Amit Rawal, J. - (1.) The appellants are aggrieved of the order dated 26.03.2014, whereby objections filed by the respondents against the arbitration award dated 22.08.2010 has been accepted and the award passed in their favour has been set aside.
(2.) It would be apt to give brief preface of the controversy leading to the lis/dispute to the Arbitrator. As per the agreement dated 21.03.2001, a contract for construction of underground power house, surge shaft, Pressure shaft, Part Head Race Tunnel including Adit -V, Switchyard and TRT (3 Nos. ) for Teesta Hydroelectric Project Stage -V in with NHPC was awarded to the appellant. The stipulated date of completion of work as per the contract was 21.09.2005 whereas, work had been completed on 21.01.2008. Since dispute arose between the parties during the execution of various components of agreed work and the contract envisage resolution of dispute through arbitration and the matter was referred to the Arbitrator. The basic claim before the Arbitrator was that additional cost, occasioned to the claimant in implementing the work was increase in the minimum wages due to the notifications promulgated by Government of Sikkim, has not been taken into account while tendering and the same has also not been compensated taking into consideration the price adjustment formulae contained as per Sub Clause (i) (ii) (iii) of Clause 70 of the Contract of Conditions of Particular Application (hereinafter to be called as "Contract of COPA") thus the claim of additional expenditure is liable to be paid as per sub -clause 70.8 of COPA. Various letters in this regard were sent for such additional cost but the request was rejected firstly on 16.02.2006 and finally on 12.01.2007. The aforementioned claim was contested by the respondent as noticed from the contents of the award. During the course of arbitration deliberations, number of other documents, statements Annexures and various judgments of High Court and Supreme Court were submitted by both the parties. The parties did not object to the procedure adopted by the Arbitrator Tribunal and were given ample opportunities. It would be apt to reproduce the Clause 70 dealing with the changes in cost and legislation of COPA: - - "Clause 70 Changes in Cost and Legislation Sub Clause 70.1 Price Adjustment The amounts payable to the Contractor, in various currencies pursuant to Sub -Clause 60.1, shall be adjusted in respect of the rise or fall in the cost of labour, Contractor's Equipment, Plant, material and other inputs to the Works, as specified in Appendix to Bid by applying to such, amounts the formulae prescribed in Sub -Clause 70.3 hereafter. Sub Clause 70.2 other Changes in Cost To the extent that full compensation for any rise or fall in costs to the Contractor is not covered by the provisions of this or other Clauses in the Contract, the unit rates and prices included in the Contract shall be deemed to include amounts to cover the contingency of such other rise or fall of costs. Sub Clause 70.3 Adjustment Formulae The adjustment to the Interim Payment Certificates in respect of changes in cost and legislation shall be determined from separate formulae for each of the currencies of payment and each of the types of construction work to be performed and Plant to be supplied. The formulae will be of the following general type: Pn: A+b.Ln/Lo+C. Mn/Mo+d.En/Eo+etc Where Pn is a price adjustment factor to be applied to the amount in each specific currency for the payment of the work carried out in the subject month, determined in accordance with Sub -Clause 60.1 (d) & with Sub Clauses 60.1(e) and (f) where such variation and Daywork are not otherwise subject to adjustment; A is a constant, to be proposed by the bidder as per Appendix to Bid, representing the non -adjustment portion in contractual payments; b, c, d, etc. are weightings or coefficients representing the estimated proportion of each cost element labour, materials, equipment usage, etc.) in the Works or Ss. thereof, net of Provisional Sums as specified in the Appendix to Bid; Ln, Mn, En, etc. are the current cost indices or reference prices of the cost elements in the specific currency for month 'n', determined pursuant to Sub -Clause 70.5, applicable to each cost element; and Lo, Mo, Eo, etc. are the base cost indices or reference prices corresponding to the above cost elements at the date specified in Sub -Clause 70.5. If a price adjustment factor is applied to payments made in a currency other than the currency of the source of the index for a particular indexed input, a correction factor Zo/Z will be applied to the respective component factor of Pn for the formula of the relevant currency. Zo is the number of units of currency of the country of index, equivalent to one unit of the currency of payment on the date of