Dissenting or Minority Arbitral Award or Opinion is not an “Award”

Judgment dated 24.8.2023 of the Supreme Court of India.

Interesting issues – Minority or dissenting arbitral award of opinion is not an “award”

Interpretation on the mode of measurement of two items i.e. soil and pond ash used for cross sections of embankment should be “combined” or “separately”.

By the agreement dated 2.6.2004, the NHAI had awarded the construction of Allahabad by-pass project of a road.

There were two kinds of embankments – one with soil and another with fly ash & soil. Accordingly, the contractor quoted rates for these two kinds of embankment.

The material requirements were provided in Clauses 305.2.2.2 for soil and 305.2.2.3 for pond ash.  

The project was completed.  However, the disputes with reference to different areas of the contract were referred to arbitration.

According to the contractor – to consider whole of the embankment and determining volume by the average and area method.

According to the Engineer – area of cross section bifurcated to account for the area occupied by soil and pond ash for the determination of quantum of embankment in two different items.

 The award was passed on 30.3.2010. 

The majority opinion of the Arbitral Tribunal on “measurement aspects” was that “Clause 30.58 provides for measurement of the cross section of the embankment as one whole composite section…”

The learned Single Judge of the High Court upheld the majority award.

On appeal, the Division Bench set-aside the decision of the Single Bench and held that the majority view of Arbitral Tribunal on interpretation of contract was implausible.

The Supreme Court held that the judgment of the Division Bench is incorrect, upheld the decision of the Single Bench and the majority Award.  The Civil Appeals were allowed.

M/s. Hindustan Construction Company Ltd Vs. M/s National Highways Authority of India (Civil Appeal No.4658 of 2023 with connected matters)