APCO INFRATECH LTD. Vs. MECON LTD.

JUDGEMENT

(1.) M/s APCO INFRATECH Ltd.,(in short, APCO)has filed this Commercial Appeal under Sec. 13(1-A) of the Commercial Courts Act, 2015 against the judgment dtd. 30/5/2019 passed by the Presiding Officer of the Commercial Court at Ranchi in Commercial (REVOC) Case No. 117 of 2015. The Commercial Court has set aside the arbitral Award dtd. 15/5/2015 on the ground that the composition of the arbitral Tribunal was not as per the agreement of the parties and, therefore, the arbitral Award was liable to be set aside under Sec. 34 (2) (a) (v) of the Arbitration and Conciliation Act, 1996,(in short, AC Act).

(2.) Briefly stated, the Indian Oil Corporation Limited.,(in short, IOCL) awarded the work for "Civil Works for Pipeline Tank Terminal at Amousi near Lucknow",(in short, the Project)in the State of Uttar Pradesh to M/s MECON Limited.,(in short, MECON) and, in turn, the MECON invited bids in two parts for executing the Project captioned as Civil Works (Package-I) and Civil Works (Package-II) and both works were awarded to the APCO vide LOIs dtd. 15/3/2001 and 11/6/2001. The total value of the subject works was Rs.3,55,87,269.00 for Package-I and Rs.4,55,37,886.00 for Package-II and the Project was to be completed within 8 months. The Work Order dtd. 15/3/2001 enclosed the schedule of rates and various other taxes described in Attachment-2 wherein it was provided that (i) the schedule of rates and the total contract price shall remain firm throughout the contract period, (ii) no variation in the schedule of rates on any account is permissible, and (iii) the unit rates are inclusive of Income Tax, Sales Tax, Octroi duty, if applicable, and all applicable taxes, duties and levies. The schedule of rates provided that the contract price shall include and cover the cost of materials, labor, tools and tackles, construction equipment, templates, scaffoldings, transportation, power and water, and shall also include the cost of insurance covering 3rdparty liability, loss of human life and risk of damages on other material/equipment. The agreed terms of payment were provided in Attachment-3 which contained a condition that "the payment shall be released only on receipt of the corresponding payment from IOCL" which is the Principal employer for the Project.

(3.) The Work Order dtd. 15/3/2001 which contained the aforesaid conditions for payment under clause 4.0 is extracted below: