,,
Vibhu Bakhru, J",,
1. Shyama Power India Ltd. (hereinafter ‘SPIL’) has filed the present petition under Section 34 of the Arbitration and Conciliation Act, 1996",,
(hereinafter ‘the A&C Act’) impugning an arbitral award dated 14.12.2020 (hereinafter ‘the impugned award’) delivered by the Arbitral,,
Tribunal comprising of a Sole Arbitrator (hereinafter ‘the Arbitral Tribunal’).,,
2. The impugned award was rendered in the context of disputes that have arisen between the parties in relation with two agreements dated,,
28.12.2019, for establishment of two transmission lines. The disputes relate to SPIL’s claim for refund of the liquidated damages imposed by the",,
respondent (hereinafter ‘HVPNL’), cost overruns and outstanding payment for supply and completion of two transmission lines (referred to as",,
Package A). The Arbitral Tribunal dismissed the claims raised by SPIL on the ground that they were barred by limitation. Thus, the only controversy",,
that arises for consideration in this case is whether this decision of the Arbitrator is patently erroneous and vitiates the impugned award.,,
FACTUAL CONTEXT,,
3. HVPNL is a public sector undertaking incorporated under the Companies Act, 1956 and is, inter alia, engaged in the business of transmission,",,
supply and distribution of electricity within the state of Haryana.,,
4. SPIL is a private limited company incorporated under the Companies Act, 1956 and engaged in the business of establishing and executing turn-key",,
contracts of transmission lines, substations, and similar projects.",,
5. On 12.06.2009, HVPNL issued an Invitation for Bids bearing no. WB/2008/G-06 (hereinafter ‘IFB’) for executing the works regarding",,
procurement of plant, design, supply and installation, erection, testing and commissioning of two 220 kv electricity transmission lines viz. a line from",,
Gurgaon to Rangla Rajpur (hereinafter the ‘Rangla Rajpur Line’); and, a line from Nawada to A-5 Faridabad (hereinafter the ‘Faridabad",,
Line’) on the terms and conditions stipulated in the Instructions to Bidders. The works relating aforesaid two lines are referred to as ‘Package,,
A’.,,
6. On 29.09.2009, SPIL, as the lead partner, along with its joint venture partner, M/s ICOMM Tele Ltd., submitted a consolidated bid for Package A",,
for a sum of ?32,43,42,830/-. SPIL’s bid was accepted by HVPNL on 01.10.2009 and thereafter, two Letters of Acceptance dated 02.12.2009",,
(hereinafter the ‘LoAs’) were awarded to SPIL:,,
(i) Letter no WB-8/G-06/Pkg‘A’ (Supply) for Ex-works Supply and CIP Entry Border Point/CIF Indian Port of Entry of all plant and equipment,,
including mandatory spares and Design services of the Transmission Lines (First Contract).,,
(ii) Letter no WB-8/G-06/Pkg‘A’ (Erection) for port handling and custom clearance of plan and equipment including mandatory spares to be,,
supplied from abroad and loading, inland transportation for delivery at site, insurance, unloading, storage, handling at site, installation, testing and",,
commissioning including performance testing in respect of all the plant and equipment supplied under the First Contract and any other services except,,
design services included in the First Contract specified in the contract documents required for complete execution.,,
7. Pursuant to issuance of the LoAs, two agreements (hereinafter collectively referred as ‘the Agreements’) for Supply and Erection of the two",,
transmission lines â€" the Rangla Rajpur line and Faridabad Line â€" were executed between the parties on 28.12.2009. In terms of the Agreements,",,
the effective date of commencement of work was 10.02.2010 and the scheduled date of completion of works under Package A was a period of,,
fifteen months/450 days from the effective date of the Agreement, that is, on or before 05.05.2011. Further, in terms of Clause 13 of the Particular",,
Conditions of the Contract (hereinafter ‘PC’), SPIL was required to submit a Performance Security in the form of Bank Guarantee of an",,
amount equivalent to 10% of the Contract Price.,,
8. Admittedly, the works stipulated under the Agreements relating to Package A were not finished by the scheduled completion date. SPIL states that",,
delay was due to various breaches on the part of HVPNL as well as other reasons beyond its control. The Faridabad Line was completed on,,
08.05.2013 and the Rangla Rajpur Line was completed on 04.12.2015. Hence, the works under Package A stood completed on 04.12.2015. HVPNL",,
sought to impose liquidated damages on SPIL, in terms of Clause 40.4 of the General Conditions of the Contract (hereinafter ‘GCC’).",,
