Arbitrator: Good afternoon.
This arbitration proceeding pertains to case number 2022/ARB-
1234, involving a dispute between XYZ Constructions Pvt. Ltd., the Claimant, and ABC
Property Management Ltd., the Respondent. I, Mr. Robin Ratnakar David, have been appointed
as the Sole Arbitrator in this case under the Indian Council of Arbitration rules.
Before we proceed with the final award, I’d like each party to summarize their position.
Claimant, let’s start with you.
Claimant’s Counsel: Good afternoon, Arbitrator. Thank you for this opportunity to present our
case. I represent XYZ Constructions Pvt. Ltd., the Claimant. Our claim arises from a contractual
arrangement under which our client was engaged by ABC Property Management Ltd. for certain
exterior painting, waterproofing, and civil repair works at the Parsvnath Green Ville residential
complex in Gurugram. The scope of this engagement was defined in Purchase Order No.
GVWA/PO/CI/03, dated November 16, 2016.
During the project, unforeseen site conditions and additional requirements arose, necessitating
changes to the agreed scope of work. These changes were communicated by the Respondent’s
representatives, and our client acted in good faith to complete the additional work to ensure
project success.
Arbitrator: What sort of additional work are we talking about here?
Claimant’s Counsel: The additional tasks involved critical repairs and modifications requested
on-site, including urgent waterproofing and structural corrections, which were necessary for the
project’s timely completion.
Respondent’s Counsel (interrupting): If I may, Arbitrator, the Respondent disputes these
claims. Any additional work should have been authorized through formal variation orders, which
were neither sought by the Claimant nor approved by our representatives.
Arbitrator: Claimant’s Counsel, what’s your response to this concern about formal approvals?
Claimant’s Counsel: While formal variation orders were not issued, the urgency of the situation
necessitated immediate action. The instructions were conveyed verbally by the Respondent’s on-
site representatives and confirmed through emails. Given the critical nature of the work, our
client relied on these communications in good faith.
Respondent’s Counsel: Arbitrator, verbal instructions or informal emails do not meet the
standard approval process defined in the contract. The Claimant proceeded at their own risk.
Arbitrator: Claimant, how have you accounted for this additional work?
Claimant’s Counsel: To account for the additional work, our client issued two invoices:
1. The first invoice, dated June 28, 2017, for a portion of the work completed at that time.
2. The second invoice, dated September 15, 2018, for the remaining work.
The total outstanding payment across these invoices is INR 3,844,950. Despite repeated verbal
reminders, follow-up emails, and a legal notice issued on March 3, 2021, the Respondent has
failed to settle these invoices.
Arbitrator: Respondent’s Counsel, do you have any record of formally rejecting these invoices?
Respondent’s Counsel: No formal rejection was issued, Arbitrator, because the invoices were
not compliant with the payment terms or documentation requirements specified in the original
contract. Our records do not show acknowledgment of these invoices by authorized personnel.
Claimant’s Counsel: Arbitrator, this response reflects the Respondent’s lack of diligence. The
additional work was urgent and unavoidable, and we have provided substantial evidence,
including:
Email correspondences.
Site inspection reports.
Testimonies from project staff.
These demonstrate the Respondent’s representatives explicitly instructing our client to proceed
with the work.
Arbitrator: Respondent, do you dispute the authenticity of these documents?
Respondent’s Counsel: We do not dispute the authenticity of the emails or reports. However,
we assert that they do not constitute formal approvals under the contractual terms.
Arbitrator: Claimant, please summarize the reliefs you are seeking.
Claimant’s Counsel: Thank you, Arbitrator. We respectfully request the tribunal to:
1. Direct the Respondent to pay INR 3,844,950 for the additional work completed.
2. Award interest at 12% per annum, calculated from September 15, 2018, to compensate
for the financial burden of delayed payment.
3. Reimburse our client for all arbitration costs and legal fees incurred due to the
Respondent’s failure to fulfill their obligations.
Arbitrator: Respondent, do you have any final comments on these claims?
Respondent’s Counsel: Yes, Arbitrator. The Claimant’s claims are unsupported by formal
approvals or proper documentation. While we respect their work, the lack of compliance with the
agreed process is a significant issue. We request the tribunal to dismiss these claims and grant
reimbursement of our legal costs incurred in defending this arbitration.
Arbitrator: Thank you. Based on the evidence and arguments presented, I am ready to render
the award. After reviewing the submissions, I determine as follows:
1. Liability for Payment:
The Claimant has demonstrated that additional work was performed beyond the original
contract, and the Respondent benefited directly from this work. I direct the Respondent to
pay INR 3,844,950 to the Claimant.
2. Interest Rate Adjustment:
The Claimant requested interest at 12% per annum. However, given the informal nature
of the additional work arrangement, I find this rate excessive. I award interest at 10% per
annum from September 15, 2018, until the date of this award.
3. Legal Costs and Arbitration Fees:
Each party will bear its own legal costs due to shared responsibility for procedural
inefficiencies. The arbitration fees of INR 57,500 are to be split equally between the
parties.
This award is final and binding.
Claimant’s Counsel: Thank you, Arbitrator. We accept the tribunal’s decision and are prepared
to receive the awarded amount and interest from the Respondent.
Respondent’s Counsel: We respect the tribunal’s decision, Arbitrator. While we had hoped for
a different outcome, we will comply with the award.
Arbitrator: Thank you both. This session is adjourned.
