National Highways Authority Of India vs KNR Constructions Ltd.

By way of this petition under Section 34 of the Arbitration and Conciliation Act, 1996 [hereinafter, “the Act”], the petitioner – National Highways Authority of India [hereinafter, “NHAI”], assails an arbitral award dated 08.12.2021, by which a three-member arbitral tribunal has adjudicated a dispute arising out of a contract dated 22.10.2009, wherein the respondent – M/s. KNR Constructions Limited [hereinafter, “KNR”] was awarded “Balance works of Widening to 4/6-Lanes and Strengthening of Existing 2- Lane Carriageway of NH-5 in the State of Orissa from Km 284.000 to Km 338.000 (Ganjam-Sunakhala) (Project Chainage from Km 284.000 to 340.006)” [hereinafter, “the Agreement”].

This is the second round of proceedings between the parties, arising out of arbitral proceedings under the Agreement. Arbitral proceedings were earlier commenced by KNR on 08.07.2013, and resulted in an Award dated 29.04.2017, which was substantially in its favour [hereinafter, “the 2017 Award”]. However, the Award was challenged by both parties. NHAI’s challenge^{11.O.M.P.(COMM) 396/2017.} was dismissed by an order of this Court dated 25.10.2018. The said order was unsuccessfully assailed by NHAI before the Supreme Court^{22.SLP (C) Diary No. 12360/2019, decided on 03.07.2019.}. The 2017 Award was also challenged by KNR^{33.O.M.P.(COMM) 295/2017.}, to the extent that the Arbitral Tribunal had denied pre-reference interest on the awarded amount of price adjustment, and also with regard to the rate of interest awarded for the pendente lite and post-award period. KNR’s challenge was successful, and the Award, to the aforesaid extent, was set aside by an order of this Court dated 03.05.2019. It was left open to the parties to re-agitate their claims or counterclaims by way of appropriate proceedings. The impugned Award dated 08.12.2021 has been rendered pursuant to that process.

In the first round of arbitral proceedings, the Arbitral Tribunal was constituted by nominees of each of the parties, who will be referred to in this judgment as “Arbitrator A” [nominee of KNR] and “Arbitrator B” [nominee of NHAI]. They nominated a Presiding Arbitrator, who will be referred to as “Arbitrator C”. The dispute pertained to payment of price adjustment on all items of the Bill of Quantities [hereinafter, “BOQ”], and interest thereon. A majority of the Tribunal, comprising Arbitrators A and C, awarded a sum of Rs. 35,39,67,728/- in favour of KNR. Interest was awarded on delayed payments from 03.08.2013, being the date of filing of the Statement of Claim, at the rate of 10% per annum, till the date of the Award, and further at the same rate from the date of the Award till the date of payment. Arbitrator B delivered a dissenting opinion, dismissing KNR’s claims.

As noted above, challenges by both parties culminated in partial setting aside of the 2017 Award, at the instance of KNR, only on the question of denial of interest for the pre-reference period and the rate of interest for the post-reference period.

Pursuant to liberty granted by the order of this court dated 03.05.2019, KNR’s plea relating to interest was again adjudicated by a Tribunal of three arbitrators. Arbitrators B and C were common to both proceedings. Arbitrator A, however, recused himself by letter dated 06.02.2020 citing “personal problems and pre-occupation”, and KNR nominated a new arbitrator, hereinafter referred to as “Arbitrator D”.

By the Award dated 08.12.2021, impugned in this petition, the Tribunal held in favour of KNR, relying upon Clause 60.8 of the Conditions of Particular Application [hereinafter, “COPA”]. It was held that KNR was entitled to interest at the rate of 10% per annum compounded monthly, on the amount of price adjustment awarded, such interest also being payable for the pre-reference period, i.e., from the date on which the amount should actually have been paid, until the date of actual payment. The impugned Award was also rendered by majority, this time consisting of Arbitrators C and D. Arbitrator B dissented.

I have heard Mr. Manish K. Bishnoi, learned counsel for NHAI, and Ms. Kiran Suri, learned Senior Counsel for KNR.

