SINDHU KRISHNAKUMAR

23.06.2020 14:19

$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 10th January, 2020
Date of decision:23rd June 2020
+ OMP 680/2011 (New No. O.M.P. (COMM)392/2020) & I.A.
11671/2018

GAMMON INDIA LTD. & ANR. ..... Petitioners

Through: Dr. P. C. Markanda, Senior Advocate
with Mr. Chirag Shroff and Ms.
Neihal Dogra, Advocates. (M:
9811032077)
versus
NATIONAL HIGHWAYS AUTHORITY OF INDIA .... Respondent
Through: Ms. Padma Priya and Mr. Dhruv
Nayar, Advocates. (M: 9810026319)
CORAM:
JUSTICE PRATHIBA M. SINGH
JUDGMENT
Prathiba M. Singh, J.
1. Arbitration was to be the panacea for the woes of litigation. As an
`alternate dispute resolution’ mechanism, arbitration has however become
complex, owing to several reasons such as long delays, challenges in
enforcement, high costs etc., One other reason rendering arbitral processes
complex is `MULTIPLICITY’ – multiple invocations, multiple references,
multiple Arbitral Tribunals, multiple Awards and multiple challenges,
between the same parties, in respect of the same contract or the same series
of contracts. Repeated steps have been taken in judgments and by
amendments to the law, to make the system efficient, but more needs to be
done.

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 Brief Facts
2. In the present case, a contract was executed between Gammon-
Atlanta JV, a Joint Venture of Gammon India Ltd. and Atlanta Ltd.
(hereinafter “Contractor”) and National Highways Authority of India
(hereinafter “NHAI”) on 23rd December, 2000 for the work of widening to
4/6 lanes and strengthening of existing 2 lane carriageway of NH-5 in the
State of Orissa from km 387.700 to 414.000 (Khurda to Bhubaneswar)
Contract Pkg. OR-1 (hereinafter “Project”). The value of the work was
approximately Rs.118.9 crores. The date of commencement of the contract
was fixed as 15th January, 2001 and the project was to be executed within 36
months i.e., by 14th January, 2004.
3. The Project was not executed within the prescribed time. Extensions
for completing the Project were granted till 31st December, 2006. Vehicular
traffic was allowed on the main carriageway in March, 2007 and according
to the Contractor, this amounted to a deemed ‘taking over’ of the
carriageway by NHAI and hence completion.
Award No.1 – 5th October, 2007
4. During the course of execution of the Project, disputes had arisen
between the parties in respect of some claims. The same were raised both by
the Contractor and by NHAI. On 1st August, 2004, the Disputes Review
Board (hereinafter “DRB”) was constituted in terms of sub-clause 67.1 of
the Conditions of Particular Application (hereinafter, “COPA”). The DRB
is stated to have expressly communicated its inability to resolve issues
pertaining to a period earlier to its constitution. The DRB thus did not
resolve the issues and accordingly, the Contractor invoked arbitration under
sub-clause 67.3 of COPA vide notice dated 27th January, 2005. The relevant
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 claims referred for arbitration are as under:
“Claim 2.1: Compensation for losses incurred on
account of overhead and expected profit
Claim 2.2: Compensation for reduced productivity
of machinery and equipment deployed.
Claim 2.3: Revision of rates to cover for increase
of cost of materials and labour during extended
period over and above the relief available under
escalation (price adjustment) provision in the
agreement.”
5. The Arbitral Tribunal, consisting of Mr. P.B. Vijay, Mr. C.C.
Bhattacharya and Mr. R.T. Atre, was appointed and the award was rendered
on 5th October, 2007 (hereinafter “Award No.1”). The findings in Award
No.1 with respect to Claim Nos. 2.1, 2.2 & 2.3 are as under:
• Claim No.2 was found to not be barred by limitation as even though the
DRB was constituted on 1st August, 2004, it expressed its inability to
give its recommendation only on 17th November, 2004. Thus, the
limitation period of 56 days was considered to begin from 17 th
November, 2004, making the notice dated 27th January, 2005 within the
prescribed limitation period.
• The Contractor claimed compensation on the basis of the following six
alleged breaches by NHAI: (1) Late appointment of key personnel, (2)
Delay in payments, (3) Virtual suspension of BC work from December,
2003 to March, 2005, (4) Failure to sanction adequate extension of time,
(5) Failure to constitute Dispute Review Board and (6) Delay in handing
over of site.
• As regards the first five alleged breaches, the Arbitral Tribunal
(hereinafter, “AT”) found that the actions of NHAI either did not
materially affect the progress of the work, the Claimant’s preparedness
itself was inadequate or that alternate relief is available/has been availed
by the Contractor. It was therefore held that the Contractor did not
deserve any compensation on these grounds.

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 • As regards the sixth alleged breach, the AT concluded that the initial
work of the Contractor was affected by NHAI’s inability to fulfill its
obligations under Clause 42.01, however, once the hindrances were
removed, the Contractor was not able to accelerate the progress of the
work. The Contractor’s claim for compensation was therefore restricted
to the initial contract period during which time approximately Rs.37/-
crores worth of work is estimated to have been affected.
• With respect to Claim 2.1, since the Contractor’s deployment of
resources on overheads and their underutilization was admitted to the
extent of 14.28%, compensation of Rs.5.28/- cores (14.28/100 x 37) was
awarded to the Contractor. The claim for loss of profits was, however,
rejected on the ground that the Contractor is still executing the work and
will earn profit/loss commensurate with the work done.
• With respect to Claim 2.2, the AT held that though work worth Rs.37
crores was affected during the initial contract period, since the Contractor
itself was responsible for underutilization of machinery and equipment,
compensation of only 5% i.e., Rs. 1.85/- crores (5/100 x 37), could be
awarded.
• With respect to Claim 2.3, it was observed that this sub-claim had not
been mentioned in the list of claims included in the notice dated 27th
January, 2005 invoking arbitration, followed by letter dated 21st
February, 2005. Claim 2.3 was therefore considered outside the AT’s
terms of reference.