9. By various communications, SPIL requested for extension of time to complete the works relating to the transmission lines, without imposition of",,
liquidated damages as, according to it, the delay in execution of the works was not attributable to it. HVPNL, from time to time, granted such",,
extensions and deferred partial imposition of the liquidated damages, however, it stated that such deferment should not be treated as an extension of",,
time as the same would be considered on merits after completion of the works; and, if the liquidated damages become leviable, the same would be",,
recovered from SPIL along with the interest as per “SBI Base Rate + 3% applicable on date of release of paymentâ€.,,
10. On 08.05.2013, HVPNL issued the Taking Over Certificate with respect to the Faridabad Line.",,
11. By a communication dated 17.12.2015, SPIL requested for final extension of time upto 04.12.2015, without imposition of liquidated damages, for",,
the Rangla Rajpur Line. SPIL reiterated that the delay in execution of the works was not attributable to it and was caused due to (i) Approval of,,
GTP/DRG/Type Test; (ii) Vendor Approvals; (iii) Approval of Route Plan and Route Change; (iv) Right of Way Problem; (v) Heavy Rain Fall in the,,
Area; and, (vi) Forest Clearance.",,
12. Thereafter, on 31.12.2015, HVPNL issued a Taking Over Certificate with respect to the Rangla Rajpur Line.",,
13. By a communication dated 05.10.2016, HVPNL communicated its decision regarding SPIL’s application for final extension of time with",,
respect to the Rangla Rajpur Line. HVPNL sought to impose liquidated damages to the extent of 10% of the contract price for an alleged delay of,,
384 days on the part of SPIL in completion of the Rangla Rajpur Line. SPIL claims that the imposition of liquidated damages and the non-extension of,,
time were wrongfully determined and against the recommendations of the site managers.,,
14. By a communication dated 24.10.2017, SPIL requested for final extension of time upto 30.06.2013, without imposition of liquidated damages, for",,
the Faridabad Line. SPIL stated that the work was delayed on account of “repeated change in route plans, RoW issues from the various",,
Departments like Irrigation, DHBVN, HSIIDC, PGCIL, M/s Minu Collection Pvt Ltd (Pvt. Developers) and the resistance from Mujedi and Nawada",,
Villagesâ€. As per SPIL, Circuit 1 and Circuit 2 of the Faridabad line were commissioned on 14.11.2012 and 08.05.2013 respectively.",,
15. SPIL, by a letter dated 02.02.2018, invoked the agreement to refer the disputes to arbitration with respect to disputes pertaining to the Rangla",,
Rajpur line, in terms of Clause 46 of the GCC. Further, SPIL also requested HVPNL to expedite its decision regarding the application for extension of",,
time for the Faridabad Line, which was submitted by SPIL’s letter dated 24.10.2017.",,
Claim no.1,"Declare that the respondent is in breach of its obligations under the First
and Second Contract dated 28.12.2009.",
Claim no.2,Quash the impugned letter dated 05.10.2016,
Claim no.3,"Declare that the claimant is entitled to extension of time without the
imposition of Liquidated Damages from:
a. 08.05.2011 to 04.12.2015
for the RanglaRajpur Line; b. 08.05.2011 to 08.05.2013
for the Faridabad Line",
Claim no.4,"Declare that the claimant is entitled to a sum of
 Rs. 3,99,97,742/- in lieu of wrongfully imposed liquidated damages and
the respondent’s action of holding back the aforesaid sum is wrong",
Claim no.5,"Direct the respondent to pay a sum of Rs. 3,99,97,742/- plus interest
@18% per annum from
the scheduled date of final completion till date, to the claimant, towards
wrongfully imposed liquidated damages, which the respondent has further
wrongfully set off against other outstanding amounts payable to the
claimant",
Claim no.6,"Direct the respondent to pay a consolidated sum of
 Rs. 20,36,61,152.64/- to the claimant, towards overrun costs incurred
by it during the delay period i.e. from the scheduled date of completion till
the actual date of completion, including fixed overheads, loss of profits,
extension charges for the PBG’s etc.",
Claim no.7,"Direct the respondent to pay an amount of Rs. 3,96,41,824/- plus interest
@18% per annum from the actual date of final completion to the
claimant, as outstanding payment for completion of work under Package
B",
Claim no.8,"Grant all costs to be incurred by the claimant towards the present arbitral
proceedings",
Claim no.9,"Grant pendente lite interest and post award interest at the rate of 18%
per annum, on the sums claimed till the date of actual payment",
S.
