Indian Oil Corporation Ltd v. Larsen & Toubro Limited

order as to cost.

NAVIN CHAWLA, J JUNE 01, 2018 RN/vp

Page 1 * IN THE HIGH COURT OF DELHI AT NEW DELHI + O.M.P. (COMM) 366/2017 Reserved on: 7th March, 2018 Date of decision : 1st June, 2018 INDIAN OIL CORPORATION LTD ..... Petitioner Through Mr.V.N. Koura, Ms.Paramjeet Benipal and Mr.Abhinav Tandon, Advs. versus LARSEN & TOUBRO LIMITED ..... Respondent Through Mr.Rajiv Nayar and Mr.Ravindra Shrivastava, Sr. Advs. with Mr.Dhirendra Negi, Mr.Ananya Kumar and Ms.Pragya Chauhan, Advs. CORAM: HON'BLE MR. JUSTICE NAVIN CHAWLA 1. This petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act') has been filed challenging the Arbitral Award dated 18th May 2017 read with the correction Order dated 23rd June 2017, passed by the Arbitral Tribunal comprising of three Arbitrators (hereinafter referred to as the 'Impugned Award'). The Impugned Award holds the petitioner's claim for Price Discount on account of alleged delay by the respondent in completion of Contract as unjustified and contrary to the terms of the Agreement and directs the petitioner to pay the withheld/ deducted amount of Rs.115,11,28,129/- to the respondent, along with pre-award as well as future interest. Page 2 2. The petitioner, so as to set up a 238.35 MW Captive (Cogeneration) Power Plant (hereinafter referred to as "CPP") within its Naptha Cracker Plant at Panipat ("NCPP"),to supply steam and power for testing, commissioning and operating other units within the NCPP, issued a tender for Project Management, Design, Detailed Engineering Procurement, Manufacturing, Supply, Transportation, Storage, Fabrication, Construction, Installation, Testing, Pre-commissioning and Commissioning and Performance Guarantee Test Runs of the CPP. The respondent, being the lowest eligible bidder, was awarded the aforesaid work under the Turnkey Package 'EPCC 4' vide Fax of Acceptance dated 31st August 2006 and detailed Letter of Acceptance dated 15th September 2006. The parties herein, accordingly, entered into Contract No.HQ/PJ/PNCP/2006-07/EPCC-4/01 dated 22nd September, 2006. The conditions governing the parties were contained in various documents. The contract price as per the detailed Letter of Acceptance was Rs. 1,143,07,66,500/-. The CPP included setting up of fifteen steam/power generating units along with equipments, facilities and controls required to connect and distribute fuels, utilities, power, and steam, and connect various operating systems of the CPP, collectively referred to as the Balance of Plants ("BOP"). The 'Electrical Control System' ("ECS") was an integral component of such BOP. 3. The work to be executed was divided into three distinct Modules, to be completed within a specified time as set out in Clause 5 of the detailed Letter of Acceptance. The scope of work and schedule under different modules provided in Clause 5 is mentioned hereinbelow: Page 3 "5.0 TIME SCHEDULE Module – 1 : 27 (Twenty Seven) Months upto Commissioning Module – 2 : 29 (Twenty Nine)Months upto Commissioning Module – 3 : 30(Thirty) Months upto Mechanical Completion of the complete captive power plant (CPP) plus two months for commissioning of the complete CPP. Module-1,2 & 3 shall be as follows:  Module-1 : One UB + One STG + Balance of Plant (BOP)  Module-2 : One STG + 50% of GTGs & HRSGs (Min. 2 nos. each, in case 50% is a number in decimals, then the next whole number shall be considered i.e. 2.5 shall mean 3)  Module-3 : Complete Captive Power Plant including all associated facilities as per the provisions of the Bidding Document. The Time Schedule shall be reckoned from the date of Fax of Acceptance i.e. 31.08.2006." 4. The aforesaid Letter of Acceptance also mentions the price adjustment to be made/weightage to be given to each Module in cases of delay as below: "8.0 PRICE DISCOUNT DUE TO DELAY In case of delay, Owner shall be entitled to a discount as specified vide clause 4.4.0.0 of GCC including its modifications in the Amendment(s). Page 4 Price Adjustment as per provisions of this