6. Thus, as per Award No.1, Claim Nos. 2.1 and 2.2 were allowed and
Claim No.2.3 was rejected on the ground that it was outside the terms of
reference.
7. Award No.1 was challenged by the Contractor and by NHAI in OMP
99/2008 and OMP 107/2008. In OMP 99/2008, the Contractor withdrew the
challenge in respect of Claim No. 2.3, which was rejected and sought liberty
to approach the 2nd Arbitral Tribunal. Vide order dated 13th March, 2009, the
same was permitted in the following terms:
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 “The petitioner seeks to withdraw the
challenge to the claim 2.3 with liberty to
agitate the same before the arbitrator. The
counsel for the respondent without prejudice
to the rights and contentions of the
respondent, to take pleas qua the said claim
before the arbitrator has no objection to the
amendment being allowed.
Accordingly, the application is allowed.
The grounds XVI and XVII raised with
regard to claim 2.3 and the prayer
paragraph also in relation to claim 2.3 is
allowed to be amended in the aforesaid
terms with liberty to the petitioner to pursue
the said claim before the Arbitral Tribunal
and without prejudice to the rights of the
respondent to take all pleas in opposition
thereto before the Arbitral Tribunal.”
8. Award No.1 was thereafter upheld by a ld. Single Judge of this Court
on 15th November, 2016. Two ld. Division Benches also upheld the award
vide judgments dated 18th January, 2017 and 20th February, 2017. Two
SLPs, being SLP (C) No. 17022/2017 and 22663/2017, were dismissed on
8th August, 2017 and 11th September, 2017 respectively. Thus, Award No. 1
attained finality.

Award No.2 – 21st February, 2011 (Impugned Award)

9. In 2007, the Contractor had invoked the jurisdiction of the DRB in

respect of payment of Tack Coat under bill of quantities (hereinafter,
“BOQ”) item No. 4.02 (b). The DRB rejected the said claim. Thus, the said
claim, along with certain other claims, were referred to the Arbitral Tribunal
consisting of three members, namely, Mr. Sarup Singh, Mr. C.C.
Bhattacharya and Justice E. Padmanabhan (Retd.). This Tribunal was
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 constituted on 2nd January, 2008. Claim 2.3 of Award No.1 was then filed
before this AT owing to the permission granted by the Court on 13th March
2009. Vide award dated 21st February, 2011 (hereinafter, “Award No.2”) by
a 2:1 majority, claims of the Contractor were rejected. The minority award
granted the claims of the Contractor.
10. The various claims referred to the second Arbitral Tribunal, which
rendered Award No.2, are as under:
“1. Compensation for losses incurred on account
of extra expenditure incurred on increased cost of
materials, labour, POL etc. for the balance work
executed beyond the stipulated date of completion
– Rs.1456.83 lacs (Claim 2.3 in AT 1)
2. Payment of tack coat - Rs. 49,17,00,822/-
3. Interest pendente lite and future @ 18% p.a.
of the award sum under claim No.1 and claim
No.2.
4. Cost of Arbitration proceedings.”
11. The findings of the majority award in respect of Claim No.1 are set
out herein-below:
• That claim no.1 is not barred by limitation. The finding of the Arbitral
Tribunal is as under:
“1.41 The claim was referred to DRB on
17.11.2004 (C-94). DRB could not make
recommendations within 56 days. The contractor
invoked the Arbitration clause on 25.1.2002 (C-
98) for certain claims including Claim No.2.3
(which is claim no.1 here). The first AT ruled that
the said claim was outside the reference made to
Tribunal. This observation/order is recorded in
the award dated 05-10-2007 (C-101). This claim
is for seeking compensation for losses incurred
on account of extra expenditure incurred on

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 increased cost of material, labour, POL etc.
beyond 14-01-2004. The contractor invoked
Arbitration clause on 25-1-2005, i.e. when the
work was still in progress. This period is well
within the provision of Article 137 of Limitation
Act. This Claim has not been adjudicated upon
by the 1st Tribunal.”
• On merits, the 2nd AT held that the delay of two weeks in the
appointment of the engineer and delay of five weeks, by the
NHAI, in intimating the Contractor, was a short delay and did not
affect the progress of the work.
• That there was a delay in providing a hindrance-free work site to
the Contractor by NHAI.
• The 2nd AT further analysed that the total value of the work was
approximately Rs.118.90 crores. Work worth Rs. 5031.43 lakhs
was carried out by January, 2004 i.e., the stipulated period for
completion of the contract. This constituted 42.3% of the work in
monetary terms. The balance work was 57.7%, for which a
hindrance-free site was already available. To execute this work,
the Contractor took 4 years. Thus, there was clearly a low level of
performance by the Contractor despite the site being available,
which is, in fact, recorded in minutes dated 15th June, 2004.
• Insofar as delay in payment was concerned, there were three bills
which were to be paid. Payments in respect thereof were released
on 15th October 2003, 16th December, 2003 and 6th March, 2004.
It was held that the delay in payment was very small and did not
cause hindrance in the work. It was further observed that in any

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 case, under clause 60.8, the Contractor was entitled to interest for
the delayed period.
• The ground taken that there was suspension of the entire BC work
due to delays by NHAI was rejected after a detailed factual
analysis of the Arbitral Tribunal. The Arbitral Tribunal also relied
upon Award No.1, which dealt with this very issue, to reject the
claim of the Contractor for compensation.
• Non-grant of time extension was not considered in Award No.2 as
the same was pending before the DRB.
• The 2nd AT held that there was no delay in constitution of the
DRB.
• In view of the above findings, the Arbitral Tribunal in Award No.2
considered Clause 70.3 and 70.2 of the contract. The said clauses
are extracted herein below:

“Sub- Clause 70.2: Other changes in cost

To the extent that full compensation for any rise or
fall in the costs to the Contractor is not covered by
the provisions of this or other clauses in the
Contract, the unit rates and prices included in the
Contract shall be deemed to include amounts to
cover the contingency of such other rise or fall in
cost.

