K.J.SENGUPTA,J. - (1.) The instant appeal has been preferred against the judgment and order of the learned Single Judge dated 23rd June 2010 whereby and whereunder the appellant's application under section 34 of Arbitration and Conciliation, 1996(hereunder referred to as the said Act), has been rejected. The said application under section 34 of the said Act, was made challenging the award passed by the learned Sole Arbitrator dated 4th September 2009. The short fact leading to filing of this application is set out hereunder: The appellant above-named entered into a contract with one M/s. Ciaren Energy Pvt. Ltd, (hereinafter principal Contractor) for construction of a 79 meter diameter double deck floating roof crude oil storage tank at Ravva in the State of Andhra Pradesh., the said contract was awarded on 5th September 2000, however formal documentation was executed on 16th October 2000 (hereinafter principal Contract). Thence the appellant in its turn awarded to the respondent Simplex Infrastructure Ltd. a sub-contract for installation of granular pile foundation, tank pad and associated works. On negotiation between the parties the terms and conditions were finalized and incorporated in the minutes of meeting held on 19th September 2000. Following the same a Letter of Intent (LoI) was issued on 19th/21st September 2000. The said LoI provided total lump sum value of the contract would be 2,85,00,000/-. Shortly after issuance of the said LoI respondent was asked to start work, pending execution of formal work order which was issued on 18th February 2001. In the LoI it was stipulated that time of completion had been agreed as four months which may be extended by another 15 days.
(2.) Thereafter, the claimant/respondent completed the works of installation of the stone column including the initial testing. Thereafter final testing was done on 24th September 2001 preceded by routine testing done on 4th July 2001. On phase-wise completion of the works, from time to time bills were raised and payments were also made accordingly. However, at the time of final payment the appellant herein deducted a sum of Rs. 28,50,000/- on account of liquidated damages from the respondent's dues. Hence, disputes and difference arose between the parties at the time of final settlement of accounts between them. In terms of the agreement the appellant herein had appointed the learned Arbitrator for adjudication and resolution of the disputes between the parties. The parties herein filed their respective pleadings before the learned Arbitrator and made their respective claims therein. The respondent/claimant in its statement of claim claimed an aggregate sum of Rs. 83,90,662.00 on various heads of claims including the said deducted amount of Rs. 28,50,000/-. The claimant/respondent also claimed interest at the rate of 18 per cent per annum and the cost of the arbitration. In the counter-statement the appellant herein apart from defending and contesting the claims made by the respondent/claimant, had also made counter-claim aggregating to Rs. 5,30,33,900/-. The said claim was made on two counts, one of them is the amount of Rs. 3,50,00,000/- withheld by their principal employer in terms of the principal contract on account of damages imposed upon them because of loss of goodwill and reputation and loss of business.
(3.) The learned Arbitrator thereafter invited the parities to adduce evidence either by witness action or by filing documentary evidence. On receipt of the same the learned Arbitrator held as many as 60 sittings. After considering the claim and contention and rival claim and contention and taking into consideration the evidence adduced by the parties mutually and reading the terms and conditions of the contract and Loi awarded a sum of Rs. 5,77,9700 out of the claim of Rs. 83,90,662/- and the same was directed to be paid within 60 days from the date of award failing which the appellant herein had to pay interest at the rate of 12 per cent per annum from the date of the award on a sum of Rs. 34,80,000/- from the date of the award till date of payment or realization. The counter-claims put forward by the appellant herein was rejected as the learned Arbitrator has found that there was no foundation or basis for the respondent to make such claim. It was observed by the learned Arbitrator the said conter-claim was farfetched, vague and speculative. It appears from the records that almost at the end of arbitration sitting an application under section 16 of the said Act was made by the appellant herein contending that there exists no arbitration agreement and Arbitrator had no jurisdiction to proceed or to pass award. The learned Arbitrator rejected the said application holding that there has been valid arbitration agreement hence the said application under section 16 of the said Act was misconceived and afterthought.;