JAIPRAKASH ASSOCIATES LTD. Vs. NHPC LTD. AND ORS.

JUDGEMENT

(1.) The appellants are aggrieved of the order dated 26.03.2014, whereby objections filed by the respondents against the arbitration award dated 22.08.2010 has been accepted and the award passed in their favour has been set aside.

(2.) It would be apt to give brief preface of the controversy leading to the lis/dispute to the Arbitrator. As per the agreement dated 21.03.2001, a contract for construction of underground power house, surge shaft, Pressure shaft, Part Head Race Tunnel including Adit -V, Switchyard and TRT (3 Nos. ) for Teesta Hydroelectric Project Stage -V in with NHPC was awarded to the appellant. The stipulated date of completion of work as per the contract was 21.09.2005 whereas, work had been completed on 21.01.2008. Since dispute arose between the parties during the execution of various components of agreed work and the contract envisage resolution of dispute through arbitration and the matter was referred to the Arbitrator. The basic claim before the Arbitrator was that additional cost, occasioned to the claimant in implementing the work was increase in the minimum wages due to the notifications promulgated by Government of Sikkim, has not been taken into account while tendering and the same has also not been compensated taking into consideration the price adjustment formulae contained as per Sub Clause (i) (ii) (iii) of Clause 70 of the Contract of Conditions of Particular Application (hereinafter to be called as "Contract of COPA") thus the claim of additional expenditure is liable to be paid as per sub -clause 70.8 of COPA. Various letters in this regard were sent for such additional cost but the request was rejected firstly on 16.02.2006 and finally on 12.01.2007. The aforementioned claim was contested by the respondent as noticed from the contents of the award. During the course of arbitration deliberations, number of other documents, statements Annexures and various judgments of High Court and Supreme Court were submitted by both the parties. The parties did not object to the procedure adopted by the Arbitrator Tribunal and were given ample opportunities. It would be apt to reproduce the Clause 70 dealing with the changes in cost and legislation of COPA: - -

(3.) Mr. Lovekesh Sahni, and Mr. Pankaj Gupta, learned counsel appearing on behalf of appellant -claimants submits that Clause 70.8 of COPA is not restrictive in nature rather is of wide amplitude, as it envisages the reimbursement to the Contract in respect of expenditure incurred beyond what is covered by Clause 70.3, in essence, it does not debar the charging of the cost incurred because of statutory hike in the minimum wages under the Minimum Wages Act, 1948 and in this regard, language of Sub -Clause 70.8 is clear and unambiguous on account of the fact that same has not been incorporated in the Indexing of any inputs. The claimants sought reimbursement of such rise in minimum wages over and above the percentage rise in CPI (Cost Price Index) Numbers. Both the parties submitted their respective submissions vis   -vis the claim and non -entitling of the claim. The Arbitrator Tribunal after considering the aforementioned fact, framed five following issues: - -