Gas Transmission Company Limited vs. Drilltec-Maxwell Joint Venture

IN THE SUPREME COURT OF BANGLADESH (HIGH COURT DIVISION)

Arbitration Application No. 2 of 2020

Decided On: 24.06.2021

Appellants: Gas Transmission Company Limited
Vs.
Respondent: Drilltec-Maxwell Joint Venture

**Hon’ble Judges:**Muhammad Khurshid Alam Sarkar, J.

Counsels:
For Appellant/Petitioner/Plaintiff: Mejbahur Rahman, Advocate

For Respondents/Defendant: Sharif Bhuiyan, Tanim Hussain Shawon and Reduanul Karim, Advocates

JUDGMENT

Muhammad Khurshid Alam Sarkar, J.

1. By invoking Section 42 read with Section 43 of the Arbitration Act, 2001, (hereinafter referred to as Arbitration Act), the petitioner-Gas Transmission Company Limited (hereinafter referred to either as the GTCL or the petitioner or as the GTCL-petitioner or as the employer) approached this Court with an expectation of issuance of Rule by this Court upon the Drilltec-Maxwell Joint Venture, a joint venture between the DRILTEC GUT Gmbj and Maxwell Engineering Works Ltd., having its joint venture office at 357, Modhubagh, Dhaka-1217 (hereinafter referred to either as the respondent or as the Claimant or as the Claimant-respondent or as the contractor), to show cause as to why the Partial Award(s) dated 28.12.2018 on Liability and on 15.05.2019 on Quantum, Final Award dated 21.08.2019 and Addendum to Final Award dated 14.10.2019 passed by the majority decisions of the arbitral tribunal shall not be set aside.

2. The fact of the case, briefly, is that on 10.08.2010 a turnkey contract being contract No. GTCL/J-B/EPC/Rx-ing/Gr.A/1461 was signed between the employer and the contractor. The turnkey contract was for installation of 30" OD High Pressure Natural Gas Pipeline for crossing the River Padma through Horizontal Directional Drilling Method (HDD Method) on design, procurement, supply, installation, testing, tie-ins with main pipeline and commissioning in accordance with the turnkey contract. The contractor commenced pipeline installation work on 07.07.2011, but faced a subsurface obstruction resulting in failure of their first attempt. The contractor started second drilling attempt on 11.11.2011, but again encountered sub-surface obstruction resulting in no success for the installation work which impelled the contractor to seek for further information from the employer on the construction of the river embankment protection in connection with the existing foundation structure of the Hardinge Railway Bridge. Upon collecting the said information, the same were duly forwarded to the contractor on 23.02.2012 with an advice to the contractor to re-submit a more complete HDD Profile together with necessary design/data based on reliable geophysical investigation as necessary to start and complete the work without further delay since failure on completion of work after two successive attempts had already caused time overrun to go ahead with the project under the stringent conditions of ADB Loan with its closing date of 31.12.2012. However, on 28.07.2012 the contractor made a proposal for compensation of USD 3.5 Million as fees and USD 5.0 Million as compensation for their failed attempt and in reply thereto by letter dated 04.08.2012, the employer consented to further discussions to reach a speedy and a mutually acceptable conclusion.

3. By a letter dated 01.01.2013, the employer requested the contractor to inform whether they were at all willing to complete the project and, if so, to provide a definitive work plan within 10(ten) days. Thereafter, following meetings dated 13.01.2013 and 14.01.2013, when the contractor wrote to the employer on 24.01.2013 that it was undergoing negotiations with a few sub-contractors, including China Petroleum Pipeline Bureau (CPPB) who would assume the risks involved in the third attempt and requested for further extension of time, the employer, however, by its letter dated 12.03.2013 asked the contractor to submit its entire work plan including any additional survey most immediately ensuring a time frame of completion within the month of May 2013. In the mean time, the employer confirmed the contractor in writing that CPPB met the employer’s requirements and might be appointed as sub-contactor if formally proposed under the relevant portions of the contract. Thereafter, the contractor by its letter dated 15.03.2013 informed the employer about the sub-contractor’s high quotations and views of the project being highly risky and made proposals for an alternative bridge crossing method, which required several formalities including permission from the Bridge Authority. Pursuant thereto, drawing for Pakshey Highway Bridge was collected on 10.02.2014 from the Roads and Highways Department and was sent to the contractor on the same day and, thereafter, the contractor submitted a quoted price of US$ 7.828 million for the new crossing work, a compensation of US$ 4.776 million against two failed attempts in addition to the original contract price of US$ 7.45 million; in total 20.054 Million. On 26.06.2014, the Roads Division of the Ministry of Communication informed the employer that as per the as-built drawings of the bridge, there was no provision or scope to cross the river by the alternative method, which was immediately conveyed to the contractor. Following numerous meetings between the parties, eventually, the employer by its letter dated 04.03.2015 sent a default notice to re-start the installation work and when the contractor failed to take any steps to re-start the work within the stipulated deadline of 18.03.2015, the employer by its letter dated 25.03.2015 terminated the contract with effect from the same date.