The challenge was argued on two broad grounds – the first relating to the jurisdiction of the arbitral tribunal comprising arbitrators B, C, and D, and the second relating to the merits of the award. Each of these aspects is taken up in turn below, including reference to the arguments of learned counsel, and the authorities cited by them.

As the impugned Award is confined to the question of interest, it is not necessary to enter into the factual position with regard to the substantive dispute, in detail. Only two clauses of the contract are relevant for the present purposes, being the clauses relating to interest and to arbitration.

Clause 60 of COPA deals with certificates and payment. Sub-clause 60.8 provides for time of payment and interest payable to the contractor. Clause 67 of COPA deals with settlement of disputes. Sub-clause 67.1 provides for a Disputes Review Board [hereinafter, “DRB”] and, if the recommendations of the DRB is unacceptable to either the employer or the contractor, then it provides for commencement of arbitration by notice to the other party. Sub-clause 67.3 contains detailed provisions with regard to the resulting arbitration. The relevant clauses are extracted hereinbelow:

The first contention requires adjudication of a fundamental argument, as to the validity of the second round of proceedings. Mr. Bishnoi contended that the entire procedure adopted by the Tribunal, after the order of this Court dated 03.05.2019, was fundamentally flawed in law. Relying upon Section 31 of the Act, he argued that the mandate of the first Arbitral Tribunal stood terminated as soon as the 2017 Award was passed on 29.04.2017. The present case, he submitted, neither fell within the scope of a rectification application under Section 33 of the Act, nor was the matter remanded to the Tribunal under Section 34(4) thereof. In these circumstances, Mr. Bishnoi submitted that, as a consequence of the liberty granted by the Court to re-agitate the matter, KNR could only have invoked arbitration anew under Clause 67 of COPA read with Section 21 of the Act.

In order to adjudicate this contention, the conduct of the arbitral proceedings, after the order of this Court dated 03.05.2019 in O.M.P. (COMM) 295/2017, must be noticed in some detail. Those facts are undisputed, and are as follows:

a. After the order dated 03.05.2019, KNR did not issue any fresh request for arbitration with regard to its claim for interest. Instead, it addressed an application dated 05.06.2019 to the earlier Arbitral Tribunal, comprising Arbitrators A, B, and C. The application referred to the aforesaid order of this Court and to “Recommencement of Arbitration Proceeding for pronouncement of award on account of interest pertaining the claim “payment towards price adjustment on all the BOQ items of work””. It requested the Tribunal to convene arbitral proceedings for oral deliberation of the aforesaid issue and to take appropriate action.

b. Arbitrator C addressed a communication dated 18.06.2019 to both parties and to the other Arbitrators, stating as follows:

c. On 22.06.2019, KNR once again requested that a date for arbitration be fixed.

d. A hearing was held before the said three Arbitrators on 10.07.2019, at which both parties were represented by counsel. The minutes record that the meeting was convened and was held “with the consent of all concerned”^{55.Emphasis supplied.}. The parties undertook to submit a “write-up” with regard to the claim under adjudication.

e. On 24.07.2019, KNR submitted a document to the Arbitral Tribunal titled “Re-agitation of Interest Claim”. It referred to various clauses of COPA – Clauses 60.1, 60.2, and 60.8 read with the Appendix to Bid, and judgments of this Court with regard to payment of interest under Clause 60.8 of COPA. It then formulated the relief sought in the following terms:

f. The said document was accompanied by a table computing the interest payable on Interim Payment Certificates [hereinafter, “IPCs”] Nos. 1 to 37 and the Final Payment Certificate dated 25.06.2015.

g. As NHAI failed to submit its response, by a communication dated 01.10.2019, Arbitrator C directed it to do so.

h. In view of NHAI’s continued failure, KNR, by a communication dated 24.01.2020, requested the Tribunal to hold further hearings.

j. NHAI, through its counsel, finally submitted a “Statement of Defence for and on behalf of the respondent to the fresh Claim No. 6 [Interest]” on 11.02.2020. The claim was contested on merits, but no dispute was raised with regard to the jurisdiction or the procedure of the Arbitral Tribunal. In fact, NHAI’s only challenge to maintainability was due to KNR’s failure to approach the Tribunal within the period of 30 days as contemplated by Section 33 of the Act.

