Reliance is placed on National Building Construction Corporation v. Decor India Pvt. Ltd.(2004) SCC OnLine Del 243., wherein this Court held that “It is a settled law that where there is no escalation clause in the arbitration agreement, the arbitrator cannot assume jurisdiction to award an increased rate”. Thus, there is an apparent error in Arbitrator’s finding in this regard.
28. Once it was found that there was delay in execution of the Agreement due to the conduct of UOI. As a repercussion, they became liable for consequences of delay, on account of increase in prices even in the absence of any escalation clause. Food Corporation of India vs. A.M. Ahmed and Co. and Ors., AIR 2007 SC 82, K.N. Sathyapalan (dead) by LRs v. State of Kerala and Anr., (2007) 13 SCC 43., etc.
29. For extended period, the Arbitrator has relied upon Clause 10CC of GCC which provides the formula for calculation of price escalation. The challenge to Claim No. 5 is principally premised only on the Arbitrator’s interpretation of applicability of Clause 10CC. Even if Clause 10CC had a limited application and was only to apply for price variation only during the terms of the Agreement, mechanism therein could be adopted to calculate price escalation. In the aforesaid circumstances, the Arbitrator appears to have acted within his jurisdiction in allowing some of the claims on account of escalation. Further, the Arbitrator has excluded the component of overhead and profit and reduced the claim amount for a period of 12 months for which delay was apportioned against UOI. Therefore, the findings rendered to that effect are sustainable and cannot be disturbed in the present proceedings.
IN THE HIGH COURT OF DELHI AT NEW DELHI
O.M.P. (COMM) 44/2021
UNION OF INDIA Vs C AND C CONSTRUCTION LTD.
CORAM:
HON'BLE MR. JUSTICE SANJEEV NARULA
Author: SANJEEV NARULA, J.
Dated:28th October, 2021
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