4. Under the circumstances, the contractor initiated the arbitration proceeding and claimed damages and compensation against the employer. The arbitration tribunal was formed with three arbitrators, namely, Mr. Vinayak Pradhan (the Presiding Arbitrator of the tribunal), Mr. Ajmalul Hossain QC (who was nominated by the petitioner) and Prof. Dr. H. Ercument Erdem (the arbitrator nominated by the respondent). On 28 December 2018, two of the arbitrators, namely, Mr. Vinayak Pradhan and Prof. Dr. H. Ercument Erdem made and issued their majority award, namely, ‘Partial Award (Final on Liability) and the third arbitrator, namely, Mr. Ajmalul Hossain Q.C. did not sign thereon. However, the Award on Quantum dated 15.05.2019 was signed by all the three arbitrators in which Mr. Ajmalul Hossain agreed with the other two arbitrators. The arbitration tribunal thereafter issued the ‘Final Award’ on interest and costs on 21 August 2019 which was not signed by the third arbitrator, Mr. Ajmalul Hossain QC. The said awards, being challenged by the employer in the instant application, have generated this Rule.

5. Mr. Mejbahur Rahman, the learned Advocate appearing for the GTCL-petitioner (employer), takes me through the Partial Award dated 28.12.2018 as to Liability, Award on 15.5.2019 as to Quantum, Final Award dated 21.08.2019 and Addendum to Final Award on 14.10.2019 and submits that the arbitral tribunal, comprised of three arbitrators, passed all the four awards on the basis of the majority decision in violation of Sections 38 and 43 of the Arbitration Act. By placing before this Court the provisions of Sections 38 and 43 of the Arbitration Act, he submits that while Section 43 of the Arbitration Act provides the grounds for setting aside an arbitration award, Section 38 provides that if an arbitral award is made without signature of any arbitrator furnishing no reason thereto, award can be set aside under Clause (a)(v) read with Clause (b)(ii) of sub-Section (1) of Section 43 of the Arbitration Act. Then, Mr. Mejbahur Rahman argues that since Mr. Ajmalul Hossain QC has not signed the awards dated 28.12.2018, 21.08.2019 and 14.10.2019 except the award on Quantum dated 15.05.2019 and since sufficient reasons for such absence of signature have not been provided in the award(s) as contemplated by law and decided by judicial pronouncements from different jurisdictions, the awards in question are liable to be set aside. In support of his above count of submission, he refers to the following reported cases; (i) The Transmission Corporation of AP Ltd. Vs. Galada Power and Telecommunication Ltd. (2007) [2] ALD 697, (ii) Re Poyser and Mills Arbitration (1963) 2 Q.B. 467, (iii) Municipal Corporation of Delhi Vs. Rakesh Brothers (2005) 2 RAJ 17, 20 (Del), (iv) Govt of NCT of Delhi Vs. Ved Prakash Mehta 2005 (Suppl) Arb LR 170, (v) Jai Singh Vs. Delhi Development Authority (2008) 3 Arb LR 667, (vi) Renusagar Power Co. Ltd. Vs. General Electric Co. (1994) 2 Arb LR 405, (vii) Associate Builders Vs. Delhi Development Authority AIR 2015 SC 620, (viii) Oil and Natural Gas Corporation Ltd. Vs. CAW Pipes Ltd. AIR 2003 SC 2629, (viii) Prabhubhai Jodhavji Rathod Vs. Union of India 2008 (3) ALLMR 35, (ix) Government of India, Bharat Sanchar Nigam Ltd. Vs. Acome and Ors. 2007 (2) Arb LR 90 (Del), (x) Ramasubbu Vs. AVM Productions and Ors. and (xi) Dakshin Haryana Bijli Vitram Nigam Ltd. Vs. Navigant Technologies Pvt. Ltd. (2020) 197 PLR 468 and submits that since proper, adequate and intelligible reasons have not been given in the referred awards, the same are liable to be set aside.