k. By a letter dated 13.02.2020, Arbitrator C informed the parties that Arbitrator A had been replaced as KNR’s nominee by Arbitrator D, and that the Arbitral Tribunal “stands reconstituted”. The communication of KNR to this effect was also circulated, as was Arbitrator D’s declaration in terms of the Sixth Schedule to the Act. At this stage also, NHAI did not raise any objection.

l. KNR addressed a further letter dated 16.03.2020 to NHAI, in which it referred to an email dated 13.03.2020 addressed by Arbitrator B to the Chairman, NHAI. Arbitrator B expressed an opinion that the erstwhile Arbitral Tribunal was without any mandate to examine or re-examine any fresh claims, and sought a response towards resolution of this issue, as to whether the mandate of the erstwhile Tribunal stood revived. KNR specifically consented to the mandate of the Tribunal comprising Arbitrators B, C, and D in this regard.

m. KNR thereafter filed a rejoinder to the Statement of Defence on 01.06.2020.

n. A further meeting of the Arbitral Tribunal was held on 11.07.2020. In the minutes of the hearing dated 11.07.2020, a communication of Arbitrator B to Arbitrator C, dated 11.03.2020, has been extracted in full. Arbitrator B expressed his reservation about the mandate of the Arbitral Tribunal and opposed further hearings before resolving this basic issue. He contended that the mandate had been terminated in terms of Section 32 of the Act, after which re-examination of any fresh claim was beyond the mandate of the erstwhile Tribunal. The further observations of the Tribunal in the said minutes are of great relevance, and are reproduced below^{66.KNR is described as the “claimant”, and NHAI as the “respondent” in the below extract.}:

o. These minutes, as available on the record, were signed only by Arbitrator C. Arbitrator B objected to the aforesaid minutes by an email dated 17.07.2020. He suggested the following amendments to paragraphs 2.8 and 2.9 of the minutes dated 11.07.2020:

p. The next hearing was held on 22.07.2020, by which the aforesaid paragraphs of the earlier minutes were replaced with the paragraphs suggested by Arbitrator B. Parties were directed to make copies of the contract and previous pleadings available to all the Arbitrators, and further meetings were fixed with the consent of all the parties.

q. At this stage, on 01.08.2020, counsel for NHAI requested the Tribunal to adjourn its proposed sitting on 05.08.2020 to enable it to object to the recusal of Arbitrator A and to seek a direction that Arbitrator A must continue as an arbitrator. KNR, by communication dated 03.08.2020, objected to this request and urged the Tribunal to “continue with the proceedings of the AT^{99.Arbitral Tribunal.} to finalize the matter at the earliest”.

r. A meeting was, in fact, held on 05.08.2020, but was kept in abeyance due to the aforesaid request of NHAI.

s. On 24.09.2020, however, NHAI informed the Tribunal that it had decided not to pursue the above issue and requested the reconstituted Tribunal to take necessary action for further proceedings. On 22.02.2021, KNR submitted another document, updating its interest claim on account of a further period having lapsed.

t. Hearings were thereafter held, at which counsel for both parties made their submissions. No further objection was recorded at any stage with regard to the continuation of the proceedings.

u. The impugned Award was rendered on 08.12.2021.

Mr. Bishnoi argued that the entire procedure adopted by the Arbitral Tribunal was illegal and without jurisdiction. The decision of the Tribunal, that it was continuing with the old arbitral proceedings, as reflected in its minutes dated 11.07.2020 read with minutes dated 22.07.2020, was, according to him, without any basis in law. The substratum of the adjudicatory process being thus vitiated, learned counsel submitted that the impugned Award could also not stand scrutiny under Section 34 of the Act.

