THE PROJECT DIRECTOR, TAMIL NADU ROAD SECTOR PROJECT, HIGHWAYS DEPARTMENT, ADYAR, CHENNAI Vs. M/S. RNS INFRASTRUCTURE LTD.

JUDGEMENT

(1.) This petition has been filed under Sec. 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act), for setting aside the arbitration award dated 30.4.2012 passed by the Panel of Arbitrators namely respondents 2 to 4 herein.

(2.) The facts, which are necessary for testing the validity of the award, could be briefly stated as follows : The respondent is a joint venture consisting of two companies namely M/s. RNS Infrastructure and Gayathri Projects Limited. The respondent was awarded the contract for up gradation of 117 Km road from Ramanathapuram to Tuticorin. Originally, the project length was 117.90 KM and the revised length was 114.695 Km. The contract value, which was originally fixed, was Rs.119,26,00,842.00. Subsequently, since there was major change in the scope of work namely the work of up gradation got converted into one of reconstruction, the petitioner, who awarded the contract, revised the value of the contract to Rs.155,93,66,638.00. According to the petitioner, the overall increase in the quantum of work was about 31%.

(3.) In terms of the initially conceived project namely a project for up gradation, an agreement dated 30.11.2005 was entered into, which was pursuant to a letter of acceptance dated 14.10.2005. The start date, as originally envisaged, was 16.12.2005 with a time for completion as 36 months to end with 15.12.2008 whereas the project was completed only on 30.12.2009. It is important to note that the nature of work was in terms of the concept of Bill of Quantities (hereinafter called the BOQ) and in terms of the contract, the quantities given in the BOQ are estimated provisionally and are given to provide a common basis for bidding. The basis of payment will be the actual quantities of work ordered and carried out as measured by the Contractor, verified by the Engineer and valued at the rates and prices, bid in the priced BOQ where applicable and otherwise at such rates as the Engineer may fix within the terms of the contract.