No.",Prayer / Relief Sought,Order / Judgement
1.,"Direct the Respondent to pay Liquidated
damages recovered from the Claimant by the
Respondent.","Barred by
Limitation, hence rejected.
2.,"Overrun Costs calculated using Hudson’s
formula","Barred by
Limitation, hence rejected.
3.,"Outstanding payment for completion of work
under Package A","Barred by
Limitation, hence rejected.
4.,"Respondent is liable to pay interest at the rate
of 18 % per annum","Barred by
Limitation, hence rejected.
damages in respect of the Rangla Rajpur Line on 05.10.2016 and thus, its cause of action for challenging the levy of liquidated damages could not",,
arise prior to that date.,,
38. HVPNL had sought to deduct liquidated damages from the payments against the invoices raised by SPIL. However, at the request of SPIL, the",,
recovery of part of the liquidated damages was deferred. The Arbitral Tribunal held that deferring recovery of the liquidated damages did not extend,,
the period of limitation as HVPNL had, in fact, indicated deduction of liquidated damages against invoices raised by SPIL. This is clear from",,
Paragraph 23 of the impugned award, which reads as under:",,
“23. The situation before us is similar in that the cause of action had arisen on each occasion when the Respondent deducted the LD and deferred,,
the time for deduction of LD. Hence, the Claimants claims/ reliefs qua arouse on each such occasion of deduction and on each such occasion when",,
the Respondent paid all invoices but with confirmation of the deductions of LD (which was merely being deferred). Hence, the claims / relief sought",,
qua refund of LD payments and, further raising fresh claims of LD refund and cost over-runs is time-barred.â€",,
39. The aforesaid reasoning is central to the controversy raised in the present petition. According to SPIL, the aforesaid view is ex facie erroneous",,
and vitiates the impugned award. SPIL claims that although HVPNL had indicated deductions on account of liquidated damages, SPIL had requested",,
that the same be deferred. HVPNL had acceded to SPIL’s request albeit subject to the conditions that if liquidated damages were leviable, the",,
same would be recovered with interest. SPIL claims that the communications between the parties, clearly indicated that the dispute regarding levy of",,
liquidated damages was a live issue.,,
40. The first limb of the aforesaid controversy is whether the levy of liquidated damages is inextricably linked to the issue regarding extension of time,,
for completing the contract. According to the Arbitral Tribunal, the same is not connected and the cause of action resulting from levy of liquidated",,
damages had arisen notwithstanding that SPIL’s claim for extension of time for completion of the contract was being processed. This is evident,,
from Paragraph 28 of the impugned award, which is set out below:",,
“28. Moreover, a cause of action must relate to the reliefs being claimed. The Claimant herein is not seeking mere declaration of rejecting the EOT",,
analysis provided by the Respondent, but rather seeking a reversal of the LDs deducted by the Respondent. Mere communication of rejecting a",,
belated request for EOT does not in any manner alter, change, add or less from the payments already conducted in March 2013. Hence, the",,
Claimant’s knowledge of the LD deduction, which is one of the reliefs sought, arose at the time of the first deduction of LD i.e. in the year 2011,",,
and the communications in 2018 (Rangla Rajpur Line) or even later in 2019 (Faridabad Line) in no manner alter the cause of action that arose in,,
2011.â€,,
41. This Court is unable to accept that the question of recovery of liquidated damages is not connected with the claim for extension of time. SPIL had,,
sought extension of time for completion of the contract on various grounds; it claimed that the delay was for reasons beyond its control or otherwise,,
attributable to HVPNL. It is not HVPNL’s case that it would be entitled to levy liquidated damages in the event the delay in execution of the,,
work was found to be justified. Plainly, HVPNL cannot claim any damages on account of delay for reasons attributable to it.",,
42. It is also relevant to refer to Clause 40.1 of the GCC, which expressly provides for extension of time in certain circumstances. The said clause is",,
reproduced below:,,
“40. Extension of Time for Completion,,
