India: Division Bench Of Delhi High Court Upholds The Single Judge's Judgment Upholding The Arbitral Award In Favour Of PNC-BEL (JV) Against NHAI

Last Updated: 6 August 2019
Article by Singh & Associates

To map the progress of Indian Courts in arbitration matter, a perfect example is the PNC-BEL matter, wherein the Delhi High Court has not only decided the Application filed by NHAI under section 34 and Appeal thereof under section 37 of the Arbitration and Conciliation Act, 1996, but also releases the entire amount of around Rs.143 Crores to Concessionaire around 10 months of the passing of the Award. In this regard, the Award was pronounced by the Arbitral Tribunal on 20.09.2018, the section 34 Objection was decided on 24.05.2019 and the Appeal under section 37 was decided on 26.07.2019 and finally the money has been received by Concessionaire on 30.07.2019.

The Division Bench of the Delhi High Court on 26.07.2019 rejects the Appeal of NHAI under section 37 of the Arbitration and Conciliation Act, 1996 regarding an Arbitral Award which was passed in favour of PNC-BEL (JV). The Appeal [F.A.O. (O.S.) (COMM) No. 174/2019, decided on 26th July, 2019] was filed by NHAI challenging the Order passed by the Hon'ble Single Judge on 24.05.2019, upholding the Arbitral Award dated 20.09.2018 passed by the Arbitral Tribunal adjudicating the disputes that have arisen between PNC-BEL (JV) and NHAI in relation to the Agreement dated 04.02.2005, executed between the parties for the Project for Widening and Strengthening of National Highway No. 24 from Km 93.00 to Km 149.25 to four lane standards (Garhmukteshwar to Moradabad) & ROB at Km 181 of NH-24 and Bridges on NH-87 in Uttar Pradesh (Package-II).

PNC-BEL (JV) is a joint venture of M/s PNC Infratech Ltd. (PNC), which is a listed entity and M/s Bhageeratha Engineering Ltd. (BEL).

The Contract Price was of Rs. 221,42,18,567/-. The date of commencement of work was 31.03.2005 and the date for scheduled completion of work was 30.09.2007. The work with respect to Widening and Strengthening of NH-24 from Km 93.00 to Km 149.25, that is, a total of 56.25 Km, to four lanes standard was completed by the PNC-BEL(JV) on 15.07.2009, that is, after delay of 22 months from the scheduled completion date. As far as the ROB work is concerned, the same was completed on 10.10.2012, that is, after a delay of almost 45 months.

It is PNC-BEL(JV)'s case that the NHAI delayed the project on various counts like, late handing over of unhindered and unencumbered RoW, change of alignment, failure of NHAI to co-ordinate regarding cutting of trees, delay in providing the drawings, delay in approving the extension of time requests, etc. The Arbitral Tribunal after carefully going through the contentions of both the parties and based on the available evidence, awarded a sum of Rs.104 Crores (approximately) excluding interest.

NHAI challenged the Order of the Hon'ble Single Judge on various grounds, however, the Hon'ble Division Bench holds that there exists no ground to interfere with the Order of the Single Judge or the Award and thereby dismissed the said Petition of NHAI.

In this case, the Hon'ble Court on the date of first listing of the matter, also directed the NHAI to deposit 100% amount of the Award including interest and while dismissing the Objections of NHAI, the Hon'ble Court was further pleased to direct for release of the said amount (approximately a sum of Rs.143 Crores). It is unique case, where the entire money has been released to the Claimant around 10 months of the Award.

PNC-BEL(JV) was represented by a team lead by Mr. Manoj K. Singh, Founding Partner of Singh & Associates, Mr. Nilava Bandyopadhyay, Senior Partner of Singh & Associates.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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