Atlanta Infra Assets Limited v. National Highway Authority of India

15. Pursuant thereto, the present AT was constituted.

IMPUGNED AWARD

16. The Arbitral proceedings culminated in passing of the impugned majority Arbitral Award dated 16.11.2021 by Justice (Retd.) Manmohan Sarin and Er. Bharat Bhushan Gupta, with dissenting minority award passed by Er. V.S. Karandikar.

17. Thereafter, NHAI filed an application under Section 33 of the Act, seeking correction of the impugned Award to the extent of award qua Counter Claim No. 4. The application was dismissed by the AT vide correction award dated 07.01.2022. Thus, NHAI is challenging the impugned award read with the correction award to the extent of Counter Claim No. 4.

18. During the course of judicial proceedings for these petitions, a limited settlement was concluded between the parties which was duly recorded by this Court in its Order dated 02.12.2022. Therefore, the dispute only remains with regards to NHAI’s challenge to Counter Claim No. 4(c) and Atlanta’s challenge qua Claim Nos. 1 and 6.

SUBMISSIONS ON BEHALF OF ATLANTA Claim No. 1: Damages due to delay in handing over of land post provisional commercial operation date (PCOD) dated 22.09.2011 till 04.06.2019 and further continuing till the Commercial operation date (COD).

19. Dr. George, learned Counsel for Atlanta, submits that the AT has exceeded its jurisdiction by travelling beyond the express terms of the CA and has consequently rendered the impugned Award qua Claim No. 1, patently illegal and perverse.

20. The AT, despite acknowledging from a conjoint reading of Clause NO. 13.5.[2] and Schedule H of the CA, that the CA stipulated a period of 12 months for the purpose of handing over of additional right of way (“AROW”), proceeded to adopt a period of 18 months as the reasonable period without any reasons or evidentiary basis.

21. He also submits that these findings of the AT has resulted in substantial curtailment of the Atlanta’s entitlement under various component subheads of Claim No. 1.

22. This adoption of 18 months as a reasonable period, in substitution of 12 months is bereft of any reasoning and is without any evidence. The impugned Award is further vitiated by internal inconsistencies, as it fails to disclose any cogent rationale for the differential application of two distinct time periods at different places of the award dealing with separate claims. Even though the AT is empowered to interpret the terms of the contract but such contractual interpretation cannot be devoid of any reasons and if so done, the same would be violative of fundamental policy of Indian law.

23. The AT cannot render contradictory findings, nor it can alter contractual terms or create a new contract/term or act in derogation of terms of the contract as the same would vitiate the impugned Award for being patently illegal. Thus, the AT cannot unilaterally rewrite the terms of the contract acting in breach of fundamental principles of justice. Reliance in support of the said submissions is placed on Morgan Securities & Credits (P) Ltd. v. Samtel Display Systems Ltd.1, PSA Sical Terminals (P) Ltd. v. V.O. Chidambaranar Port Trust, Tuticorin & Ors.2, and Ssangyong Engg. & Construction Co. Ltd. v. NHAI[3].

24. It is also stated that for all the aforesaid reasons the findings pertaining to Claim Nos. 1(a), 1(b), l(b-a), l(b-b), 1(c), should be set aside while granting liberty to pursue the said claims afresh by way of fresh arbitration.

25. In the alternative, it is prayed that the impugned Award be modified to the extent of construing 18 months as 12 months, along with all other consequential modifications thereto. Reliance is placed on Gayatri Balasamy v. ISO Novasoft Technologies Ltd.[4] and Jagdish Kaur v. Jasbir Singh Sandhu & Ors.5. Claim No. 6: Interest and Cost of Arbitration.

26. At the outset, it is contended that the impugned Award stands vitiated inasmuch as the AT has awarded different rates of interest on Claims and Counter Claims, in disregard of the mutual agreement between the parties which was recorded in the meeting dated 24.02.2020 wherein the rate of interest was fixed at 12% p.a.

27. Dr. George, submits that while NHAI has been awarded interest at the rate of 12% p.a. on its Counter Claim No. 2, Atlanta has been granted interest at a lesser rate of 10% p.a. on its Claim No. 6. Therefore, it is an error apparent on the face of record and the findings qua Claim NO. 6 to the extent of interest deserves to be modified. Reliance is placed on Gayatri Balasamy (Supra) and Jagdish Kaur (Supra).

28. Reliance is also placed on Indian Hume Pipe Co. Ltd. v. State of Rajasthan[6], to submit that the grant of interest cannot operate differently between Claims and Counter Claims, both the claimant and respondent have to be treated equally. Counter Claim No. 4(c): Failure to carry out Bituminous Overlay work and application of tack coat. (Against the challenge of NHAI in O.M.P. (COMM) 243/2022).

29. Learned counsel for Atlanta, submits that the challenge of NHAI in O.M.P. (COMM) 243/2022 qua Counter Claim No. 4(c) is liable to be rejected as the AT has correctly dealt with this Counter Claim and awarded nominal damages by providing cogent reasoning and following settled position of law.

30. With regards to this Counter claim, the AT has rightly rejected the formula for computation of damages proposed by the IC on the ground that it would amount to rewriting of the contractual terms, and has instead proceeded strictly in accordance with the mechanism delineated in the CA.