Sub-Clause 70.3: Adjustment formula

The adjustment to the Interim Payment Certificates
in respect of changes in cost and legislation shall
be determined from the following formula:
Pn = A + b Ln + c Mn + d Fn + Bn
Lo Mo Fo B3
Where:

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 Pn is a price adjustment factor to be applied to the
amount for the payment of the work carried out in
the subject month, determined in accordance with
Sub-Clause 60.1(d), and with Sub-Clauses 60.1 (e)
and (f), where such variations and Daywork are
not otherwise subject to adjustment.
A = 0.50, b = 0.15, c = 0.25, d = 0.10
Ln. Mn. Fn. Etc., are the current cost indices or
reference prices of the cost elements in the specific
currency for month “n” determined pursuant to
Sub-Clause 70.5, applicable to each cost element:
and
Lo. Mo. Fo. Etc. are the base cost indices or
reference prices corresponding to the above cost
elements at the date specified in Sub-Clause 70.5.
The amounts, determined as payable to the
contractor as a price adjustment factor in a
currency or currencies other than the Indian
Rupee. Will be converted from Indian Rupees to
the currency or currencies of payment at the
exchange rate (s), as determined by the Reserve
Bank of India, on the date of current index and not
at the rate (s) established in the Appendix to Bid, if
any.”
• After analysing the two clauses, the Arbitral Tribunal arrived at
the following conclusion:
“1.49 Every contract for construction work has
some inbuilt uncertainties. Such uncertainties arise
during construction period due to lack of complete
and timely fulfilment of the obligations by the
claimant and the respondent towards the other
party. It leads to delay in the completion of work.
The financial effect of some of such uncertainties
cannot be truly quantified. Therefore it is
regulated by making certain provision/conditions
in the contract agreement.
1.50 The 1st AT has awarded Rs. 5.28 crores and
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 Rs. 1.85 crores towards claim 2.1 and claim
No.2.2 respectively. Apparently the provisions of
section 55 of Indian Contract Act, where ever
applicable, stand covered through the award order
passed by 1st AT.
1.51 With the provisions under clause 70.2 of the
contract agreement, statement of the witness CW-1
during cross examination does not provide any
support to the claimant.
1.52 The Arbitral Tribunal holds that under the
provisions of Sub Clause 70.2, this claim does not
succeed. Nothing more is admissible for payment
beyond the provisions of sub clause 70.3. Hence
amount awarded is Rs. Nil only.”
12. The present petition challenges Award No.2.

Award No.3 – 20th February, 2012

13. NHAI imposed liquidated damages on the Contractor for the delay
caused. Seven disputes were referred to the DRB on 24th March, 2008.
However, dissatisfied with the recommendations of the DRB, a third
arbitration was invoked by the Contractor vide letter dated 23rd December,
2008. The following claims were referred to the Arbitral Tribunal consisting
of Mr. RH Tadvi, Mr. V. Velayutham and Mr. V.S. Karandikar:
“1. Recovery of alleged Liquidated Damages
2. Recovery of Building and other construction
Workers Welfare Cess
3. Recovery of Alleged Penalty for not providing
vehicles to the Engineer
4. Premature recovery of discretionary advance
5. Interest on Discretionary Advance
6. Earthworks pertaining to Clearing and
Grubbing
7. Claim for payment of interest due to premature
deductions of secured
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 advance by the Respondent.
8. Interest pendente lite and future
9. Cost of Arbitration Proceeding”

14. Vide award dated 20th February, 2012 (hereinafter, “Award No.3”)
the Contractor’s claim for recovery of amounts paid as liquidated damages
was allowed. The findings in Award No.3 in respect of Claim No.1 are
summarised below:
• Claim 1: The Contractor was allowed a refund of the entire amount of
liquidated damages imposed. Refund was given on the ground that the
Contractor was entitled to a further extension of time and hence the
imposition of liquidated damages was illegal. It was observed that NHAI
could not impose liquidated damages on the Contractor when it had
failed to provide a hindrance-free site and had also taken over the road. It
was also found that in contravention of the contract, prior notice for
imposition of liquidated damages was not issued. Furthermore, since
certified payments to the Contractor were withheld, it was held that the
Contractor had the right to slow down the rate of work as per the terms of
the contract. The Contractor was also awarded interest @10% p.a.
compounded monthly for the payments withheld against the liquidated
damages. A declaratory award, prohibiting the imposition of further
liquidated damages, was also given.

15. Award No.3 has been upheld by a ld. Single Judge and a ld. Division
Bench of this Court. NHAI has paid the awarded sum and the award has
attained finality.

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 Procedural History of the Present Petition
16. The present petition was filed in August, 2011. Initially itself, it was
submitted by the Contractor that it does not press objections qua Claim No.2
i.e., payment of tack-coat. This was recorded in order dated 20th September,
2011 as under:
“Learned counsel for the petitioner, on
instructions, submits that the petitioner does not
press the objections to the award made on claim
No.2. Mr. Bansal also submits that another
arbitration proceeding in relation to levy of
liquidated damages under the same contract, by
the respondent, is pending disposal before another
tribunal. Arguments have been heard and the
award has been reserved in those proceedings.”