the base index, and Z is the corresponding number of such currency units on the date of the current index. Sub -Clause 70.4 Source of Indices and weightings The sources of indices shall be those listed in the Appendix to Bid, as approved by the Engineer. Indices shall be appropriate for their purpose and shall relate to the Contractor's proposed source of supply of inputs on the basis of which his Contract Price and expected foreign currency requirements shall have been computed. As the proposed basis for price adjustment, the Contractor shall have submitted with his bid the tabulation of weightings and Sources of Indices in the Appendix to Bid, which shall be subject to approval by the Engineer. Sub -Clause 70.5 Base, Current and Provisional Indices The base cost indices or prices shall be those prevailing on the day 28 days prior to the latest date for submission of bids. Current indices or prices shall be those prevailing on the day 28 days prior to the last day of the period to which a particular Interim Payment Certificate is related. If at any time the current indices are not available, provisional indices as determined by the Engineer will be used, subject to subsequent correction of the amounts paid to be Contractor when the current indices become available. Sub -Clause 70.6 Adjustment after Completion If the Contractor fails to complete the Works within the time for completion prescribed under Clause 43, adjustment of prices thereafter until the date of completion of the Works shall be made using either the indices or prices relating to the prescribed time for completion, or the current indices or prices, whichever is more favourable to the Employer, provided that if an extension of time is granted pursuant to Clause 44, the above provision shall apply only to adjustment made after the expiry of such extensions of time. Sub -Clause 70.7 Weightings The weighing for each of the factors of cost given in the Appendix to Bid shall be adjusted if, in the opinion of the Engineer, they have been rendered unreasonable, unbalanced or inapplicable as a result of varied or additional work already executed or instructed under Clause 51 or for any other reason. Sub -Clause 70.8 Subsequent Legislation If, after the date 28 days prior to the latest date for submission of bids for the Contract, there occur in the country in which the works are being or are to be executed changes to any National or State Statute, Ordinance, Decree or other Law or any other regulation or by -law of any local or other duty constituted authority, or the introduction of any such State, Statue, Ordinance, Decree, Law, Regulation or bylaw which causes additional or reduced cost to the Contractor, other than the preceding sub -Clauses of this clause, in the execution of the Contractor, such additional or reduced cost shall, after due consultation with the Employer and the Contractor, be determined by the Engineer and shall be added to or deducted form the Contract Price and the Engineer shall notify the Contractor accordingly, with a copy to the employer. Nothwithstanding the foregoing, such additional or reduced cost shall not be separately paid or credited if the same shall already have taken into account in the indexing or any inputs to the Price Adjustment Formulae in accordance with the Provisions of Sub Clauses 70.1 to 70.7."
(3.) Mr. Lovekesh Sahni, and Mr. Pankaj Gupta, learned counsel appearing on behalf of appellant -claimants submits that Clause 70.8 of COPA is not restrictive in nature rather is of wide amplitude, as it envisages the reimbursement to the Contract in respect of expenditure incurred beyond what is covered by Clause 70.3, in essence, it does not debar the charging of the cost incurred because of statutory hike in the minimum wages under the Minimum Wages Act, 1948 and in this regard, language of Sub -Clause 70.8 is clear and unambiguous on account of the fact that same has not been incorporated in the Indexing of any inputs. The claimants sought reimbursement of such rise in minimum wages over and above the percentage rise in CPI (Cost Price Index) Numbers. Both the parties submitted their respective submissions vis   -vis the claim and non -entitling of the claim. The Arbitrator Tribunal after considering the aforementioned fact, framed five following issues: - - "i) Whether, under the facts and circumstances of the matter, the claim is barred by limitation as contended by the respondents. ii) Whether, the notifications fixing/revising the minimum wages amount to subsequent legislation attracting the provisions of Clause 70.8 of COPA. iii) If the answer to the issue No. ii supra is in the affirmative, whether the claimant's claim is tenable. iv) If the answer issue No. iii supra is in affirmative, as to what extent the claim is tenable. v) Other reliefs.";