31. He submits that NHAI has assailed the findings of the AT on the ground that damages under Clause No. 18.13(b) ought to have been calculated “for each day of default” but the same has been wrongly calculated. However, the same contention was raised before the AT under its Section 33 Application, which was rightly rejected by the AT vide order dated 07.01.2022 holding that the Counter Claim was premised on policy guidelines dated 05.02.2016, which were applicable to agreements executed in 2006 and 2007. Thus, only token damages were levied.

32. The AT has rightly awarded only token damage by observing the Counter Claim to be unsustainable as unilaterally issued policy guideline cannot bind the other party to the contract. The said policy cannot be retroactively applied to the agreement between the parties. Reliance is placed on Ssangyong Engg. & Construction Co. Ltd. (Supra).

33. Additionally, without prejudice to the aforesaid submissions, it was also submitted that the entire Counter claim No. 4(c) was per se unsustainable before the AT as it was not only based on mechanical invocation of contractual terms and inapplicable policy guidelines, but also the NHAI did not make any specific averments or demonstrated any actual loss suffered by the NHAI.

34. He also submits that liquidated damages cannot be awarded in absence of a clear demonstration of actual loss incurred. There remains an obligation not only to aver but also to prove actual loss incurred. Reliance is placed on National Council of Education Research & Training v. Murli Industries Ltd.[7] and Indian Oil Corporation Limited v. Standard Casting Pvt. Ltd.[8] SUBMISSIONS ON BEHALF OF NHAI

35. At the outset, Mr. Singh, learned counsel for NHAI, submits that Atlanta has assailed the majority award dated 16.11.2021 on incorrect understanding of Section 34 of the Act which allows interference with the Award only on limited grounds as enumerated therein. Claim No. 1

36. He further submits that in accordance with Schedule H of the CA, the NHAI was obliged to handover right of way within 12 months from the date of the CA i.e., 09.12.2005. However, due to unavailability of about 10% of the land, it was agreed between the parties that PCC would be issued for the executed work and for the remaining works a separate agreement (supplementary agreement) would be executed.

37. Consequently, for execution of the remainder work, a SA dated 22.09.2011 was executed between the parties stipulating a timeline of 120 days from the date of land availability for completion of remainder works. However, the SA did not prescribe any fixed timeline for handing over of the AROW.

38. The AT in order to ascertain the reasonable time for land handover, analysed the acquisition process in paragraph No. 60 of the Award and observed that, as there was no fixed timeline in the SA within which the land was required to be made available. In absence of any such stipulation concerning time, the AT proceeded to interpret reasonable time in view of the accompanying facts and circumstances. The AT relied on Hungerford Investment Trust Ltd. v. Haridas Mundhra[9] to substantiate its findings of reasonable time.

39. The AT in paragraph No. 71 of the impugned Award attributed the primary responsibility of delay to the respondent and in view of attendant circumstances 18 months from the date of SA was fixed as a reasonable time beyond which the breaching party was held to be responsible for delay. Claim No. 6

40. Mr. Singh, learned counsel, qua Claim No. 6 submits that rate and quantum of interest falls within the discretionary ambit of AT and no judicial interference is warranted with the same.

41. The AT while adjudicating Claim No. 6 has exercised proper discretion. In paragraph No. 129 of the Award, it duly noted and took into consideration the frequent claim amendments by Atlanta, thereby awarding pendente lite interest at the rate of 10% p.a. against the rate of 18% p.a. as claimed by Atlanta. The AT awarded no pre-reference interest and awarded cost of Arbitration as per actuals. Counter Claim No. 4(c)

42. Mr. Singh, learned counsel for NHAI, submits that the Award dated 16.11.2021 read with order dated 07.01.2022 is contrary to an express contractual Clause of the CA bearing Clause No. 18.13(b). The AT in paragraph No. 125 of the Award duly decided the Claim in accordance with the said Clause but omitted to multiply the relevant figure with 517 and arrived at an erroneous finding by not taking into consideration the factor of 517 days delay.

43. Although the AT took note of the letter dated 22.03.2018 issued by the IC stating the delay of 517 days attributable to Atlanta, the same has been overlooked by the AT in awarding this Claim and arriving at its findings without any rationale.

44. NHAI duly flagged the computational lapse vide an application filed under Section 33 of the Act but the AT erroneously justified the Award qua Counter Claim No. 4(c) adopting a fresh approach stating that only token damages were awarded based on the rationale established in paragraph Nos. 121 to 125. This justification however finds no support in the said paragraphs and in paragraph No. 125 specifically, the AT only dealt with the issue of Schedule of Rates prescribed by Public Work Department-Nagpur adopted by the NHAI as per Policy Guideline dated 05.02.2018, and completely ignored to multiply the amount with the number of days of delay.

45. Moreover, the order dated 07.01.2022 dismissing the application of NHAI is patently illegal as it is based on a new approach of token damages which was not even explained in paragraph No. 125 as to on what basis such damages were being awarded.

46. Reliance is placed on Gayatri Balasamy (Supra) to state that the aforesaid computational error can be corrected to award Rs. 4,57,87,588/- to NHAI by multiplying the already awarded amount by

517.

