S. Ravindra Bhat, J. - (1.) The National Highways Authority of India (NHAI) appeals under Section 37 of the Arbitration and Conciliation Act, 1996 ["the Act" hereafter] the decision of the learned Single Judge rejecting its objections under Section 34 of the Arbitration and Conciliation Act to an award made on 14.08.2017. It contends that the learned Single Judge fell into error in overlooking a salient but crucial illegality writ large on the face of the award, i.e. with respect to the directions to pay damages on account of loss of profit for the extended period of the contract.
(2.) Nhai is a statutory public body responsible for the building, development, maintenance and management of the National Highways entrusted to it under the provisions of National Highways Act, 1956 and the NHAI Act, 1988. The respondent (hereafter referred to variously as "the claimant" or "the contractor") is a joint venture company of M/s. AFCONS and APIL engaged in the business of construction and development of infrastructure projects; it was awarded the contract works pursuant to an open tender process. The total contract value was for Rs. 18 crores. The parties entered into a contract on 22.05.2001 for four laning of km 340 to km 404 of HaveriHubli Section of NH-4 in the State of Karnataka Contract Package-I. The salient features of the Project Contract were as under: JUDGEMENT_671_LAWS(DLH)5_2018_1.html JUDGEMENT_671_LAWS(DLH)5_2018_1.html
(3.) Considerable delays occurred in the execution of the project by the respondent due to various reasons. The scheduled date of completion of the project was 29.12.2003, whereas it was eventually completed on 29.02.2008, i.e. with a delay of about 62 months. Eight applications for grant of extension of time were made by the claimant to the Engineer were made in the meanwhile (as under the Contract, the Engineer was the appropriate authority to recommend Extension of Time in case of any delay). It is not in dispute that under the contract, the Engineer was empowered under Clause 28.1 read with Clause 44.2 to determine whether and by how much the intended completion date should be extended and by how much the contract price should be increased. Accordingly, the Engineer exercised its jurisdiction vested under the Project Contract and considered the EOT applications of the respondent and granted eight extensions on 04.05.2004, 25.07.2005, 27.03.2006, 12.09.2006, 27.11.2006, 13.06.2007, 07.09.2007 and 19.06.2008.;