40.1 The Time(s) for Completion specified in the PC pursuant to GC Sub-Clause 8.2 shall be extended if the Contractor is delayed or impeded in the,,
performance of any of its obligations under the Contract by reason of any of the following:,,
(a) any Change in the Facilities as provided in GC Clause 39,,
(b) any occurrence of Force Majeure as provided in GC Clause 37, unforeseen conditions as provided in GC Clause 35, or other occurrence of any of",,
the matters specified or referred to in paragraphs (a), (b) and (c) of GC Sub-Clause 32.2",,
(c) any suspension order given by the Employer under GC Clause 41 hereof or reduction in the rate of progress pursuant to GC Sub-Clause 41.2 or,,
(d) any changes in laws and regulations as provided in GC Clause 36 of,,
(e) any default or breach of the Contract by the Employer, Appendix to the Contract Agreement titled or any activity, act or omission of the Employer,",,
or the Project Manager, or any other contractors employed by the Employer, or",,
(f) any delay on the part of a sub-contractor, provided such delay is due to a cause for which the Contractor himself would have been entitled to an",,
extension of time under this sub-clause, or",,
(g) delays attributable to the Employer or caused by customs, or",,
(h) any other matter specifically mentioned in the Contract,,
By such period as shall be fair and reasonable in all the circumstances and as shall fairly reflect the delay or impediment sustained by the,,
Contractor.â€,,
43. Clause 26.2 of the GCC provides for the imposition of liquidated damages. The said clause is set out below:,,
“26.2 If the Contractor fails to attain Completion of the Facilities or any part thereof within the Time for Completion or any extension thereof under,,
GC Clause 40, the Contractor shall pay to the Employer liquidated damages in the amount specified in the PC as a percentage rate of the Contract",,
Price or the relevant part thereof. The aggregate amount of such liquidated damages shall in no event exceed the amount specified as,,
“Maximum†in the PC as a percentage rate of the Contract Price. Once the “Maximum†is reached, the Employer may consider termination",,
of the Contract, pursuant to GC Sub-Clause 42.2.2.",,
Such payment shall completely satisfy the Contractor’s obligation to attain completion of the Facilities or the relevant part thereof within the Time,,
for Completion or any extension thereof under GC Clause 40. The Contractor shall have no further liability whatsoever to the Employer in respect,,
thereof.,,
However, the payment of liquidated damages shall not in any way relieve the Contractor from any of its obligations to complete the Facilities or from",,
any other obligations and liabilities of the Contractor under the Contract.,,
Save for liquidated damages payable under this GC Sub-Clause 26.2, the failure by the Contractor to attain any milestone or other act, matter or thing",,
by any date specified in the Appendix to the Contract Agreement titled Time Schedule, and / or other program of work prepared pursuant to GC Sub-",,
Clause 18.2 shall not render the Contractor liable for any loss or damage thereby suffered by the Employer.â€,,
[underlined for emphasis],,
44. Clause 26.2 of the PC is also relevant and reads as under:,,
“PC 26. Completion Time Guarantee,,
PC 26.2,,
Applicable rate for liquidated damages: 0.5% of contract price per week or part thereof.,,
Maximum deduction for liquidated damages: 10% of contract price.,,
No bonus will be given for earlier completion.â€,,
45. The opening sentence of Clause 26.2 of the GCC expressly indicates that the liquidated damages under the said clause would be levied only if the,,
Contractor fails to complete the facilities within the time stipulated for completion or any extension thereof under Clause 40 of the GCC. Thus, clearly,",,
if any extension of time for completion of the contract was granted to SPIL under Clause 40 of the GCC, liquidated damages could not be imposed.",,
Thus, the levy of liquidated damages is contingent on rejection of SPIL’s claim for exclusion of time.",,
46. The next question to be examined is whether the issue of levy of liquidated damages was finally closed by HVPNL.,,
47. SPIL had applied for extension of time for completion of the Rangla Rajpur Line for the first time by its letter dated 17.03.2011 and had sought,,
further time till 31.12.2011. The said letter was followed by another letter dated 19.03.2011, whereby SPIL had requested for extension of time upto",,