Mr. Bishnoi further contended that the question of consent or acquiescence did not arise, since the Tribunal had proceeded on the understanding that it was a continuation of the earlier Arbitral Tribunal, and not a newly constituted one. He also submitted that consent cannot validate proceedings which are inherently without jurisdiction, as in the present case. In support of this submission, Mr. Bishnoi cited judgments of the Supreme Court in Inder Sain Mittal v. Housing Board, Haryana and Others^{1010.(2002) 3 SCC 175 [hereinafter, “Inder Sain Mittal”].}, Srei Infrastructure Finance Ltd. v. Tuff Drilling Pvt. Ltd.^{1111.(2018) 11 SCC 470 [hereinafter, “Srei Infrastructure”].}, Lion Engineering Consultants v. State of Madhya Pradesh and Ors.^{1212.(2018) 16 SCC 758 [hereinafter, “Lion Engineering”].}, and Hindustan Zinc Ltd. v. Ajmer Vidyut Vitran Nigam Ltd.^{1313.(2019) 17 SCC 82 [hereinafter, “Hindustan Zinc”].}. He also referred to the judgment in Sweta Construction v. Chhattisgarh State Power Generation Co. Ltd.^{1414.(2024) 4 SCC 722 [hereinafter, “Sweta Construction”].}, which follows an earlier judgment in M.P. Rural Road Development Authority v. L.G. Chaudhary Engineers & Contractors^{1515.(2018) 10 SCC 826 [hereinafter, “L.G. Chaudhary”].}.

Mr. Bishnoi submitted that, in any event, even on facts, the proceedings before the reconstituted Tribunal could not be construed as independent proceedings. There was no exchange of pleadings before the new Tribunal, no filing of documents, no evidence – whether documentary or oral – was taken, issues were not framed, and the entire proceedings were, thereafter, irregular, and not in compliance with statutory provisions, particularly Sections 23 and 24 of the Act.

Ms. Suri, on the other hand, submitted that the facts detailed above clearly demonstrate that NHAI had acquiesced in the determination of this issue by the Arbitral Tribunal, as constituted with Arbitrators B and D as its Members, and Arbitrator C as the Presiding Arbitrator. She submitted that no objection on account of jurisdiction or procedure was raised by NHAI at any stage. Even after the issue was flagged by Arbitrator B, instead of raising an objection, NHAI expressly consented to the continuation of proceedings. Ms. Suri submitted that arbitral proceedings, being founded in the concept of consent to the submission of disputes before a mutually constituted tribunal, cannot be reopened at the instance of a party which did not file any objection under Section 16 of the Act. She places reliance on judgments of the Supreme Court in L.G. Chaudhary, Quippo Construction Equipment Ltd. v. Janardan Nirman Pvt. Ltd.^{1616.(2020) 18 SCC 277 [hereinafter, “Quippo Construction”].}, M.P. Housing and Infrastructure Development Board and Anr. v. K.P. Dwivedi,^{1717.(2022) 3 SCC 783 [hereinafter, “K.P. Dwivedi”].} Sweta Construction, and JMC Projects (India) Ltd. v. Madhya Pradesh^{1818.(2024) 4 SCC 729 [hereinafter, “JMC Projects”].}, in support of these contentions.

As evident from the above submissions, it is factually undisputed that, after the order dated 03.05.2019, KNR sought to “re-agitate” its interest claim before the Tribunal, which had rendered the 2017 Award. Its submission of a “write-up” also expressly proceeded on this basis. NHAI not only failed to object to this procedure, but expressly consented to it. This is especially clear from paragraphs 2.8 and 2.9 of the minutes of the hearing dated 11.07.2020, as corrected on 22.07.2020, both of which are extracted in paragraphs 6(n) and 6(o) hereinabove. It was also clearly conscious of the course it was adopting. The very issue of the Tribunal’s mandate had been raised by Arbitrator B, and recorded in the Tribunal’s minutes dated 11.07.2020 and 22.07.2020. It was in response to this, that both parties consented to the proceedings. In fact, the question of objecting to the constitution of the Tribunal was considered by NHAI, albeit in the context of the recusal of Arbitrator A, as reflected in the letter of Arbitrator C dated 02.08.2020, and the minutes of the meeting dated 05.08.2020. NHAI, however, decided not to pursue that line of objection. It is difficult to believe that NHAI applied its mind to the question of whether KNR’s nominee arbitrator should be permitted to recuse himself for personal reasons, but did not apply its mind to the much more obvious question which it now seeks to raise.