ANALYSIS AND FINDINGS

47. I have heard the learned counsels for the parties and perused the documents placed on record.

SCOPE OF INTERFERENCE UNDER SECTION 34 OF THE ACT

48. The scope of interference under Section 34 of the Act is now clearly established. The Court is not required to sit in appeal as an Appellate Court over the Award, and it can neither reappreciate the evidence nor reinterpret the terms of the contract, when the view already taken by the arbitrator is a probable and possible one. Judicial intervention with the Award is permissible only on limited and specific grounds, as encapsulated under Section 34 of the Act. The Court is not required/empowered to reappreciate evidence or substitute its own view with that of the Arbitral Tribunal. It is a settled position of law that Section 34 of the Act, embodies the principle of minimal judicial interference, thereby preserving the foundational precept of the Act, the finality and efficacy of Arbitral Awards. The Hon’ble Supreme Court has recently observed this scope of interference in the judgment of Consolidated Construction Consortium Ltd. v. Software Technology Parks of India10, the relevant paragraphs of which reads as under:

49. At the outset, Mr. Singh, learned counsel for the NHAI, states that the petition O.M.P. (COMM) 152/2022 is sans merit as the petitioner has failed to plead or establish any specific permissible ground under Section 34 of the Act. The Award is a detailed Award substantiated by the evidence available on record and the same does not suffer from any vices as enumerated under Section 34 of the Act warranting interference by this Court. The findings of the AT are plausible and therefore cannot be interfered with under the Section 34 jurisdiction.

50. With the above scope of Section 34 of the Act in mind, I shall now deal with the rival contentions. Claim No. 1: Damages due to delay in handing over of land post provisional commercial operation date (PCOD) dated 22.09.2011 till 04.06.2019 and further continuing till the Commercial operation date (COD).

51. The primary challenge of Atlanta qua Claim No. 1 can be essentially distilled into one core controversy i.e. the findings of the AT on the point of reasonable period to provide AROW under the SA dated 22.09.2011.

52. Atlanta has assailed the findings of the AT qua Claim No. 1 for being patently illegal on three fold grounds: i. The AT in its findings read Schedule H with Clause NO. 13.5.[2] of the CA to acknowledge the relevant period as 12 month, but proceeded to consider the reasonable period as 18 months without any evidentiary basis thereby rewriting the terms of the Contract. ii. There is no reasoning/rationale given by the AT in arriving at its finding of treating 18 months as the reasonable period. iii. There are inconsistencies in the award with respect to the differentiated application of reasonable period as 12 months and 18 months at different sections of the award.

53. Per Contra, NHAI contends that although the CA in its Schedule H originally stipulated 12 months from 09.12.2005 but when nearly 10% of the land was still unavailable, the PCC was issued for the executed works and a SA was executed with a stipulation to complete remaining works within 120 days from the date on which land became available, not prescribing any fixed timeline was a conscious alteration in the agreement.

54. In absence of any such definite period, the AT has duly and justifiably examined the attendant circumstances to determine/interpret a reasonable period for handing over of AROW. The view of the AT is supported by cogent reasoning.

55. Summarily, the core controversy revolves around the reasonable time within which the land was to be handed over, after which the works under the SA were to be executed within 120 days, in accordance with the relevant provision of the SA. The relevant provision of the SA reads as under: “As and when the land becomes available, the Concessionaire agrees to complete the work within 120 days. The delay in completion of such balance works effective from the date on which the land becomes available shall be dealt with as per the provision of the main Concession Agreement.” (Emphasis Supplied.)

56. The AT qua this finding of reasonable period has given its reasons and explanations in paragraph Nos. 60, 61 and 71 of the Award and the same read as under:

57. In paragraph No. 60, AT has outlined the sequential steps in land acquisition procedure under such contractual frameworks wherein the land availability is not a single step but a chain of events involved in the acquisition process, this discussion is important as it substantiates the decision of the AT to arrive at a reasonable period.

58. After identifying that the SA contained no express stipulation as to the time limit, the AT returned its findings in paragraph No. 61 by applying governing legal principles applicable in such a factual scenario. The AT proceeded to observe that the use of phrase “as and when land becomes available” does not permit an infinite and endless postponement of performance. The AT relied on Hungerford Investment Trust Ltd. (Supra) to support its findings that in absence of any prescribed time for performance of an obligation, the law implies determination of a reasonable time which is to be ascertained from the relevant facts and circumstances. From a perusal of the paragraph NO. 61 it is also clear that the stipulation of 12 months period in the CA was not discarded altogether but the same was expressly treated as a relevant clue for determining reasonableness under the altered contractual agreement. In this backdrop, I am of this view that the AT treated this 12 month period as a baseline indicator while interpreting the reasonable period with the help of other relevant facts and circumstances.

59. The important reasoning for the findings challenged under this Claim No. 1 is clear from a perusal of the paragraph No. 71 of the Award, wherein the AT read together in harmony not only the contractual framework but also the prevailing circumstances.

60. In this view, the fixation of reasonable period as 18 months under the stipulation “as and when land becomes available” cannot be said to be decided without reasons. The AT took into consideration the relevant contractual period of 12 months and viewed it in the context of the SA that deliberately excluded any such stipulation of a fixed time period, and examined the practical aspects of land acquisition and then factored in the surrounding circumstances to arrive at a finding of 18 months as a reasonable period. Thus, the view taken by the AT is a plausible view supported by sufficient reasons and not vitiated by any perversity or patent illegality.

