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Arbitral Award – Challenge in Section 34 petition of Railways negatived

June 27, 2025 legaldeli

By the Agreement dated 24.9.2018, the work of Railway line between Wardha and Nanded and other related works were given to the respondent for Rs.124.96 crores. The completion period was 24 months from 23.5.2020 of letter of acceptance and security deposit was Rs.6.24 crores. The performance bank guarantee of Rs.6.24 crores was valid till 23.7.2020.

The Railways paid Rs.124.95 crores as against Rs.147 crores for the works done by the respondent.

According to the contractor, everything changed after the appointment of a new Deputy Chief Engineer at Wardha in January 2021.

There was breakdown in the relationship after the refusal to release the eighth RA bill despite joint measurement, to pay approved seventh RA bill and denial of price of price variation.

The Railways called for fresh measurement despite earlier joint measurement. This was protested.

The Arbitral Award allowed the contractor claims as mentioned in para 14 of the judgment.

HELD that the view of the Arbitral Tribunal that there had been a clear understanding and that the Railways would benefit from unjust enrichment is an eminently plausible view. In my opinion, it would not be a view that is in conflict with Clause 41 of the GCC. Hence, the Arbitral Award for payment of eighth RA Bill, value of the restricted quantities, price variation claim, completion certificate, security deposit of Rs.6.24 crores, pre-award & post-award at 8% and 10% and arbitration costs of Rs.30 lakhs was upheld.

Judgment dated 24.6.2025 of the High Court of Bombay in Commercial Arbitration Petition No.51 of 2024 of Union of India through the General Manager, Central Railway Vs. PLR HC RBR JV with connected matter.

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