17. The petition was then dismissed for non-prosecution on 20th January,
2017. The same was, however, restored on 15th March, 2017. Vide order
dated 6th August, 2019, the counsel for the parties, on a query from the
Court, submitted as under:
“Dr. P. C. Markanda, ld. senior counsel for the
Petitioner submits that according to his client, the
indices were frozen as in the original contract
period. He relies on a few letters which have been
placed on record. Hence according to him, no
escalation was in fact paid.
On the other hand, ld. counsel for NHAI
submits that the escalation as per Clause 70.3 has
been paid to the Petitioner to the tune of
Rs.15,29,15,363/- up to the last IPC No.94.
In view of the Full Court Reference, further
hearing is deferred to 4th September, 2019.”

18. Thus, the only claim to be considered in this petition is Claim No.1,
wherein the case of the Contractor is that the revision of rates did not take
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 place and hence, the Contractor is entitled to additional amounts.

Submissions of Ld. Counsels

19. Mr. Markande, ld. Senior Counsel appearing for the Contractor, has
raised a two-fold argument. First, it is submitted that the finding in Award
No.3 that NHAI was responsible for the delay would bind the present
proceedings as well. Secondly, that even otherwise, the delay was clearly
caused by NHAI and the Contractor is entitled to escalation/compensation
for the losses due to the said delays. The submission is that there were
delays in the appointment of the engineer and handing over of the site and
delays caused due to non-payment of dues, placing of variation order which
had to be executed by the Contractor, non-grant of extension of time to the
Contractor and default/delay in constituting the DRB.
20. The findings of the Arbitral Tribunal in Award No.2 with respect to
Claim No.1 are that the consequences for uncertainties and delays during
construction work are fully provided for in the contract itself. Insofar as any
damages/compensation are concerned, which the Contractor may be entitled
to claim under Section 55 of the Indian Contract Act, 1872 (hereinafter,
“ICA”), the same were found to be covered by Award No.1 which awarded
Rs.5.28 crores and Rs.1.85 crores towards Claims 2.1 and 2.2 of the
Contractor. Submission of Mr. Markande, ld. Senior Counsel, is that the
claim has been confused by the Arbitral Tribunal as being an award under
Section 55 of the ICA whereas, in fact, Claim No.1 was not a claim under
Section 55.
21. It is further argued by Mr. Markande, that in Award No.3 there was a
clear finding that NHAI had caused a delay on various counts and hence, in

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 view of the finding in Award No.3, this claim ought to be automatically
allowed. Reliance is placed on the minority award of the 2nd AT to argue
that the minority award clearly distinguishes between compensation payable
under Section 55 and Section 73 of the ICA. He urges this Court to uphold
the minority award under which the Contractor has been awarded the
following sum:
“In the result there will be an Award in the
following terms:
I. The Respondent is directed to pay to the
Claimant the sum of Rs.49,17,00,822/- with
subsequent interest @ of 18% P.A. on
Rs.32,97,36,489/- from 22.10.2007 till date
of payment towards tack-coat work executed
falling under BOQ entry 4.02 (b).
II. The Claimant is entitled to the relief of
declaration declaring that the Claimant is
entitled to payment for the balance of work
falling under BOQ entry 4.02 (b) Tack-coat
as and when executed at the rate of
Rs.400/sq.m.
III. The Respondent is directed to pay
Rs.1456.83 Lakhs to the Claimant towards
loss incurred on account of extra
expenditure incurred on increased cost of
materials, labour, POL etc. with interest @
12% P.A from 01.02.2005 the date of claim
and till the date of payment.
IV. The relief of declaration prayed for as to
compensation for the future period and
balance of work executed during such
period is left open to be agitated in future.
And
V. Both the parties shall bear their respective
costs in the present proceedings
throughout.”

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 22. On the other hand, on behalf of NHAI, Ms. Padma Priya, ld. Counsel,
submits that Award No.2 is detailed. The Contractor had multiple
opportunities before the Arbitral Tribunal and has lost on both counts. The
minority award is of no consequence once the majority award has rejected
the claims of the Contractor. Ld. Counsel further submits that there was no
reason as to why this Claim was not included in the reference leading to
Award No.1. This claim according to her is barred. It is further submitted by
ld. Counsel that escalation has in fact been granted under Clause 70.3. She
further urges that the findings by the DRB, 1 st AT and the 2nd AT are
consistent and thus the petition is liable to be dismissed.

Analysis and Findings

23. The chronology of facts set out above shows that the parties had
appointed three Arbitral Tribunals which adjudicated different disputes and
claims. There were three Awards. Award No.1 and 3 have attained finality.
In this petition, the challenge is to Award No.2. The Contractor’s
submission is that the findings in Award no.3 be relied upon, for setting
aside Award no.2. The question that arises is whether it is permissible for
the Contractor to jettison the findings in Award No.3 to argue that Award
No.2 ought to be set aside and the claims of the Contractor ought to be
allowed. Before going into the challenge to Award no.2, the legal position
on multiple arbitrations and multiple awards needs to be analysed.
24. A perusal of the provisions of the Arbitration and Conciliation Act,
1996 shows that the statute envisages that disputes can be raised at different
stages and there can be multiple arbitrations in respect of a single contract.

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 By way of illustration, Section 7(1), Section 8(3) and Section 21, can be
seen, which read:
“7. Arbitration agreement. – (1) In this Part,
“arbitration agreement” means an agreement by
the parties to submit to arbitration all or certain
disputes which have arisen or which may arise
between them in respect of a defined legal
relationship, whether contractual or not.

8. Power to refer parties to arbitration where

there is an arbitration agreement –

(3) Notwithstanding that an application has been

made under sub-section (1) and that the issue is
pending before the judicial authority, an
arbitration may be commenced or continued and
an arbitral award made.