In this context, the judgments cited by Ms. Suri preclude an objection by NHAI at the Section 34 stage:

a. As far as the composition of the Tribunal is concerned, the Supreme Court held, in Quippo Construction, that statutory provisions relating to the composition of the arbitral tribunal are derogable. It follows therefrom that such objections can be waived.

b. The question before the Court in L.G. Chaudhary, was with regard to a special State Act of the State of Madhya Pradesh, namely, Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983 [hereinafter, “M.P.MAA”]. The Court took the view that the State Act would prevail over the Central Act – Arbitration and Conciliation Act, 1996, in view of Section 2(4) of the Central Act. It, therefore, held that pending proceedings before the arbitral tribunal would be transferred to the tribunal constituted under the M.P.MAA, but also observed as follows:

c. K.P. Dwivedi also considered the relationship between the Central Act and the M.P.MAA. Relying upon L.G. Chaudhary, a submission was raised that an award could not be annulled on the ground of jurisdiction, if no objection had been raised before the arbitrator. One of the parties sought to re-agitate the issue before the State Tribunal after the arbitral award had been made. This procedure was held to be impermissible, with the following observations:

d. In Sweta Construction, the Court followed L.G. Chaudhary, and further decided the case on its facts, as follows:

e. The aforesaid judgment in L.G. Chaudhary was also followed in JMC Projects.

As against this line of judgments, Mr. Bishnoi relied upon Lion Engineering, which also deals with the relationship between the M.P.MAA and the 1996 Act. He submitted that the Court in Lion Engineering, had specifically observed that a plea of jurisdiction could be taken in Section 34 proceedings, even in the absence of an application under Section 16 of the Act. It may be noted in this connection, that in Sweta Construction, the Court considered the earlier authorities, including L.G. Chaudhary and Lion Engineering, and observed as follows:

The matter has more recently been clarified, to an even greater extent, in Gayatri Project Limited v. Madhya Pradesh Road Development Corporation Limited^{2222.2025 SCC OnLine SC 1136 [hereinafter, “Gayatri Project”].}. The Court held therein, that L.G. Chaudhary and Lion Engineering are not contradictory to each other. It was specifically held that L.G. Chaudhary carves out an exception to the ratio of Lion Engineering to the extent that, when a plea of lack of jurisdiction was not taken before the arbitral tribunal, an award would not be annulled only on that ground. It was further held that Lion Engineering was confined to the question of whether an amendment of pleadings in a Section 34 petition could be permitted, and not to the extent that an award may be annulled solely on that ground. That issue has specifically been dealt with only in L.G. Chaudhary. The Court clarified that a plea of jurisdiction raised at the stage of Section 34 for the first time, cannot result in automatic annulment of the award, even in terms of the ratio of Lion Engineering. The Court in Gayatri Project, relied upon its earlier decisions in Union of India v. Pam Development (P) Ltd.^{2323.(2014) 11 SCC 366.}, Gas Authority of India Ltd. v. Keti Construction (I) Ltd.^{2424.(2007) 5 SCC 38.}, and AC Chokshi Share Broker (P) Ltd. v. Jatin Pratap Desai^{2525.2025 SCC OnLine SC 281.} to arrive at the following conclusion:

On a consideration of the aforesaid authorities, in light of the facts of this case and the conduct of NHAI in the subject arbitral proceedings, I am of the view that its challenge to the jurisdiction of the Tribunal must be rejected. Even if Lion Engineering permits such an objection at the Section 34 stage, later judgments restrict its applicability to questions of amendment of pleading, and require the Court to view the matter from the perspective of Section 4 of the Act, which permits waiver of derogable provisions. NHAI’s conduct in this case parallels the facts noticed by the Supreme Court in Sweta Construction and Gayatri Project, where the jurisdictional objections, raised for the first time, were considered and rejected. NHAI has also not sought to explain its failure to raise the objection before the Tribunal.