31.12.2011 “without imposition of liquidated damages†for the delay, which it claims was not attributable to it.",,
48. SPIL made a similar request for extension of time for completing the Faridabad Line by its letter dated 06.06.2011. The scheduled date for,,
completion of the Agreement was 05.05.2011. As noted above, if the completion of the project was unjustifiably delayed beyond that date, HVPNL",,
would be liable to impose liquidated damages in terms of Clause 26.2 of the GCC. In this context, SPIL sent a letter dated 13.09.2011 requesting",,
HVPNL to defer the levy of liquidated damages. The said letter is set out below:,,
“RK/HVPNL-101 Dt. 13.09.11,,
To,,
The Chief Engineer M.M.,,
HVPNL Panchkula,,
Sub.: Defferment of L.D. against Package No.WB/G-6 PKG A&B.,,
Respected Sir,",,
We hereby confirm that all the T. line under these Package will be commissioned by 31.12.2011. Hence you are requested to defer the L.D. upto,,
31.12.2011 for supply and Erection.,,
In case of the extension of time is not allowed then the amount of L.D. can be deducted along with applicable SBI base interest rate + 3% Extra from,,
our bills.,,
Thanking you,",,
Yours faithfully,",,
Sd/-â€,,
49. It is relevant to note that the aforesaid letter sought extension of time for both the packages (Package A and Package B). The dispute in the,,
present case relates to Package A (the Rangla Rajpur Line and Faridabad Line).,,
50. HVPNL responded to the said letter on 19.09.2011. The contents of the said letter are reproduced below:,,
“Subject: Deferment of Liquidity Damages against Contract No. WB-8 to 11/G-06/Pkg.-A&B/XENWB Dated 30.01.2010 for Construction of 220,,
KV Transmission Lines associated with 220 KV Substation Rangla Rajpur, Raiwali & A-5, Faridabad.",,
Please refer your letter dated 01.09.2011 and 13.09.2011 on the subject cited above,",,
In this regard, it is intimated as under:",,
I. The contractual completion date for the contract no. WB-8 to 11/G-06/Pkg.-A&B/XENWB was 05.05.2011. Due to various reasons, the contracts",,
could not be completed within time. Now you have committed to complete the work of both packages by 31.12.2011. Accordingly, the 80% of",,
Liquidity Damages (after consider the Liquidity Damages along with interest, pending payments and retention money of the contract) are deferred till",,
31.12.2011 against contract no. WB-8 to 11/G-06/Pkg.-A&B/XENWB, if recovered.",,
II. In case LD becomes leviable, the same shall be recovered form you along with the interest as per SBI Base rate +3% applicable on date of",,
release of payment.â€,,
51. The second paragraph of the above letter is important. The expression “In case LD becomes leviable†clearly indicates that the question,,
whether liquidated damages were leviable was not concluded against SPIL. As noticed above, the levy of liquidated damages is dependent upon",,
whether the Agreement is completed within the time stipulated or as extended under Clause 40 of the GCC. Since the question regarding extension of,,
time was pending; the question whether SPIL would be liable to pay liquidated damages remained open.,,
52. On 24.12.2011, SPIL made a further request for extension of time till 31.08.2012 without levy of liquidated damages in respect of both the Rangla",,
Rajpur Line as well as the Faridabad Line. This was followed by another letter dated 01.03.2012, whereby SPIL stated that it had submitted all the",,
relevant documents pertaining to extension of time for completion till 30.06.2012 for Packages A and B. SPIL also requested that the levy of,,
liquidated damages be deferred upto 30.06.2012.,,
53. HVPNL acceded to the said request and by a letter dated 27.03.2012 agreed to defer recovery of 90% of the liquidated damages till 30.06.2012.,,
The second paragraph of the said letter is relevant and set out below:,,
“II. In case LD becomes leviable, the same shall be recovered from you along with the interest as per SBI Base rate +3% applicable on date of",,
release of payment. It is further added that your request has been accepted with the condition that you will adhere to the schedule submitted by you,,
along with your request. In order to monitor the progress of work, it is requested to ensure submission of weakly progress report viz a viz pert chart to",,
the concerned Project Manager under intimation to this office.â€,,
54. It is important to note that HVPNL reiterated that “in case LD becomes leviable, the same shall be recovered from you along with the interest",,
