High Court of Delhi was dealing with the petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 (‘A&C Act’) impugning an arbitral award dated 18.03.2020 rendered by the Arbitral Tribunal.
Brief Facts:
The petitioner is engaged in the business of treating waste material. Government of Delhi had acquired land measuring 1000 sq. meters, for establishment of the Centralised Treatment Facility (‘CTF’) for treatment of bio-medical waste. It invited tenders for establishing a CTF for bio-medical waste for a period of ten years. The selected tender was obliged to incur all capital expenditure for establishing the CTF as well as for operation and maintenance. The petitioner tendered for the project and was successful. In terms of the Agreement, the respondent agreed to provide the land for setting up the CTF. And, in terms of Clause 12 of the Agreement, the petitioner agreed to pay monthly charged to the respondent till the date of handing over of the site back to the respondent.
The controversy between the parties, essentially, relates to the obligations of the petitioner to collect and treat bio-medical waste from healthcare establishments identified by the Government of NCT of Delhi, free of any charge, in terms of Clause 10 of an agreement. The petitioner contended that in terms of the said clause, its liability to collect, transport and treat bio-medical waste from the Healthcare establishments was limited to approximately 1000 kgs. per day. According to the respondent, the petitioner was obliged to collect, transport, treat and dispose of all the bio-medical waste from all Healthcare establishments identified by it, free of charge, during the term of the Agreement.
Arbitral Tribunal’s Decision:
The Arbitral Tribunal examined the language of Clause 10 in the context of the Agreement and the Tender Documents. It concluded that there was no maximum limit fixed for collection and treatment of the bio-medical waste from the Healthcare establishments as identified by the respondent. The Arbitral Tribunal reasoned that no such limit was mentioned in the Tender Documents and the contract between the parties was premised on the respondent providing the land for setting up the CTF.
Petitioner’s Contention:
Learned counsel for the petitioner submitted that the impugned order is patently erroneous as the findings of the Arbitral Tribunal to the effect that the petitioner had not raised its claims at the material time, is ex-facie erroneous. He submitted that there was no dispute that the petitioner had raised bills for collecting bio-medical waste in excess of 1000 kgs. However, the said invoices remain unpaid. He further submitted that the impugned award is contrary to the express terms of the Agreement. He submitted that Clause 10 of the Agreement clearly mentioned the quantity ‘about 1000 kg/day’ and therefore, the Agreement had expressly provided the quantum of biomedical waste that would be collected and treated free of charge.
Respondent’s Contention:
Learned Counsel for the respondent submitted that it was apparent from the nature of the contract between the parties that it was not possible to fix any quantity of bio-medical waste to be collected and treated from healthcare establishments. He stated that the petitioner was fully aware that the quantities would continue to increase and it had raised no objections in this regard at the material time.
He submitted that the parties had referred their differences and disputes to arbitration in the year 2014-15. However, even at that stage, the petitioner had not raised any issue regarding a cap on the quantity to be collected and treated free of charge. Thus, it is clear that the parties have always understood that the petitioner was obliged to lift bio-medical waste from the Government Healthcare establishments without any limit on the quantities.
HC’s Observations:
The question before the Court was whether the impugned award is contrary to the terms of the Agreement between the parties and therefore, vitiated by patent illegality.
The Court found that the petitioner had submitted its tender on the basis of the terms and conditions as set out in the Tender Documents. Concededly, the Tender Documents did not limit the quantity that was required to be collected and treated by the selected bidder. The Court found that it is apparent from the above that the respondent had invited bids on the premise that it would provide land for setting up the CTF for biomedical waste in a joint venture with the selected bidder.
HC relied upon the case of Transmission Corpn. of Andhra Pradesh Ltd. v. GMR Vemagiri Power Generation Ltd. the SC held “in the event of any ambiguity arising, the terms of the contract will have to be interpreted by taking into consideration all surrounding facts and circumstances, including correspondence exchanged, to arrive at the real intendment of the parties.”
The Court said that thus, the approach of the Arbitral Tribunal to take note of the Tender Documents while interpreting the clauses of the Agreement cannot be faulted.
The Court stated that “It is well settled that an Agreement is to be read as a whole. There was no provision in the Agreement that could be read to support the petitioner’s interpretation of Clause 10 of the Agreement. The plain language of Clause 10 of the Agreement does not indicate that the only way to interpret it is that ‘1000 kg/ day’ was the maximum limit of waste to be collected and treated by the petitioner. If the petitioner’s contention that the words in the parenthesis ‘about 1000 kg/day’ are to be read as an explanation of the expression ‘all Bio-medical waste’ then it may also follow that the petitioner had agreed to collect and treat about 1000 kgs. per day for the entire term of the contract.”
HC Held:
After evaluating various case laws and submissions by both the parties the Court held that “the view of this Court with regard to the petitioner’s case is not relevant as the scope of examination in these proceedings is limited to ascertaining whether the impugned award is vitiated by patent illegality or that the impugned award is in conflict with the public policy of India. This Court does not find that the Arbitral Tribunal has committed any jurisdictional error or its interpretation of Clause 10 of the Agreement is perverse and warrants any interference in these proceedings.”
Bench: Hon’ble Mr Justice Vibhu Bakhru
Case Title: SMS Water Grace BMW Pvt. Ltd. v. Govt of NCT of Delhi Directorate of Health Services
Case Details: O.M.P. (COMM) 537/2020
Read Judgment;
Social media is bold.
Social media is young.
Social media raises questions.
Social media is not satisfied with an answer.
Social media looks at the big picture.
Social media is interested in every detail.
social media is curious.
Social media is free.
Social media is irreplaceable.
But never irrelevant.
Social media is you.
(With input from news agency language)
If you like this story, share it with a friend!
We are a non-profit organization. Help us financially to keep our journalism free from government and corporate pressure
1 Comments
If you are looking for more information about flat rate locksmith Las Vegas check that right away. kündigen
ReplyDelete