61. The said findings does not amount to rewriting of the contract as the CA and the SA are different contracts governing different aspects of a same project, the contractual term of CA cannot be allowed to be imported in the SA. In absence of any specific contractual timeline in the SA, the AT has only exercised its statutory power to interpret a term of contract which is well within its jurisdiction. The same being interpretation of a term of a contract, cannot be revisited by this Court under Section 34 jurisdiction. The view of AT is both plausible and reasonable. Claim No. 6: Interest and Cost of Arbitration.

62. The Claim No. 6 is categorised into two sub-claims with Claim No. 6.[1] pertaining to the award of pendente lite interest and Claim No. 6.[2] pertaining to the cost of Arbitration, as claimed by Atlanta.

63. Atlanta under Claim No. 6.1, claimed pendente lite interest at the rate of 18%, which was awarded by the AT at the rate of 10% p.a. instead, and under Claim No. 6.2, the cost of Arbitration were also awarded to the tune of Rs. 1,96,11,906/-.

64. Atlanta has assailed the Award qua Claim No. 6 primarily on the ground that during the meeting dated 24.02.2020 the parties had already agreed to fix the rate of interest at 12% p.a. and that the AT cannot award two different rates of interest for the Claims and Counter Claims.

65. From a perusal of the record of the order sheet of the AT dated 24.02.2020, it is clear that there is no such omnibus/uniform rate of interest fixed for all Claims and Counter Claims during the hearing/meeting. The order records a specific and a limited settlement with interest rate of 12% only fixed and applied on the Claims and Counter Claims, which were settled amicably on that day and were duly recorded in the order of the AT. The order dated 24.02.2020, reads as under: BEFORE THE INDIAN COUNCIL OF ARBITRATION (Case No. AC-2118)

IN THE MATTER OF ARBITRATION: M/s Atlanta Infra Assets Limited...Claimant Vs. National Highways Authority of India, New Delhi...Respondent Order Sheet of the 27th hearing held on 24th February, 2020 at11:00 a.m. at Federation House, Tansen Marg, New Delhi PRESENT: ARBITRAL TRIBUNAL Mr. Justice Manmohan Sarin...Presiding Arbitrator Mr. Vilas Sridhar Karandikar...Ld. Arbitrator Mr. Bharat Bhushan Gupta...Ld. Arbitrator SECRETARIAT Ms. Lakshmi K P...Case Manager ON BEHALF OF THE CLAIMANT Dr. P.C. Markanda, Sr. Advocate Mr. Rajesh Markanda, Advocate Ms. Neihal Dogra, Advocate Mr. RajhooBbarot, MD, Atlanta Mr. Ulhass N. Bhole, Vice President ON BEHALF OF THE RESPONDENT Mr. Ramesh Kumar, Advocate Mr. Abhishek Gusain, Advocate Mr. V. P. Brahmankar, Project Director, NHAI, PIU Amravati PROCEEDINGS DT. 24.02.2020 The position with regard to counter claims of the respondent was reviewed and the positions taken by the parties in support and in opposition to the counter claims was revisited in particular with regard to counter claim NO. 5 and 7. COUNTER CLAIM NO. 5 The respondent claims Rs. 49,87,73,425/- cost of overlay of the Project Highway for the period 01.04.2014 to 31.05.2018. The claimant opposes the claim on the ground that they are carrying out the overlay work and hence, the respondent cannot claim the entire cost of the overlay.

COUNTER CLAIM NO. 7 The position as to certain factual aspects with regard to balance works in respect of Service roads (Counter claim no. 7) may be noted:

(i) The total Service Roads remaining to be completed 23.67 km as per original scope of work. (ii) 16.085 work completed as on 31.1.2020. (iii) 0.485 km completed between 01.08.2017 and 31.01.2020 leaving balance of 7.615 km.

(iv) The respondents have proposed descoping of 4.62 km.

to Headquarters which will leave 2.99 km which the respondent asked to carry out without insisting upon the minimum width of 7 meters and as per availability at site. As regards, Service Roads which is one of the component of this claim, parties after addressing submissions and reflecting thereon reached an understanding which is being recorded.

1. Out of the 23.67 km. of Service Roads, 15.[6] km. had been completed as on the date of invocation of arbitration as on 1st August, 2017. Some part of the Service Roads was done between August, 2017 and January, 2020 leaving a balance of 7.615 km. The NHAI has recommended descoping of 4.62 km. leaving a balance of 2.99 km or 3 km. approximately. It has been specifically agreed by the respondents that this length of service roads on which standard width of 7 meters is not available may be carried out on the width as available on the basis of approved drawings to be made available within 10 days from today. The claimants undertake to complete the work within 3 months of the drawings including all the related works as given under the heading remaining works. In this view of the matter, since the counter claim is based on, the estimated cost of balance work as per the punch list A and B, Claimant having agreed to carry out the remaining works as detailed below and as required by the respondent, the counter claim no. 7 does no longer survive. S.No. Completed Works Remaining Works

1. Highway lighting not required on service roads Clearance for Right of Way on entire Service Roads

2. Truck Lay- byes (6 Nos.) Road Signs, Road marking for balance service roads

3. Development of Major State Highway Junction at Km 18.120 Development of minor junctions wherever required on balance service roads not more than 3 in number

4. Curves of less than 1000-meter radius erection of Chevrons and W-Metal Beam Crash barriers Extension of pipes for hume pipe /box /slab culvert wherever required on balance service roads not more than 2 in number