In the face of these direct authorities, I am unable to accept Mr. Bishnoi’s submission relying upon Inder Sain Mittal, Srei Infrastructure, and Hindustan Zinc, for the following reasons:

a. Inder Sain Mittal was a case under the Arbitration Act, 1940. Even there, the Court upheld the principle of acquiescence by participation in arbitral proceedings, but held that breach of a mandatory provision of law could be raised even at the stage of objections to an award. In the present case, however, no such mandatory provisions of law have been cited, so as to permit such a turnaround by NHAI.

b. In Hindustan Zinc, it was held that a question of inherent lack of jurisdiction could be raised for the first time in proceedings under Section 37 of the Act. The question arose in the context of Section 86(1)(f) of the Electricity Act, 2003, which provides for adjudication by the State Electricity Regulatory Commission upon disputes between licensees and generating companies, including the power to refer any dispute for arbitration. The Court held that the reference of a dispute between a licensee and a consumer did not fall within the scope of Section 86(1)(f), and that such a plea could have been raised in challenge proceedings. The question remains as to whether this objection is one of “inherent lack of jurisdiction”, as expressed in Hindustan Zinc^{2727.Paragraph 17.}. On this point also, I am of the view that NHAI’s contention cannot prevail.

c. Similarly, Srei Infrastructure did not concern this question of jurisdictional objection at all, but rather the applicability of Section 32(2)(c). It is in this context that the Court observed that termination of proceedings by making of an award under Section 33(1) contemplates termination of the mandate of the tribunal.

Upon a holistic consideration of these authorities, I have come to the conclusion that NHAI’s jurisdictional objection must fail for the reasons outlined above. A question certainly arises as to the legal nature of the proceedings taken before the Arbitral Tribunal, particularly in the light of Section 33(1) of the Act, and the judgment in Srei Infrastructure. The Tribunal was, in my view, quite wrong in arrogating to itself the power to continue the earlier proceedings, which had already been terminated by making of the 2017 Award. As a matter of law, Mr. Bishnoi is right in saying that the proceedings had come to an end; neither Section 33 nor 34(4) had been invoked, and the matter could not have been reopened as a continuation of the old proceedings. However, notwithstanding the Tribunal’s own determination to the contrary, I am of the view that the proceedings, as a matter of law, must be construed as a fresh arbitration instituted with the consent of both parties, before a tribunal also constituted by express consent. Such consent is manifest in the orders of the Tribunal dated 10.07.2019, 11.07.2020, and 22.07.2020, and the communications of NHAI recorded above.

The alternative course, suggested by Mr. Bishnoi, would permit a recalcitrant litigant to participate fully in an arbitration, express its consent unequivocally, and then wriggle out of the consequences of an award by raising jurisdictional objections belatedly. I hasten to add that, in my view, the objections raised by NHAI, if raised at the appropriate juncture and in the appropriate manner, may have been worthy of acceptance, but its conduct estops it from raising this contention at this stage.

Mr. Bishnoi’s argument that the procedure of the fresh arbitration had not been undertaken, inasmuch as no substantive pleadings were filed and no evidence taken, is also unmerited. The pleadings and documents filed before the erstwhile Arbitral Tribunal were available to the Tribunal in the present case also, as evidenced by minutes dated 11.07.2020. The particulars of the claim being adjudicated by the Tribunal, were clear from the order of this Court dated 03.05.2019 and KNR’s submission dated 24.07.2019. The proceedings concerned only a claim for interest, which was to be decided in terms of contractual clauses and admitted documents. NHAI’s “Statement of Defence” dated 11.02.2020 does not indicate any confusion with regard to the scope of the proceedings. NHAI could well have filed an objection raising these grounds or have filed further documents and pleadings if it was so inclined, but it chose not to do so.

The Tribunal, as also the parties, would have done well to pay greater attention to procedural provisions in the conduct of the proceedings, but the present case does not reveal a fundamental miscarriage, so as to vitiate the proceedings altogether. Reference, in this connection, may be made to Sections 18 and 19 of the Act, which vest the Tribunal with considerable latitude in procedural matters, subject to adherence to the fundamental principles of equality and natural justice. There is no suggestion that NHAI was subjected to any breach of such principles, and, on balance, I am of the view that the Award is not required to be set aside on this ground.

