation Act, 1996 whereby the petitioner has challenged the award made and published by the arbitrator, namely, respondent No. 2 in the matter of disputes between the parties relating to the project nomenclatured as Al-Muthana (CFBL project) in Iraq. The facts in short are:-

(2.) In or about 1982-83, the New Railway Implementation Authority of the Republic of Iraq awarded certain contracts relating to a railway project in Iraq to the petitioner. One of the project was the cement factory in Al-Muthana (in short referred to as the CFBL project). The value of this project was about Iraqi Dinars 34.473 millions and the work of construction of certain buildings and temporary diversions in this project was awarded to the respondent by the petitioner. The work so awarded to the respondent was of the value of about Iraqi Dinar 0.43 millions.

(3.) For execution of work, the respondent availed certain loans from the petitioner in foreign currency and Indian rupees and the work was completed in the year 1984-85. The projects at Iraq were executed by the petitioner on Deferred Payment Arrangement (in short referred to as the "DPA") signed between the Government of Iraq and the Government of India. For executing the projects, the petitioner had also availed loans from certain banks including the State Bank of India, Behrain (foreign currency loan) and from the State Bank of India, New Delhi/EXIM Bank of India (rupee currency loan). The foreign currency loan was availed by the petitioner against a counter guarantee given by the Ministry of Railways, Government of India to the Bank and the rupee currency funding was availed by the petitioner against security of receivables for the work done at Iraq under the DPA.