5. Minor bridges ROW boundary pillars wherever required at every 50 meters as required on the entire length of

6. Filling trenches within ROW dug for mining murrum used for embankment construction

7. Safety measures like erection of solar blinkers, delineators, W- Metal, Beam Crash Barriers etc. on medium openings and junctions. The overall position with respect to the counter claims after discussion and attempted settlement is as under:- Counter Claim Particulars Amount Period Decision/settlement 1 Cost of Plantation and Maintenance of Avenue Plantation Rs. 4,32,94,105.00 (The said claim was reduced subsequently as noted in the signed notes of proceedings dt. to 22.01.2020 Rs. 1,20,39,397/being maintenance the charges from 01.04.2016 30.06.2018) 01.04.2016 to 31.05.2018 After threadbare discussion of all aspects parties agree that the said counter claim shall stand satisfied in case, the respondents receive or get a set off Rs. 50,00,000.00 in all. Further, the claimant shall maintain the plantation/avenue till 5th plantation October, 2026.

2 Opposite Party/Claimant's share of fees & expenses of IC (05.10.2011 to 31.03.2018) Rs. 3,18,67,767.00 05.10.2011 to 17.04.2018 Rs. 47,58,821.33 till 31.03.2019 plus interest @12% per annum w.e.f. 01.04.2019 as agreed by the Parties in line with the claimant's submission dt. 27.07.2019. The proportion as per letter dt. 27.07.2019 shall continue for sharing of IC Fee till completion of service roads. Thereafter, the claimant will reimburse 50% of the IC Fees as per the agreement.

3. Reimbursement of expenses for engaging two vehicles for inspection of the Project Highway Rs. 31,55,625.00 01.10.2015 to Rs. 21 lakhs inclusive of interest as per Order dt. 21.01.2020

4. Damages payable by the Opposite Party/Claimant for poor O&M of the Project Highway Rs. 5,87,85,296.00 21.09.2015 to To be adjudicated by the Tribunal including for delay in overlay.

5. Cost of overlay of the Project Highway Rs.49,87,73,425.00 01.04.2014 to 63% overlay work is completed by the Claimant and balance is to be completed by 31st May, 2020 and since no work is done by the Respondent, the counter claim does not survive. However, this is without prejudice to counter claim no. 4.

6. Recovery of cost of providing Police assistance for removal of encroachments Rs. 2,69,470.00 17.04.2014 to Rs. 1,54,673/- plus interest at 12% per annum from 17.04.2014

7. Cost of Balance Rs. 22.09.2011 In view of the work of Punch List 60,30,69,951.00 (Claim Amount: 27,35,30,000.00 + Interest Rs. 32,95,39,951.00) 31.05.2018 agreement reach between the parties for completion and the execution of the remaining works and the time period therefor as recorded in proceedings above.

8. Cost of Proceedings As per Actuals - To be adjudicated by the Tribunal

66. In this view, the contention of Atlanta that the AT in awarding 10% p.a. has acted in disregard of a mutual agreement between the parties is unfounded and misconceived. The limited scope of order dated 24.02.2020 cannot be allowed to be misinterpreted as a blanket predetermination/fixation of rate of interest for all pending Claims and Counter Claims.

67. Another contention of Atlanta that the AT has awarded different rates of interest for Claims and Counter Claims, is also misconceived as it is clear from the perusal of the order sheet dated 24.02.2020 that it was mutually agreed between the parties that a rate of 12% would apply qua Counter Claim Nos. 2 and 6 only. The same has also been recorded by the AT in paragraph No. 112 of the impugned Award, which reads as under: “Counterclaims raised by the Respondent

112. Respondent has raised 8 Counterclaims against the Claimant. The same have been tabulated at para 27 hereinabove. On reviewing the positions of the parties, Counterclaims No. 1, 2, 3, 5, 6 and 7 came to be settled and the agreement reached was recorded in the proceedings held on 24.02.2020 (Annexure-D) and the Order sheet signed by both parties as token of their acceptance of the same. The particulars of the Counterclaim, amounts claimed and settlement arrived at is tabulated hereunder for facility of reference:…”

68. Moreover, the AT in awarding pendente lite interest at the rate of 10% p.a. against the claimed rate of 18% p.a. has only exercised its statutory power and has not violated any terms of the contract to warrant interference with the same. It is no longer res integra that the AT is having wide scope of power to award interest under Section 31(7)(b) of the Act and once the AT has taken a view which is plausible, it cannot be substituted by the Court under Section 34 jurisdiction. The Hon’ble Supreme Court in its judgment Hyder Consulting (UK) Ltd. v. State of Orissa11, made the following observations:

70. It can be concluded that the discretion, whether to award interest by the Arbitral Tribunal under clause (a), is necessarily to be exercised as per the facts and circumstances of each case. The said discretion must be within the parameters of the statute and in accordance with the rule of law. Furthermore, the said clause states that the rate of interest, if such interest is awarded by the Arbitral Tribunal, must be as the said tribunal deems reasonable. It is settled law that discretion must always be exercised lawfully.”