as per SBI Base rate +3% applicable on date of release of paymentâ€.,,
55. SPIL made a request for extension of time on various occasions for completion of the Rangla Rajpur Line as well as the Faridabad Line.,,
56. The Faridabad Line was commissioned on 08.05.2013 and was taken over by HVPNL.,,
57. Thereafter, on 08.07.2013, SPIL sent a letter requesting for deferment of liquidated damages for both the packages (Package A and Package B).",,
SPIL also confirmed that “in case LD becomes leviable, we agree for recovery of the same with interest rates as per HVPNL norms (i.e. SBI",,
base rate +3%)â€.,,
58. HVPNL acceded to this request and deferred the levy of liquidated damages albeit on the condition that “in case liquidated damages,,
becomes leviable, the same shall be recovered from you along with the interest as per SBI base rate +3% applicable on date of release of",,
paymentâ€.,,
59. By a letter dated 15.01.2014, addressed to the Chief Engineer (TS), HVPNL, SPIL requested that its time extension case for Packages A and B",,
be forwarded to CE (MM), HVPNL.",,
60. On 07.08.2014, SPIL, once again, requested for deferment of liquidated damages in respect of the Rangla Rajpur Line till 30.04.2015 with its",,
undertaking to pay interest in case the liquidated damages become leviable. HVPNL acceded to this request and communicated the same by its letter,,
dated 16.09.2014. A similar request was made by SPIL on 03.03.2015.,,
61. The Rangla Rajpur Line was commissioned on 04.12.2015 and with the handing over of the said line, the contract in question (Package A) stood",,
performed.,,
62. By a letter dated 17.12.2015, SPIL sent a request for extension of time setting out its case for the delay in commissioning the Rangla Rajpur Line.",,
63. HVPNL rejected the said request by a letter dated 05.10.2016. It concluded that the handing over of the line was delayed by 384 days and the,,
said delay was clearly attributable to SPIL. Therefore, it was not necessary to discuss further delay as the maximum amount of liquidated damages",,
(10%) was leviable on account of delay of 384 days. In view of the said reasoning, HVPNL confirmed levy of the liquidated damages computed at",,
10% of the contract value. Accordingly, the cause of action for SPIL to initiate arbitral proceedings regarding levy of liquidated damages arose on that",,
date,,
64. Thereafter, SPIL in furtherance of its letter dated 13.02.2013, sent another letter dated 24.10.2017 seeking extension of time for completion of the",,
Faridabad Line.,,
65. Aggrieved by the letter dated 05.10.2016, whereby HVPNL had decided to impose the maximum penalty of 10% and reject SPIL’s request",,
for extension of time in respect of the Rangla Rajpur Line, SPIL issued a letter dated 02.02.2018 requesting for appointment of an arbitrator for",,
resolution of the said dispute.,,
66. According to SPIL, HVPNL’s decision is unfair and unjustified as the work had been delayed on various grounds such as forest clearance,",,
severe ROW problem, prolonged court cases and delay in arranging the mandatory approvals by HVPNL from other government agencies.",,
Simultaneously, SPIL also requested that its time extension case in respect of the Faridabad Line be expedited as both the Faridabad Line and Rangla",,
Rajpur Line were part of the same contract (Package A).,,
67. It is apparent that the Arbitral Tribunal had ignored the language of various communications issued by HVPNL, whereby it had deferred the",,
recovery of liquidated damages. Clearly, this was not a case where HVPNL had levied liquidated damages and deferred its recovery simpliciter; in",,
this case, HVPNL also confirmed the recovery was contingent on the liquidated damages being found to be leviable. This matter was concluded with",,
HVPNL finding that SPIL was responsible for delaying the project by 384 days and was thus, liable to pay 10% of the contract value.",,
68. This Court is of the view that the Arbitral Tribunal has erred in proceeding on the basis that the cause of action for recovering the liquidated,,
damages and for extension of time, are unrelated. Admittedly, if SPIL’s request for extension of time was accepted by HVPNL under Clause 40",,
of the GCC, there is no question of HVPNL imposing any liquidated damages. HVPNL rejected SPIL’s case for extension of time and imposed",,
the maximum liquidated damages quantified at 10% of the contract value for the first time on 05.10.2016.,,
