Ministry of Road Transport and Highways v. L&T Transportation Infrastructure Ltd. & Anr

NAVIN CHAWLA, J OCTOBER 11, 2019 RN

Page 1 * IN THE HIGH COURT OF DELHI AT NEW DELHI + O.M.P. 289/2015 Reserved on: 07.08.2019 Date of Decision: 11.10.2019 MINISTRY OF ROAD TRANSPORT AND HIGHWAYS ..... Petitioner Through: Mr.Sandeep Sethi, Sr. Adv.with Mr.Ruchir Mishra, Mr.Mukesh Kr. Tiwari, Mr.Sanjiv Kr. Saxena, Mr.Ramneek Mishra, Mr.Abhishek Rana and Mr.Sidhant Kumar, Advs. versus L&T TRANSPORTATION INFRASTRUCTURE LTD. & ANR. ..... Respondents Through: Mr.Dayan Krishanan, Sr.Adv. with Mr.Arpan Behl, Adv. for R-1. Mr.D.Balaraman and Mr.Anand Sathiyaseelan, Advs. for R-2. CORAM: HON'BLE MR. JUSTICE NAVIN CHAWLA 1. This petition under Section 34 of the Arbitration and Conciliation Act, 1996 has been filed by the petitioner challenging the Arbitral Award dated 12.12.2014 passed by the Arbitral Tribunal adjudicating the disputes that have arisen between the parties in relation to the Tripartite Concession Agreement dated 03.10.1997, executed between Larsen and Toubro Ltd. (L&T Ltd.) with the petitioner and the respondent no.2. The respondent no.1 herein is the assignee of L&T Ltd. under the Deed of Page 2 Assignment dated 25.11.1997. It is a subsidiary of L&T Ltd. and is the Special Purpose Vehicle created under the terms of the contract and for discharge of the obligations of L&T Ltd. contained therein. 2. Before adverting to the challenge to the Arbitral Award, some basic facts in relation to the Concession Agreement need to be noticed. The Concession Agreement was awarded on Build, Operate and Transfer (BOT) basis. It includes design, construction, maintenance and operation of 28 km of the Coimbatore Bypass on NH-47 at KM 141/00 on the Salem side merging with KM 171/200 on Palghat side of the same highway. It further included construction of an additional Two Lane Bridge across river Noyyal which is the Athupalam Bridge, as also maintenance of existing bridges. 3. The Arbitral Tribunal noticed the important dates in regard to the Concession Agreement in paragraph 8 of the Award, which is reproduced hereinbelow: Invitation of Tender on BOT basis September 1995 Invitation of re-submission of bids for additional scope of work by including 2 lane Athupalam Bridge 16/12/1995 Date of submission of bid by M/s L&T 05/06/1997 Date of signing the Concession Agreement 03/10/1997 Deed of Assignment to M/s L& T TIL by L&T Ltd. 25/11/1997 Date of commencement of work of Athupalam Bridge & Bypass 03/12/1997 Date of commissioning of Athupalam Bridge 03/12/1998 Date of commissioning of Bypass 03/12/1999 End of Concession period for Athupalam Bridge 03/12/2018 End of Concession period for Bypass 03/12/2029 Page 3 Length of Bypass About 28 km Cost of Project Rs.104.40 Crores 4. The majority of the Arbitral Tribunal, consisting of two Arbitrators has awarded a sum of Rs.136.22 crores to the respondent no. 1 along with interest towards loss of revenue sustained by the respondent no.1 for the Athupalam Bridge. This claim of the respondent no.1 was however, rejected by the Arbitrator in minority. 5. The first challenge to the Award is to the grant of the said claim in favour of the respondent no.1. 6. The learned senior counsel for the petitioner submits that this claim of the respondent no.1 was barred by limitation. He submits that in terms of Clause 2.14 of the Concession Agreement, a Steering Group (SG) was constituted for taking all project level decisions for the smooth implementation of the Concession Agreement. It had the representatives of the petitioner, the respondent no.2 as also the respondent no.1, the Concessionaire. Respondent no.1 raised a claim of financial compensation for loss of revenue in the form of collection of toll from Athupalam Bridge, however, the SG in its meeting held on 21.07.1999 recorded that the Concession Agreement does not provide for any cash compensation. Even in the meeting of the SG held on 18.04.2001, the respondent no.1 was advised to submit a proposal for compensation against loss of toll revenue considering the possible options of extension