69. I am of the view that the submission of NHAI holds merit and that the AT in paragraph No. 129 of the award of Claim No. 6.1, has taken a plausible view in not awarding the claimed 18% rate of interest. The AT in awarding interest at the rate of 10% p.a. duly considered the frequent amendments and also the prevailing rate of interest during the relevant period. The view of AT is based on cogent reasoning and no interference is warranted with the same. The relevant paragraphs of the impugned Award reads as under: “Claim No. 6.1: Claim for Interest

127. Claimant demands pendente lite interest @ 18 p.a. on the sums due and future interest @ 18% compounded monthly from due date of payment to date of payment.

128. The Tribunal came to be constituted on 01.08.2018. Claimant filed its first Statement of Claim with the ICA on 03.10.2017 raising claims in the sum of INR 90.78 crores, which was amended and the sum claimed revised to INR

124.12 crores on 22.08.2018. Subsequently, Claimant filed an updated calculation for Claims No. 1 and 2, with the result that the total sum claimed stood revised to INR 1,44,74,85,212/-.

129. The amounts claimed have been subject to frequent amendment and have come to be crystallised only by this Award. In these circumstances, and keeping in mind the average bank lending rate for the relevant period, it would be apposite to award pendente lite interest from date of constitution of the Tribunal i.e. 01.08.2018 till realization of the awarded amounts @ 10%p.a.

70. As regards the argument of Atlanta for applying separate rates of interest on Claims and Counter Claims is concerned, the said argument is misconceived. On 24.02.2020, the parties agreed to the rates of interest for Counter Claim Nos. 2 and 6 only, the same is not an agreement of the parties qua the binding rate of interest for all Claims and Counter Claims. Hence, the AT was very much within its discretion to award interest at the rate of 10%.

71. Additionally, the AT has awarded cost of Arbitration based on the actual Arbitral fee deposited and assessed reasonable legal fee. The same is based on cogent reasoning and presents a plausible view. Learned Counsel for Atlanta has also not made any submissions specific to Claim No. 6(b). Thus, no interference with the same is warranted. Counter Claim No. 4(c): Failure to carry out Bituminous Overlay work and application of tack coat. (Challenged by NHAI in O.M.P. (COMM) 243/2022)

72. NHAI has challenged the Award qua Counter Claim No. 4(c) only to the extent that the awarded amount must be recomputed for the delay of 517 days by factoring in this delay and the amount awarded should be modified and read as Rs. 4,57,87,588 /- instead of Rs. 88,564/-.

73. NHAI had preferred an application under Section 33 of the Act before the AT, raising identical grounds as raised herein the present petition. Subsequently, the said application was dismissed by the AT vide correction Award/order dated 07.01.2022. The order dated 07.01.2022 reads as under:

74. The AT dismissed the Section 33 application vide order dated 07.01.2022, on the ground that the application instead of disclosing any arithmetical or clerical error, seeks merit based review of the AT’s decision and that the AT has levied token damages based on the rationale already noted in paragraph Nos. 121 to 125 of the Award. The said paragraphs of the impugned Award read as under: “Delay in submission of O&M Plan

121. Clause 18.13 of the CA provides that in case the Respondent does not exercise its option to undertake the required repair and maintenance after expiry of 30 days as stipulated in Clause 18.12, it shall recover damages from the Concessionaire, payable after the expiry of the aforesaid period of 30 days until the default is cured, as per subclause (a) and (b) which are reproduced hereunder: (a) Rs. 10,000/- (b) 0.1% of the cost of such repairs as estimated by the Independent Consultant.

122. Clause 18.12 clearly stipulates that the deviation/shortcoming in O&M should be qua the 'Maintenance Manual' and/or the 'Maintenance Programme' and not the 'O&M Plan'. No doubt that the Claimant was required to submit an annual O&M Plan under Clause 3.1(c), however, the O&M activities to be performed were set out in the O&M Manual ("Manual") which the Claimant supplied on 23.05.2011 (Annexure A-6, CD-8, pg. 92-188) and were to be controlled by the said Manual. A perusal of the Manual shows that it is exhaustive in detail with separate sections for Operations and Maintenance detailing the works to be carried out and responsibilities to be discharged by the Concessionaire-Claimant. That the Manual, as submitted, was a complete guide for execution of O&M works is evident from the complete absence of any letter or communication, between 2011 and 2014, from the Respondent requesting the Claimant to furnish an annual O&M Plan. This would imply that annual O&M plans were, by no means, indispensable or necessary, for carrying out O&M works, absence of which would impede performance. Respondent'simposition of INR 10,000/- per day for 341 days in respect of delay in submission of O&M Plan conveniently ignores condonation granted, as discussed hereinabove in para 120. Accordingly, the damages for nonsubmission of the O&M Plan are assessed at INR 2,80,000/computed for 28 days at the rate of INR 10,000/- per day and the said sum is awarded to the Respondent. Failure to carry out Benkelman Beam Deflection Test and Road Roughness Test

123. Respondent has levied these damages on the failure of the Claimant to carry out Road Roughness Test and Benkelman Beam Deflection (BBD) Test, as required and on the stipulated periodicity under the Concession Agreement. Respondent first brought this to the Claimant's notice in the meeting held on 03.01.2015 between the Claimant and IC, Minutes of which were enclosed with the IC's letter of 04.01.2015 (RD-13, R-548/39-44). Item 8 of the Minutes pertains to carrying out of Benkelman Beam Test (under Clause 3.4.2.[3] of Schedule-L) and Road Roughness Test and records the Claimant's assurance of acting on the same. Claimant conducted both these tests in July 2015 as can be seen from its letter dated 05.08.2015 (CD-10, pg.