21. Commencement of arbitral proceedings. –

Unless otherwise agreed by the parties, the
arbitral proceedings in respect of a particular
dispute commence on the date on which a request
for that dispute to be referred to arbitration is
received by the respondent.”
Under Sec. 7 the agreement to arbitrate could be for `all or certain disputes
which have arisen or which may arise’. Under Sec.8 if a particular
proceeding is pending in court and there is a lis as whether a particular
dispute is arbitrable, for other disputes, arbitration can be commenced or
continued and even the award can be made. This means that, if the court,
thereafter comes to the conclusion that the dispute is arbitrable, after the first
reference is either pending or concluded, a second reference can be made.
The commencement of proceedings under Section 21 is to be construed in
respect of a particular dispute. Thus, if there are multiple disputes which
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 have been raised at different times, the commencement of proceedings
would be different qua each of the disputes. All these provisions show that
there can be multiple claims and multiple references at multiple stages.
25. Filing of different claims at different stages of a contract or a project
is thus permissible in law, inasmuch as the contract can be of a long duration
and the parties may wish to seek adjudication of certain disputes, as and
when they arise. Despite this permissibility, multiplicity ought to be avoided
as discussed hereinafter.
26. The endeavour of Courts in the domain of civil litigation is always to
ensure that claims of parties are adjudicated together, or if they involve
overlapping issues, the subsequent suit is stayed until the decision in the first
suit. It is with the intention of avoiding multiplicity that the principles
enshrined in Order 2 Rule 2 CPC, Section 10 CPC and Res Judicata are part
of the Code of Civil Procedure from times immemorial. However, since
arbitral proceedings are strictly not governed by the Code of Civil
Procedure, 1908, it is possible for parties to invoke arbitration as and when
the disputes arise, but should the same be permissible without any limitation
and ignoring the principles of public policy as enshrined in these provisions.
27. Multiple arbitrations before different Arbitral Tribunals in respect of
the same contract is bound to lead to enormous confusion. The constitution
of multiple Tribunals in respect of the same contract would set the entire
arbitration process at naught, as the purpose of arbitration being speedy
resolution of disputes, constitution of multiple tribunals is inherently
counter-productive.
28. Typically, in construction contracts, the claims may be multiple in
number but the underlying disputes about breach, delays, termination etc.,
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 would form the core of the disputes for almost all claims. As is seen in the
present case, parties have invoked arbitration thrice, raising various claims
before three different Tribunals which have rendered three separate Awards.
Considering that a previously appointed Tribunal was already seized of the
disputes between the parties under the same contract, the constitution of
three different Tribunals was unwarranted and inexplicable. A situation
where multiple Arbitral Tribunals parallelly adjudicate different claims
arising between the same parties under the same contract, especially raising
overlapping issues, is clearly to be avoided.
29. Multiple arbitrations can be of various categories:
(i) Arbitrations and proceedings between the same parties under the
same contract.
(ii) Arbitrations and proceedings between the same parties arising
from a set of contracts constituting one series, which bind them in a
single legal relationship.
(iii) Arbitrations and proceedings arising out of identical or similar
contracts between one set of entities, wherein the other entity is
common.
30. In Category (i) cases seeking a second reference under Section 11 of
the Arbitration and Conciliation Act, 1996 for adjudication of disputes, the
Supreme Court and High Courts have referred disputes between the same
parties arising under the same contract, to arbitration. In Indian Oil
Corporation Vs. SPS Engg Co. Ltd1, a claim relating to risk-execution of
balance work, which was not referred to the first Tribunal, was referred to
arbitration. Similar is the position in Sam India Built Well (P) Ltd. v. UOI
1
(2011) 3 SCC 507

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 & Ors. [Arb. P. 106/17, decided on 8th September, 2017]; Parsvnath
Developers Limited and Ors. v. Rail Land Development Authority [Arb. P.
724/18, decided on 31st October, 2018]; Parsvnath Developers Limited and
Ors. v. Rail Land Development Authority [Arb. P. 710/19, decided on 19th
May, 2020].
31. In a set of petitions involving several caterers and the Indian Railway
Catering & Tourism Corporation Limited2 (IRCTC cases) involving 25
petitions which fell in category (iii) above, the Delhi High Court recently
appointed a single arbitrator to adjudicate the disputes.
32. However, what can lead to enormous uncertainty and confusion which
ought to be avoided is the constitution of separate Arbitral Tribunals for
separate claims in respect of the same contract, especially when the first
Arbitral Tribunal is still seized of the dispute or is still available to
adjudicate the remaining claims. In Dolphin Drilling Ltd. v. ONGC3, the
Supreme Court, while considering the question as to whether a second
reference for arbitration ought to be made, observed as under:
“5. The plea raised by the respondent voices a real
problem. It is unfortunate that arbitration in this
country has proved to be a highly expensive and
time consuming means for resolution of disputes.
But on that basis it is difficult to read the
arbitration clause in the agreement as suggested
by the respondent. …
6. The plea of the respondent is based on the
words "all disputes" occurring in paragraph 28.3
of the agreement. Mr. Agrawal submitted that
those two words must be understood to mean "all

2
ARB.P. 745-51/2019; ARB.P. 753/2019; ARB.P. 755-61/2019; ARB.P. 763/2019; ARB.P. 765-70/2019;
ARB.P. 780/2019; ARB.P. 789/2019 & ARB.P. 797/2019
3
AIR 2010 SC 1296

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 disputes under the agreement" that might arise
between the parties throughout the period of its
subsistence. However, he had no answer as to
what would happen to such disputes that might
arise in the earlier period of the contract and get
barred by limitation till the time comes to refer "all
disputes" at the conclusion of the contract. The
words "all disputes" in Clause 28.3 of the
agreement can only mean "all disputes" that might
be in existence when the arbitration clause is
invoked and one of the parties to the agreement
gives the arbitration notice to the other. In its
present form Clause 28 of the agreement cannot be
said to be a one-time measure and it cannot be
held that once the arbitration clause is invoked the
remedy of arbitration is no longer available in
regard to other disputes that might arise in
future.”

