National Highways Authority of India v. M/S Intercontinental Consultant and Technocrats Pvt Ltd

S. RAVINDRA BHAT, J

A. K. CHAWLA, J AUGUST 03, 2018 nn

* IN THE HIGH COURT OF DELHI AT NEW DELHI Date of decision: 03.08.2018 + NATIONAL HIGHWAYS AUTHORITY OF INDIA ..... Appellant Through: Mr. Mukesh Kumar and Ms. Soumya Priyadarshini, Advocates. versus M/S INTERCONTINENTAL CONSULTANT AND TECHNOCRATS PVT LTD ..... Respondent Through: Mr. Anil Sapra, Sr. Adv. with Mr.Siddharth Vaid, Mr. Sarthak Katyal and Mr. Jaideep Singh, Advocates. CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE A.K. CHAWLA HON'BLE MR. JUSTICE S. RAVINDRA BHAT (ORAL) % CAV 693/2018 Since the counsel for the caveator has put in appearance the caveat stands discharged. CM APPL. 30587/2018 (for exemption) Allowed, subject to all just exceptions. FAO(OS) (COMM) 162/2018 & CM APPL. 30586/2018 (for stay) The appellant-National Highways Authority of India (hereinafter 'NHAI') is aggrieved by a judgment and order of the learned Single Judge rejecting its petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter 'the Act'). That petition has challenged an Arbitration Award dated 10.06.2015. The dispute between the parties arose on account of the payment under a consultancy services agreement entered into by the respondent-M/s Intercontinental Consultant and Technocrats Pvt. Ltd. (hereinafter 'ICT') with NHAI on 28.01.2002. 2. The dispute arose sometime in 2012 pertaining to reimbursement of income tax to the tune of `66,37,332/-. These were referred to the Arbitral Tribunal under the Act. After considering the rival pleadings and submissions of the parties, the Tribunal accepted the claim of the ICT and awarded a sum of over `67 lacs (which was later modified by learned Single Judge) and further sum of `25,52,799/- - both with interest @ 10% per annum. 3. NHAI objected to the award primarily on the construction placed by the Tribunal with respect to the two conditions in the Agreement (Clauses 1.10.1 and 1.10.2). They read as follows: "1.10.1 For domestic Consultants and foreign consultants who are permanent residents in India "The Consultants, Sub-consultants and the Personnel shall pay the taxes, duties, fees, levies and other impositions levied under the existing, amended or enacted laws during life of this contract and the client shall perform such duties in regard to the deduction of such tax as may be lawfully imposed. 1.10.2 For foreign Consultants- The client warrants that the Client shall pay on behalf of the Consultants, Sub-Consultants any taxes, duties, fees, levies and other impositions imposed in India, under the Applicable Law, on the Consultants and Sub-Consultants in respect of: (a) any payments whatsoever made directly by the client to the Consultants and sub-consultants (as authorized by the Consultant), in connection with the carrying out of the Services; (b) any equipment, materials, and supplies brought into India by the Consultants or Sub-consultants for the purpose of carrying out the Services and which, after having been brought into such territories will be subsequently withdrawn therefrom by them. (c) any equipment imported for the purpose of carrying out the Services and paid for out of funds provided by the Client and which is treated as property, of the Client; (d) any property brought into India by the Consultants, any Sub-consultants; the Personnel of either of them (other than Indian nationals or permanent residents of India), or the eligible dependents of such Personnel for their personnel use and which will subsequently be withdrawn therefrom by them upon their respective departure from India, provided that; (1) the Consultants, Sub-consultants and Personnel, or eligible dependents, shall follow the usual customs procedures of the Government in importing property into India; and (2) if the Consultants, Sub-consultants or Personnel, or their eligible dependents, do not withdraw but dispose of any property in India upon which customs duties and taxes have been exempted, the Consultants, Sub-consultants or Personnel, as the, case may be, (i) shal