69. It is also material to note that HVPNL had neither at the stage of reference of disputes to arbitration nor in its pleadings contested SPIL’s,,
claim in respect of the Rangla Rajpur Line, as being barred by limitation. HVPNL’s objection was in respect of SPIL’s claim pertaining to the",,
Faridabad Line.,,
70. In view of the above, the Arbitral Tribunal’s conclusion that SPIL’s claim in respect of the Rangla Rajpur Line for recovery of liquidated",,
damages is barred by time is, ex facie, erroneous as it completely ignores the language of the letters issued by HVPNL.",,
71. Insofar as the claims relating to the Faridabad Line are concerned, it is essential to note a few dates. On 03.03.2013, SPIL made a request for",,
extension of time for completing the Faridabad Line by 30.06.2013 without levy of liquidated damages. After the second circuit of the Faridabad Line,,
was completed on 08.05.2013, SPIL sent a letter dated 15.01.2014 to the Chief Engineer (TS), HVPNL requesting him to send the final time",,
extension in respect of the Faridabad Line to the Chief Engineer (MM), HVPNL at the earliest. SPIL also sent a letter dated 07.06.2014 referring to",,
the Minutes of the Meeting held on 17.04.2014 and requested for approval of extension of time for Package A (which also includes Faridabad Line).,,
72. Admittedly, on 03.01.2017, HVPNL requested SPIL to submit the final extension case for the Faridabad Line for taking necessary action and",,
dealing with the same. On 24.10.2017, SPIL submitted its request for final extension of time. HVPNL claimed that in response to the same, it sent a",,
letter dated 08.11.2017 requesting SPIL to submit certain information for initiating action for deciding its case for extension of time. HVPNL claimed,,
that it, once again, sent a letter dated 08.03.2019 seeking further information. SPIL had responded by letter dated 26.03.2019 forwarding certain",,
information, which according to the HVPNL was incomplete.",,
73. HVPNL claims that it takes sixteen to nineteen months to process a case for extension of time (See: Affidavit dated 30.05.2019).,,
74. It is clear from the above, that the issue regarding extension of time of the Faridabad Line has not been determined as yet.",,
75. It is material to note that HVPNL objected to the claim in relation to the Faridabad Line on the ground that the disputes relating to the Faridabad,,
Line were beyond the jurisdiction of the Arbitral Tribunal. HVPNL had also filed an application dated 20.05.2019 under Section 16 of the A&C Act,,
contending that the Arbitral Tribunal had no jurisdiction to deal with the said claim. Paragraphs 4, 5, 6 and 7 of the said application are relevant and set",,
out below:,,
“4. Without prejudice to the submissions made in the Statement of Defence, the Respondent respectfully submits that this application is being made",,
by the Respondent to raise a legal objection regarding the lack of jurisdiction of this Hon’ble Tribunal to adjudicate the dispute between the,,
Claimant and the Respondent pertaining to Faridabad Line considering the fact that the present Arbitration was never invoked for Faridabad Line. It,,
was only invoked for Rangla Rajpur Line. The respondent submits that the time extension case for Faridabad Line is still pending and yet to be,,
decided.,,
5. Respondent submits that vide letter dated 03.01.2017, the Respondent requested Claimant to submit the final time extension case for Faridabad Line",,
for taking necessary action and dealing the same on the merits. In reply to the aforesaid letter, Claimant submitted its final time extension case vide",,
letter dated 24.10.2017 which is approximately 9 months after the request made by the Respondent. Copy of letter dated 03.01.2017 and 24.10.2017 is,,
annexed is marked as Annexure R-I (Colly).,,
6. In reply of the aforesaid letter Respondent further requested Claimant vide letter dated 08.11.2017 to submit schedule of suppl, erection, testing &",,
commissioning in respect of Faridabad Line, which are essential for initiating any action to decide time extension case. It is pertinent to mention here",,
that the aforesaid letter is the last communication in terms of time extension for Faridabad and Respondent has not received any reply from Claimant,,
for the said letter due to which the decision on time extension for Faridabad Line is pending. The Claimant failed to produce necessary documents for,,
deciding the time extension case and therefore the Respondent is not liable for Claimant’s failure. Copy of letter dated 08.11.2017 is annexed is,,