33. A perusal of the above finding of the Supreme Court clearly shows
that the Court has expressed its displeasure about the arbitration process
becoming a highly expensive and time-consuming means for resolution of
disputes. Owing to the wording of the clause, in the said case, the Supreme
Court referred the parties to arbitration for the second time. The underlying
ratio of Dolphin (supra), on a careful reading, is that all disputes that are in
existence when the arbitration clause is invoked, ought to be raised and
referred at one go. Though there is no doubt that multiple arbitrations are
permissible, it would be completely contrary to public policy to permit
parties to raise claims as per their own convenience. While provisions of the
CPC do not strictly apply to arbitral proceedings, the observations of the
Supreme Court in Dolphin (supra) show that when an arbitration clause is
invoked, all disputes which exist at the time of invocation ought to be

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 referred and adjudicated together. It is possible that subsequent disputes may
arise which may require a second reference, however, if a party does not
raise claims which exist on the date of invocation, it ought not to be given
another chance to raise it subsequently unless there are legally sustainable
grounds. This is necessary in order to ensure that there is certainty in arbitral
proceedings and the remedy of arbitration is not misused by parties. The
constitution of separate arbitral tribunals is a mischief which ought to be
avoided, as the intent of parties may also not be bona fide.
34. It is the settled position in law that the principles of res judicata apply
to arbitral proceedings4. The observations of the Supreme Court in Dolphin
(supra) also clearly show that principles akin to Order II Rule 2 CPC also
apply to arbitral proceedings. The issue as to whether any claims are barred
under Order II Rule 2 CPC or whether any claim is barred by res judicata is
to be adjudicated by the arbitral tribunal and not by the Court 5. Keeping in
mind the broad principles which are encapsulated in Order II Rule 2 CPC, as
also Section 10 and Section 11 of the CPC, which would by itself be
inherent to the public policy of adjudication processes in India, it would be
impermissible to allow claims to be raised at any stage and referred to
multiple Arbitral Tribunals, sometimes resulting in multiplicity of
proceedings as also contradictory awards. Thus, this Court is of the
considered opinion that:

4
K.V. George v. Secretary to Government, Water and Power Department, Trivandrum & Ors., AIR 1990
SC 53
5
Indian Oil Corporation v. SPS Engg. Co. Ltd, (2011) 3 SCC 507; Sam India Built Well (P) Ltd. v. UOI &
Ors. [Arb. P. 106/17, decided on 8th September, 2017]; Parsvnath Developers Limited and Ors. v. Rail
Land Development Authority [Arb. P. 724/18, decided on 31st October, 2018]; Parsvnath Developers
Limited and Ors. v. Rail Land Development Authority [Arb. P. 710/19, decided on 19th May, 2020]

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 i. In respect of a particular contract or a series of contracts that
bind the parties in a legal relationship, the endeavour always ought to
be to make one reference to one Arbitral Tribunal. The solution
proposed by the Supreme Court (Aftab Alam, J.,) in paragraph 9 of
Dolphin (supra) i.e., to draft arbitration clauses in a manner so as to
ensure that claims are referred at one go and none of the claims are
barred by limitation, may be borne in mind. The said observation in
Dolphin (supra) reads:
“9. The issue of financial burden caused by the
arbitration proceedings is indeed a legitimate
concern but the problem can only be remedied by
suitably amending the arbitration clause. In future
agreements, the arbitration clause can be recast
making it clear that the remedy of arbitration can
be taken recourse to only once at the conclusion
of the work under the agreement or at the
termination/cancellation of the agreement and at
the same time expressly saving any disputes/claims
from becoming stale or time-barred etc. and for
that reason alone being rendered non-arbitrable.”

ii. If under a contract, disputes have arisen and the arbitration

clause is to be invoked, at different stages, the party invoking
arbitration ought to raise all the claims that have already arisen on the
date of invocation for reference to arbitration. It would not be
permissible for the party to refer only some disputes that have arisen
and not all. If a dispute and a claim thereunder has arisen as on the
date of invocation and is not mentioned, either in the invocation letter
or in the terms of reference, such claim ought to be held as being
barred/waived, unless permitted to be raised by the Arbitral Tribunal

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 for any legally justifiable/sustainable reasons.
iii. If an Arbitral Tribunal is constituted for adjudicating some
disputes under a particular contract or a series thereof, any further
disputes which arise in respect of the same contract or the same series
of contracts, ought to ordinarily be referred to the same Tribunal. The
Arbitral Tribunal may pronounce separate awards in respect of the
multiple references, however, since the Tribunal would be the same,
the possibility of contradictory and irreconcilable findings would be
avoided.
iv. In cases belonging to Category (iii) involving different parties
and the same organisation, where common/overlapping issues arise,
an endeavor could be made as in the IRCTC cases (supra) to
constitute the same Tribunal. If that is however not found feasible, at
least challenges to the Awards rendered could be heard together, if
they are pending in the same Court.
v. At the time of filing of petitions under Section 11 or Section 34
or any other provision of the Arbitration and Conciliation Act, 1996,
specific disclosure ought to be made by parties as to the number of
arbitration references, Arbitral Tribunals or court proceedings pending
or adjudicated in respect of the same contract and if so, the stage of
the said proceedings.
vi. If there are multiple challenges pending in respect of awards
arising out of the same contract, parties ought to bring the same to the
notice of the Court adjudicating a particular challenge so that all the
challenges can be adjudicated comprehensively at one go. This would
ensure avoiding a situation as has arisen in the present case where
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 Award Nos.1 and 3 have attained finality and the challenge to Award
No.2 continued to remain pending.