Ancillary to the argument with regard to the Tribunal’s jurisdiction, Mr. Bishnoi also submitted that, after the order of this Court dated 03.05.2019, no fresh declarations under Section 12 of the Act were given by Arbitrators B and C. Arbitrator D, who was substituted for Arbitrator A, did make a declaration, but Mr. Bishnoi submitted that, in order to constitute a valid fresh arbitration, such declarations would also have been required from Arbitrators B and C, particularly in view of the amendment to the Act in 2015^{2828.Arbitration and Conciliation (Amendment) Act, 2015.}. In this connection, he relied upon a judgment of the Division Bench in Ram Kumar and Another v. Shriram Transport Finance Co. Limited^{2929.2022 SCC OnLine Del 4268.}, to submit that the impugned Award is required to be set aside, as a result of this lapse.

I am not inclined to accept this submission, in the facts of the present case. While the manner in which the Tribunal proceeded has resulted in avoidable ambiguity as to the status of the proceedings, the fact is that Arbitrators B and C had both given their declarations under Section 12 of the Act in the first round of arbitral proceedings^{3030.Paragraph 1.05 of the 2017 Award.}. Arbitrator D has admittedly made his disclosure, at the stage he entered into the reference. NHAI participated in the entirety of the proceedings without demur. Whether non-disclosure may, in a given case, be fatal to an award, is not relevant to the present proceedings, as the concerned arbitrators had made declarations which were accepted by the parties, without protest. The fact that Arbitrators B and C had made those declarations in the earlier round of proceedings, and did not do so in the present proceedings, is evidently due to their erroneous presumption that the present proceedings were a continuation thereof. However, such a lapse does not, in my view, vitiate the proceedings altogether. It may also be noted that no such ground was raised by NHAI before the Tribunal, giving rise to an argument of waiver under Section 4 of the Act^{3131.Quippo Construction.}, and no such ground has been taken even in the present petition.

The jurisdictional objections to the impugned Award are, therefore, rejected.

By the impugned majority Award, the Tribunal has held that KNR was entitled to interest on the amounts awarded by the 2017 Award, at the rate of 10% per annum compounded monthly, from the date when the amount was payable until the date of actual payment. For this purpose, it relied upon Sub-Clause 60.8 of COPA.

Mr. Bishnoi’s first submission was that the award is vitiated by lack of pleadings and documents, as no formal pleadings or documents were invited, after the order of this Court dated 03.05.2019. I have dealt with this aspect in Section D above.

Mr. Bishnoi’s further submission was that NHAI had clearly argued before the Tribunal that Clause 60.8 of COPA was inapplicable to the claims agitated by KNR, as the price adjustments were not certified by the independent engineer. Consequently, no rate of interest was contractually provided, as far as these claims are concerned. According to Mr. Bishnoi, by holding to the contrary, that Clause 60.8 is applicable to all dues, the impugned Award is tantamount to rewriting of the contract. He drew my attention to paragraph 10 of the “Statement of Defence” dated 11.02.2020, filed by NHAI before the reconstituted Tribunal, which according to him remained unaddressed in the impugned Award.

Ms. Suri, in her response on this aspect, submitted that the Tribunal has proceeded on the basis of a plausible interpretation of Clause 60.8, with which the Court should decline interference under Section 34 of the Act. Matters of contractual interpretation are within the domain of the Arbitral Tribunal, and the Tribunal’s view cannot be substituted by the Court’s interpretation, unless it is manifestly arbitrary or perverse. She also relied upon the judgments of this Court in NHAI v. ITD Cementation India Limited^{3232.2009 SCC OnLine Del 2327 [hereinafter, “NHAI v. ITD – 2009”].} and NHAI v. ITD Cementation India Limited^{3333.2012 SCC OnLine Del 6210.} to submit that the Tribunal’s interpretation in the present case, did not fall within this narrow category. Ms. Suri further submitted that interest was, in any event, payable under Section 31(7)(a) of the Act, as held by the Supreme Court in Delhi Airport Metro Express Private Limited v. Delhi Metro Rail Corporation^{3434.2022 9 SCC 286.}.