259) [Roughness Index result sheets attached] and letter dated 14.08.2015 (CD-10, pg. 266) [Report on BBD Survey & Overlay Design attached). While it is true that the Respondent for almost a year did not raise the demand for conducting these tests. However, by its communication of 27.04.2016 (RD-14/34) Claimant was again directed to carry out tests followed by, after another gap of almost one year, letter dated 03.02.2017 (RD-16/74).

124. Provision of Clauses 3.4.2.[2] and 3.4.2.[3] mandate that road roughness value shall be measured at least twice in a year by a properly calibrated Bump Integrator device before and after monsoon and the structural condition of the flexible pavement of the Project Highway shall be assessed every year by taking Benkelman Beam Deflections, respectively. In view of the clear and categorical provision requiring the Roughness Test to be carriedout at least twice in a year. These are clear indications that the above is a minimum requirement and therefore, Dr.Markanda's submission that only when roughness index is found to be greater than 3000mm/km, are the clauses to be invoked and not on the basis of periodicity, is not tenable. It is not in dispute that the Claimant failed to carry out the roughness test at least twice and the BBD test, annually. Accordingly, in terms of the contractual provisions, the Respondent was justified in levying the damages as per its letter of 21.08.2017 (RD-16, pg. 75). Respondent claims to have assessed damages based on 'best industry practice', arriving at a figure of INR 6500/km for BBD Test and INR 7500/km for Road Roughness Test and imposing, in total, INR 8,72,632/-. Claimant has not placed on record anything to rebut the above or to indicate that the same is excessive or not in accordance with 'best industry practices'. Respondent is accordingly awarded INR. 8,72,632 on this account. Failure to carry out Bituminous Overlay Work

125. The last aspect to be dealt with is damages on account of failure to carry out Bituminous Overlay work. Calculation of damages is based on Policy Guidelines of 05.02.2018. We find that these Guidelines are inapplicable to the dispute before us as the Concession Agreement was executed on 09.12.2005 and the circular expressly states that it shall apply to agreements entered in 2006 and 2007. Moreover, the Policy Guidelines, purportedly seek to supply only a clarification, however, in our view it prescribes a new formula distinct from the one prescribed in 18.13(b). Accepting this new formula would amount to rewriting the contract, in as much as the same was not something both parties agreed to at the time of execution of the Concession Agreement. Further, the IC has taken the rates prescribed under the Scheduleof Rates of PWD, Nagpur despite comparable rates for similar works being prescribed in the BOQ. Item 4.03 under 'Bituminous Courses' prescribes a rate of INR 4131 / (m[3] ) for carrying out profile correction. Item 4.02 for emulsified tack coat was to be executed at INR 8 /m[2], which should be the rates at which damages should have been calculated as opposed to the price taken by the IC in its letter of 22.03.2018. Respondent's entitlement under this head is as follows:

1. Bituminous Concrete 2004[9].80 m[3] 4131/ m[3] 8,44,74,819

2. Application of tack coat 511245 m[2] 8/m[2] 40,89,960 Total 8,85,64,779 As per clause 18.13(b) the amount of damages would equal 0.1% of the cost of work done which comes to INR 88,564/- Accordingly, for Claimant's failure to submit O&M Plan, conduct Roughness and BBD Test and complete Bituminous overlay work, the Respondent is awarded INR 8,18,564/-, which is detailed as below:

┌──────────────────────────────────────────────────────────────────────────────────────────────────┐
│                                          Sl.No.            Item of Work         Amount Awarded   │
│                                                                                     (INR)        │
├──────────────────────────────────────────────────────────────────────────────────────────────────┤
│                                     1.             Delay in O&M Plan              2,80,000/-     │
│                                                    Submission                                    │
│                                     2.             Failure to carry out           8,72,632/-     │
│                                                    Benkelman             Beam                    │
│                                                    Deflection     Test    and                    │
│                                                    Road Roughness Test                           │
│                                     3.             Failure to carry out            88,564/-      │
│                                                    Bituminous       Overlay                      │
│                                                    and      Application    of                    │
│                                                    Tack Coat                                     │
│                                                    Total                          12,41,196/-    │
│                                     Accordingly, the Respondent is awarded a sum of INR          │
│                                     12,41,196/- (Rupees Twelve Lakh forty one thousand one       │
│                                     hundred ninety six only) against the Claimant.”              │
└──────────────────────────────────────────────────────────────────────────────────────────────────┘

75. The contentions of NHAI are based on the premise that the AT acted in deliberate ignorance of the number of days of delay stated in the letter by the IC and has not acted in accordance with the Clause No. 18.13 of the CA by not computing the damages for the total number of days of delay i.e. 517 days as computed by the IC. The Clause No. 18.13 is important and reads as under: “18.13 In the event NHAI does not exercise its option to undertake the required repair and maintenance after expiry of the 30 (thirty) days period stipulated in Clause 18.12 it shall recover Damages from the Concessionaire for default in operating and maintaining the Project Highway in conformity with this Agreement. Such Damages shall be payable after the aforesaid period of 30 (thirty) days and until the default is cured. The amount of Damages shall be calculated for each day of default at the higher of the following, namely (a) Rs.10,000 (Rs. Ten thousand), and (b) 0.[1] % (zero point one per cent) of the cost of such repair as estimated by the Independent Consultant. Recovery of such Damages shall be without prejudice to the rights of NHAI under this Agreement, including Termination thereof.”