35. Coming to the facts, a perusal of the dates would reveal that Award
No.1 was passed on 5th October, 2007 and the Contractor inter alia,
challenged the rejection of Claim 2.3 under Section 34 of the Arbitration and
Conciliation Act, 1996. Parallelly, the Contractor invoked arbitration in
respect of some more claims in 2007. So, while the challenge to Award No.1
was pending, including the rejection of Claim 2.3, the second arbitration was
continuing. In 2009, the Contractor then sought permission of the Court to
agitate Claim 2.3 before the second AT, which it was permitted to do,
keeping open NHAI’s objections. It didn't end there. Thereafter, a third
arbitration, in respect of recovery of amounts collected as liquidated
damages, along with other claims, was invoked by the Contractor on 23rd
December, 2008. Award No.2 was passed on 21st February, 2011 i.e., when
the third arbitration was still continuing. The present OMP came to be filed
in August, 2011. In order dated 20th September, 2011, it is noticed that the
third arbitral proceeding is underway. The third Arbitral Tribunal concluded
its proceedings and rendered its award on 20 th February, 2012. The said
award attained finality on 14th August, 2013. NHAI is also stated to have
paid the awarded sum thereunder.
36. While Awards No. 1 and 3 have attained finality, the challenge in
respect of Award No.2 i.e., the present petition, continues to remain
pending. Parties may not have brought to the notice of the Court deciding
OMP No.584/2012, arising out of Award No. 3, that the OMP relating to
Award No.2 is pending before the Court.

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 37. It is in this background that the Court has to consider the submissions
made on behalf of the Contractor that the findings in Award No.3 have to be
read for deciding the present petition. The question that arises is whether it
is permissible to read the findings of a subsequent award to decide
objections against the previous award.
38. Claim No. 2.3 related to compensation for non-grant of escalation of
rates i.e., revision of rates to cover increased cost of material and labour
beyond the escalation provision provided in the agreement. This claim was
one of the claims raised before the first AT which was, however, rejected by
the first AT in the following terms:

“2.2.3.4 Arbitral Tribunal's observations and

Conclusion.
2.2.4.1 The Claimant preferred this Claim
No.2 under three sub-heads as
follows:
Claim 2.1: Compensation for
losses incurred on account of
overhead and expected profit,
Claim 2.2: Compensation for
reduced productivity of
machinery and equipment
deployed.
Claim 2.3:"Revision of rates to
cover for increase of cost of
materials and labour during
extended period over and
above the relief available under
escalation (price adjustment)
provision in the agreement.
Under sub-claims 2.1, 2.2 & 2.3 the
Claimant demanded compensation of
Rs. 3751.48 lacs, Rs. 1374.93 lacs
and 1406.03 lacs respectively for the
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 period from 15.01.2004 to 06.07.2006
(CA-XV dated 30.10.2006). The
Claimant has finally not demanded a
declaratory award for these sub-
claims.
2.2.4.2 Out of the above three sub claims, the
sub claim No. 2.3 does not find a
mention in the list of claims included
in the notice invoking Arbitration
dated 27.01.2005 (C-87) followed by
letter dated 21.02.2005 (C-89).
Although, this notice (C-87) is in
continuation of the Claimant's notice
dated 25.01.2005 to the General
manager of the Respondents (C-86),
the letter dated 27.01.2005 (C-87),
being the later of two letters and
addressed to the Chairman
(Employer), finally prevails over the
letter dated 25.01.2005 (C-86). The
notice to commence arbitration dated
27.01.2005 in its third para graph
clearly mentions as follows - "In
terms of clause 67.1, we give notice of
our intention to commence arbitration
in respect of the following
issues/claims" (Emphases supplied).
Here the Claimants have listed 9
claims. Sub-Claims 2.3 referred to
above is not included in this list. In
the very first meeting of the AT held
on 06.04.2005 it was made clear by
the AT that the present arbitration is
only for the claims contained in the
Contractor's letters dated 27.01.2005
and 21.02.2005.
Hence the AT rules that sub-
claim 2.3 is outside its terms
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 reference.”

39. Thus, the first AT was of the opinion that Claim 2.3 ought to have
been part of the invocation/reference letter. The said claim, having not been
raised in the invocation letter, was held to be outside the terms of reference.
There is no doubt that in 2009 this Court permitted the Contractor to agitate
the claim before the second AT, however, all objections of NHAI were kept
open. The Second AT has, in the impugned award, come to the conclusion
that escalation is not liable to be granted because of Clause 70.2, as also the
fact that the first AT has taken care of all the escalations which were to be
awarded to the Contractor. The reasoning of the Arbitral Tribunal is that
insofar as delays, if any, by NHAI are concerned, the first AT has granted all
the claims raised by the Contractor and no further claims are liable to be
granted. The second AT has also analysed the aspects of delay and
concluded that the four year delay by the Contractor after the site was
available, was wholly unjustified.
40. The reasoning of the second AT is that Clause 70.2 provides for all
possible changes in cost i.e., rise or fall in prices. Clauses 70.2 and 70.3
provide the formula for grant of escalation which has been granted to the
Contractor. In view of the said clauses, the second AT holds that no further
compensation is liable to be granted. The escalation clause in the contract
has a clearly specified formula. If any rise or fall in costs is not covered by
the contract, as per Clause 70.2 the unit rates and prices mentioned in the
contract would be deemed to cover such contingency. A clear interpretation
of this clause would be that if escalation is otherwise not provided under the
contract, the only escalation permissible would be under Clause 70.2. The