The majority award deals with this aspect as follows:^{3535.KNR is described as the “claimant”, and NHAI as the “respondent” in the below extract.}

Having regard to the aforesaid observations in the impugned Award, I am inclined to agree with Ms. Suri, that the view taken by the Tribunal does not warrant judicial interference. The Tribunal has clearly held that Clause 60.8 of COPA applies to awarded sums of price adjustments in all IPCs^{3737.Impugned Award, paragraphs 5.15, 5.16 and 5.18.}. The interpretation of contractual provisions is a matter that falls within the province of the Arbitral Tribunal. The Courts, exercising jurisdiction under Section 34 of the Act, are precluded from interfering with the Tribunal’s interpretation or substituting their own interpretation for that of the Tribunal, except in the very narrow class of cases, in which they are compelled to return findings of perversity or manifest arbitrariness. Reference in this connection may be made to the recent judgment of the Supreme Court in Prakash Atlanta (JV) v. National Highways Authority of India^{3838.2026 SCC OnLine SC 98.}, wherein the Court observed as follows:

A similar view has also recently been expressed by a Division Bench of this Court in JSW Ispat Steel Limited v. Gas Authority of India Limited^{4444.2026 SCC OnLine 3924, paragraph 21.}.

I do not find the Tribunal’s interpretation in the present case to fall within the narrow exception outlined in these judgments. The view taken by the Tribunal is also consistent with the judgment of this Court in NHAI v. ITD – 2009, cited by Ms. Suri, which concerns the very same clause.

Mr. Bishnoi’s final argument, on merits, was that the award is vague and uncertain, as it has failed to quantify the amount or to ascertain the period for which the interest claim was being awarded. For this purpose, he relied upon the operative portion of the majority award, which reads as follows:

Learned counsel submitted that such a vague quantification was contrary to the judgment of the Division Bench in NHAI v. ITD Cementation India Limited^{4545.2007 SCC OnLine Del 1590.}.

On this aspect, Ms. Suri submitted that the aforesaid finding of the Tribunal was capable of quantification without any difficulty, as the amounts of price adjustment, and dates upon which the payment was to be made, had been clearly quantified in the 2017 Award. She also submitted that in paragraphs 4.49, 4.50, 5.1, and 5.2 of the 2017 Award, the Tribunal had already awarded interest on price adjustments upto the 34^th running bill of March 2013, as well as other interim payments pending to be released. This, thus, covers all interim payments including IPCs No. 35, 36, and 37, which form part of the impugned Award. This was specifically reiterated in the document dated 24.07.2019 filed by KNR, after the order of this Court dated 03.05.2019, and was not disputed in NHAI’s reply dated 11.02.2020. The claim was again included with proper quantification in an application under Section 23 of the Act, filed by KNR before the reconstituted Tribunal on 13.02.2020.

While I am of the view that the Tribunal ought to have undertaken the exercise of quantification, or atleast referenced the necessary documents from which the quantification could be ascertained, I do not consider it necessary to set aside the impugned award on this ground. The material cited by Ms. Suri, including the 2017 Award, and the documents and charts placed before the reconstituted tribunal, quantify the amounts with sufficient certainty for the computation to take place, consequent to the award. It may be noted that, pursuant to an order dated 18.07.2022 in these proceedings, NHAI itself has filed an affidavit dated 07.09.2022, computing the amounts payable under the Award. This suggests that, even according to NHAI, the amount was capable of computation on the basis of the impugned Award.

In view of the above, NHAI’s challenge to the impugned Award, on merits, is also rejected.

For the reasons aforesaid, I do not find any reason to interfere with the impugned majority Award dated 08.12.2021, in exercise of the jurisdiction under Section 34 of the Act.

The petition is, therefore, dismissed, but with no orders as to costs.

Pending application also stands disposed of.