76. It is also the case of NHAI that the AT has erred in dismissing the Section 33 application and justifying the award of Counter Claim NO. 4(c) by taking a new approach that the AT has only awarded token damages and stating it to be based on cogent reasoning contained in paragraph No. 121-125 of the Award.

77. Per Contra, Atlanta has defended the award of this Counter Claim NO. 4(c) by the AT on the ground that it is based on cogent reasoning and the AT has correctly awarded nominal damages. The AT has already adjudicated an application filed by the NHAI on the same grounds and held that the reasoning provided in the Award is sufficient and explains the award of token damages. Thus, the order dated 07.01.2022, clearly shows the manifest intent of the AT to award these damages as token damages. Additionally, as liquidated damages cannot be awarded in absence of clear averments and evidence as to actual loss, the Counter Claim being totally unsubstantiated and based on mechanical invocation has been rightly adjudicated by the AT to the extent of awarding only token damages.

78. Atlanta has also made these similar submissions before the AT, as can be seen from paragraph No. 88-90 of the reply dated 31.10.2018 filed by Atlanta to the said Counter Claim. The relevant paragraph of the reply reads as under:

79. In this view of the matter, it cannot be denied that Atlanta already disputed the Counter Claim on the basis of NHAI’s failure to aver and prove any actual damage as required for the award of damages by AT under Counter Claim No. 4(c).

80. The Award qua Counter Claim No. 4(c) is not a deviation from Clause No. 18.13, instead it is application of settled principles of law by the AT that the liquidated damages cannot be mechanically awarded in absence of any demonstrated actual loss. The AT in paragraph No. 121 to 125 categorically observed that the CA predated the policy guidelines dated 05.02.2016 and the calculations of IC are based on these inapplicable policy guidelines and PWD, Nagpur Schedule of rates, which is also not applicable to the CA. Thus, in this view the AT rejected the computations provided by the IC and took into account the submissions made by Atlanta.

81. The approach of AT is entirely consistent with the settled law on damages, which has been reaffirmed from time to time. It is no longer res integra that mere existence of a stipulation for liquidated damages will not entitle the party to the same without any proof of actual damages.

82. Recently, a Coordinate Bench of this Court in its judgment titled National Highways Authority Of India v. Patel Knr Heavy Infrastructure Pvt Ltd.12, while dealing with a similar Clause made the observations while dismissing the challenge of the petitioner therein to hold that arbitral tribunals interpretation that when there is no nexus between the stipulated amount and the actual loss likely suffered by the aggrieved party then the stipulation cannot be regarded as a genuine pre-estimate of damages. Thus, it is exclusively within the domain of the arbitral tribunal to decide the same. The relevant paragraphs of the judgment read as under:

83. Also, the Hon’ble Division Bench of this Court in its judgment titled National Highways Authority of India v. D.S. Toll Road (P) Ltd.13, while upholding the quantification of nominal damages by the arbitral tribunal made the observation that in a scenario where a party is entitled to compensation but is unable to prove the same, nominal damages can nonetheless be awarded. The relevant paragraph of the judgment reads as under: “36. The Arbitral Tribunal had accepted that DTRL was entitled to compensation for loss of opportunity and profits due to prolongation of the construction period. However, the Arbitral Tribunal did not accept DTRL's computation of the claimed amount of Rs. 9,06,45,316/-. The Arbitral Tribunal found that DTRL had not produced sufficient proof for establishing the quantum as claimed. Accordingly, the Tribunal awarded nominal damages. It is well-settled that where a party, which is entitled to compensation, is unable to establish the same, nominal damages can be awarded. It is also well-settled that nominal damages are not necessarily restricted to a token amount. In the present case, the Arbitral Tribunal had quantified the nominal damages to 1% of the amount as claimed. We are unable to accept that the impugned award in this regard is liable to be set aside in these proceedings.”

84. In the instant case as clear from the aforesaid paragraphs, Atlanta, from the outset has denied any breach on its part and challenged the mechanical invocation of Clause No. 18 on the ground that no actual damage has been suffered by the NHAI to claim damages.

85. It is clear in view of the aforesaid principles that it is exclusive domain of the AT to interpret any contractual clause and decide the quantum of claims, which cannot be interfered with by this Court in its Section 34 jurisdiction. The said Clause cannot be reinterpreted or the evidence cannot be reappreciated by this Court so as to exceed its jurisdiction and act as an appellate Court.

86. The findings of the AT qua Counter Claim No. 4(c) represents a plausible view which is supported by the settled position of law and falls within the domain or discretion of the AT. In this view of the matter, no ground warranting interference with the findings of the AT is established.

CONCLUSION

87. For all the aforesaid reasons, and having found no ground within the confines of Section 34 of the Act to set aside the reasoned findings of the Learned Arbitral Tribunal, I am of the view that the impugned Award read with the Correction Award/order does not suffer from perversity, patent illegality or any other recognised vice warranting interference.

88. Accordingly, the petitions are dismissed in the aforesaid terms, along with pending applications, if any.

JASMEET SINGH, J