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 impugned award records that the Contractor did not provide any evidence to
support this claim. Since NHAI has already paid as per the escalation clause
in the contract, no further escalation is permissible.
41. In Award No.1, on delay, the Tribunal concludes that delay is
attributable to NHAI only to the extent that there was a delay by NHAI in
handing over the site. The first AT observes that though the initial work of
the Contractor was affected by NHAI’s inability to fulfil its obligations
under Clause 42.01, once the hindrances were removed, the Contractor was
not able to accelerate the progress of the work. However, the 3rd AT, while
dealing with the claim for recovery of liquidated damages, records that
NHAI did not provide sufficient evidence to support the claim that delay
was caused by the Contractor. These awards have to independently stand on
their own legs. Any attempt to conflate Award no.1 into Award no.2 or
Award no.3 into Award no.2 would lead to extremely unpredictable
consequences. Ideally, since the core issue was of delay, one Tribunal ought
to have dealt with all claims. However, that has not happened. It has been a
20-year long journey since the contract was executed in 2000 and the Court
is still wrestling with multiplicity of proceedings, arising out of one contract.
There needs to be an end to such multiplicity of litigations. The second
Award on its own, is quite well reasoned and is also in terms of the clauses
of the contract. In view of the same, it cannot be said that the findings in the
impugned Award no.2 are prone to challenge.
42. On behalf of the Contractor, various judgments have been cited to
support the proposition that claims for damages due to delay and claims for
escalation/revision of rates are distinct. Both claims can be adjudicated upon
and granted separately. Grant of damages does not defeat the claim for
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 escalation. This proposition is not in doubt. However, in the present case,
escalation/revision of rates as per the contract has already been granted and
the Contractor has been compensated for the delays both in Award No.1 and
Award No.3. Claim No.1 (Claim No.2.3 before the first AT) is rightly
rejected on two counts: (i) that the same was not included in the initial
reference, though the dispute had already arisen, (ii) the delays after the
clear availability of site was that of the Contractor and (iii) no escalation
beyond what is permissible in Clause 70.2 is liable to be granted. Escalation
as provided in the Contract has already been granted. This reasoning is not
faulty and is not liable to be interfered with.
43. While hearing a petition under Section 34 of the Arbitration and
Conciliation Act, 1996, it would be incongruous to hold that a finding in a
subsequent award would render the previous award illegal or contrary to
law. The award would have to be tested as on the date when it was
pronounced, on its own merits, and not on the basis of subsequent findings
which may have been rendered by a later Arbitral Tribunal. In Vijay Karia
& Ors. v. Prysmian Cavil E Systemic SRL & Ors.6 the Supreme Court
rejected the argument that since the award under challenge is irreconcilable
and inconsistent with another award, it deserved to be set aside. Thus, the
findings of the second AT do not suffer from any patent illegality or
perversity and no other grounds for interference under Section 34 of the
Arbitration and Conciliation Act, 1996 are made out. Even if, for the sake of
argument, one looks at the findings of the third AT, those relate to delays
caused in the project and the right of NHAI to impose liquidated damages.
Escalation or compensation for non-payment of increased rates, is not the
6
[Civil Appeal No. 1544 of 2020, decided on 13 th February, 2020]

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 subject matter of Award No.3. Thus, none of the findings in Award No.3 can
be jettisoned or incorporated into the present petition to rule in favour of the
Contractor qua Award No.2 for awarding compensation/rate
revision/escalation. The stand of the Contractor is thus not tenable and is
liable to be rejected. The findings of the majority award are clear and
succinct - the scope of interference is very limited. This Court does not find
any merit in the present petition.
44. The issue of multiplicity in arbitral proceedings also needs to be
effectively dealt with to ensure that a long-drawn arbitral journey, as in the
present case, is avoided. Parties to arbitration are expected to adhere to a
bona fide discipline of use of arbitral processes. There appears to be a clear
need for streamlining the same. The Delhi High Court has issued several
practice directions under the Act. One such direction7 requires that when
petitions under Section 9 of the Arbitration and Conciliation Act, 1996, are
filed, it is mandatory for the party to mention that no other petition on the
same cause of action was filed. In an attempt to further avoid multiplicity of
Tribunals and inconsistent/contradictory awards, as has arisen in the present
case, the following directions are issued:
i. In every petition under Section 34 of the Arbitration and Conciliation
Act, 1996 (hereinafter, “Section 34 petition”), the parties
approaching the Court ought to disclose whether there are any other
proceedings pending or adjudicated in respect of the same contract or
series of contracts and if so, what is the stage of the said proceedings
and the forum where the said proceedings are pending or have been
adjudicated.
7
Practice Direction No.16/Rules/DHC, dated 7th December, 2009

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 ii. At the time when a Section 34 petition is being heard, parties ought to
disclose as to whether any other Section 34 petition in respect of the
same contract is pending and if so, seek disposal of the said petitions
together in order to avoid conflicting findings.
iii. In petitions seeking appointment of an Arbitrator/Constitution of an
Arbitral Tribunal, parties ought to disclose if any Tribunal already
stands constituted for adjudication of the claims of either party arising
out of the same contract or the same series of contracts. If such a
Tribunal has already been constituted, an endeavor can be made by
the arbitral institution or the High Court under Section 11, to refer the
matter to the same Tribunal or a single Tribunal in order to avoid
conflicting and irreconcilable findings.
iv. Appointing authorities under contracts consisting of arbitration
clauses ought to avoid appointment or constitution of separate
Arbitrators/ Arbitral Tribunals for different claims/disputes arising
from the same contract, or same series of contracts.

45. The present order be sent to the Ld. Registrar General for being
placed before Hon’ble the Chief Justice for considering if any modifications
are required to be made in the Rules of the Delhi High Court framed under
the Arbitration and Conciliation Act, 1996.
46. The present order be also sent to the Secretary, Ministry of Law &
Justice, Government of India and the Chairman, National Highway
Authority of India.

PRATHIBA M. SINGH
JUDGE
JUNE 23, 2020/dk/dj/T
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