marked as Annexure R-2.,,
7. Thereafter, the Claimant vide letters dated 02.02.2018, 09.06.2018 and 29.08.2018 requested to the Respondent for referring the matter to",,
arbitration in terms of the provisions of the Contract. In response, the Respondent vide letter dated 16.11.2018 accepted the request of the Claimant",,
for appointment of a Sole Arbitrator for adjudication on the disputes. Pertinently, the request of the Claimant for referring the disputes to arbitration as",,
well as the Respondent’s acceptance to the same was only in respect of the Rangla Rajpur Line and not the Faridabad Line as the Time,,
Extension case of the Faridabad Line was still pending with the respondent. Hence, it is submitted that the issues with respect to the disputes",,
pertaining to Faridabad Line have not been referred for adjudication before this Hon’ble Tribunal and therefore the same are beyond the,,
jurisdiction of this Hon’ble Tribunal. Hence any claim made by the Claimant qua the Faridabad line in the present arbitration proceedings is ex,,
facie illegal and deserves to be dismissed in limine. Copy of Letters dated 02.02.2018, 09.06.2018 and 29.08.2018 and 16.11.2018 is annexed is",,
marked as Annexure R-3 (Colly).â€,,
[underlined for emphasis],,
76. The Arbitral Tribunal directed SPIL to provide such further information as necessary by 27.04.2019 and directed HVPNL to decide the question,,
on the basis of the information as available and as provided by 31.05.2019.,,
77. HVPNL did not comply with the said direction. It filed an affidavit stating that the exercise for determining SPIL’s request for extension of,,
time would require several months.,,
78. It is relevant to note that it was HVPNL’s case â€" in its application filed under Section 16 of the A&C Act â€" that it had called upon SPIL,,
by its letter dated 03.01.2017 to submit its case for final extension of time. HVPNL had, therefore contended that the disputes relating to the",,
Faridabad Line had not been referred.,,
79. It is material to note that Package A is a singular contract although it entrails commissioning of two transmission lines. It was SPIL’s case that,,
the disputes regarding the two transmission lines could not be separated. SPIL also contended that the question of levy of liquidated damages was,,
required to be evaluated as a whole and could not be split. According to HVPNL, the issue regarding extension of time for the Faridabad Line was not",,
concluded and the same was pending consideration. HVPNL also contended that the disputes regarding the Faridabad Line had not been referred to,,
arbitration and therefore, the Arbitral Tribunal had no jurisdiction to decide the same.",,
80. It is seen that the Arbitral Tribunal had not rendered findings on the aforesaid questions. Clearly, if HVPNL is correct in its submission that the",,
Arbitral Tribunal had no jurisdiction to entertain any claim or dispute regarding the Faridabad Line, the Arbitral Tribunal’s decision that the claims",,
relating to the Faridabad Line are barred by limitation is without jurisdiction.,,
81. SPIL’s contention that contract was a singular contract would also have a bearing on the question of limitation.,,
82. Concededly, the entire liquidated damages that have been levied are attributed to the delay in completion of the Rangla Rajpur Line. This is",,
apparent from HVPNL’s letter dated 05.10.2016.,,
83. Mr Malik, learned counsel appearing for HVPNL, also confirmed that the liquidated damages were levied on the contract as a whole",,
notwithstanding that the contract had specified separate prices for supply and erection of the two transmission lines. In the written submissions filed on,,
behalf of HVPNL, it was confirmed that the entire liquidated damages in respect of the contract were recovered in connection with the delay in",,
respect of the Rangla Rajpur Line. It was also mentioned that the liquidated damages could be calculated proportionately and both the lines can be,,
separately referred to arbitration.,,
84. Thus, the decision of the Arbitral Tribunal that SPIL’s claim regarding liquidated damages is barred by limitation is, ex facie, erroneous.",,
85. The impugned award to the extent it rejects SPIL’s claim regarding levy of liquidated damages as barred by limitation, is set aside. The parties",,
are at liberty to refer the said dispute to arbitration afresh.,,
86. The petition is allowed to the extent as aforesaid.,,