6. He next submits that since the tribunal’s basis for passing awards in favour of the Claimant is the ‘misrepresentation’ by the employer to the contractor in supplying information, and since the contractor has never raised the issue of misrepresentation, either at the stage of participation of the bid nor in course of carrying out its contract nor in the notice of arbitration, the ground for setting aside the awards under Section 43(1)(a)(iv) of the Arbitration Act squarely fits in the instant case and, hence, this Court should be satisfied under the provisions of Section 43(1)(b)(ii) of the Arbitration Act towards setting aside the awards. His third count of submission is that the findings of facts by the tribunal, with regard to the contractor’s liability to timely detect the existence of manmade obstruction underneath the soil, are perverse and it is the law of the land that a perverse findings of fact may be set aside at any stage, not only by the appellate forum but also by any superior forum. Mr. Mejbahur Rahman argues that since the awards in question have been passed by the tribunal in violation of the said law, this Court should set aside the award by invoking Section 43(1)(b)(ii) of the Arbitration Act. His fourth count of submission is that the awards have been passed in favour of the contractor based on the observations made by the experts that ‘had there been a Desk Study the manmade obstruction would have been revealed’ but there being no defined task for Desk Study; that is to say, in absence of specification as to what are the papers and documents required to be examined for a particular engineering work, the award ought not to have been passed relying on the said observations. He lastly submits that when the relationship between the parties are based on some specific provisions of contract, passing awards in favour of the contractor merely relying on the experts’ opinion by ignoring the express and binding terms of the contract is a naked violation of the law of the contract and, thus, since the awards have been passed in violation of the law of contract of Bangladesh, the same are liable to be set aside under Section 43(1)(b)(ii) of the Arbitration Act.

7. Dr. Sharif Bhuiyan, the learned Advocate appearing for the Claimant, takes me through sub-Sections (1) and (2) of Section 38 in tandem with Section 43 of the Arbitration Act and submits that the application does not disclose any of the grounds for setting aside an arbitration award as laid down in Section 43 of the Arbitration Act. He submits that the application is ex-facie misconceived inasmuch as the arbitration award has been passed by the majority arbitrators of the arbitration tribunal and it is evident from the award that the award contains the express reason for the omission of signature of Mr. Ajmalul Hossain QC stating that he did not sign the award due to his dissent with the majority arbitrators on the issue of liability and, hence, the award is fully consistent with sub-Sections (1) and (2) of Section 38 of the Arbitration Act. Mr. Bhuiyan submits that the decisions relied on by the petitioner on the point of the arbitrator’s signature do not support the petitioner’s position. On the issue of misrepresentation by the GTCL in supplying information for participation in the bid, the learned Advocate for the Claimant submits that the tribunal has delved deep into the said issue by taking evidence from two experts representing the two contesting parties of the arbitration and, hence, there is no scope for this Court to dwell on the issue in the present application under Section 43 of the Arbitration Act. He submits that in the instant matter, since the arbitration tribunal by a majority decided the substance of the dispute referred to it by applying the correct legal principles and arrived at valid and appropriate findings under the law, and since the petitioner has not been able to make out any case whatsoever for setting aside the awards as per the provisions of the Arbitration Act, the application is liable to be rejected. By referring to a catena of case-laws of our jurisdiction and that of the sub-continent, he professes that entering into the merit of the awards by this Court would amount to sitting in an appellate forum, which is beyond the competency of this Court. He submits that since the grounds invoked in the application are unfounded and there being no infirmity whatsoever in the arbitration award, the Rule is liable to be discharged with exemplary cost.

8. From the analysis of facts of the case, examination of the relevant statutory laws plus case-laws and the submissions advanced by the learned Advocates of the two sides, the following issues have surfaced for adjudication of this Court; firstly, whether this Court is competent to examine the legality and propriety of the awards i.e. the merit of the awards; secondly, whether absence of signature of the minority (one) arbitrator can be a ground for setting aside the awards in question; thirdly, whether the awards have been passed in breach of the laws of Bangladesh, namely, (a) on the basis of perverse findings of facts and (b) in violation of the binding express terms of the contract; and, fourthly, whether the tribunal has dealt with and adjudicated upon any issue going beyond the subject-matter of the dispute or arbitration.

9. Given that the learned Advocate for the Claimant (contractor) Dr. Sharif Bhuiyan has vociferously submitted that re-assessment and reopening of the substance of a dispute that has been decided by an arbitration tribunal are not permitted under the Arbitration Act and, in an effort to buttress up his submission, he has also referred to a number of decisions of both the Appellate Division and the High Court Divisions of the Supreme Court of Bangladesh, I therefore prefer to examine at first the said issue, namely, whether this Court is competent to enter into the merit of the awards in question. For a comprehensive and concrete disposal of the issue, I am required to carry out an examination of the entire provisions of Sections, 39, 42 and 43 of the Arbitration Act in addition to examining the case-laws cited by the learned Advocate for the contractor, Dr. Sharif Bhuiyan. I am undertaking the task of scanning and, then, carrying out surgery of the case-laws relied upon by Dr. Bhuiyan to see whether they are applicable in the case in hand, ahead of examining the statutory provisions, for the reason to be known later on. In the case of Bangladesh Railway V. Pamkaya (M) SDN, BHD 2 CLR (AD) (2014) 139, Bangladesh Railway invited international tender on 04.04.1999 for supply of railway wooden sleepers. Pamkaya became the lowest bidder and its tender document was accepted and, accordingly, contract agreement was entered into between the parties on 05.03.2000. Pamkaya supplied sleepers to Bangladesh Railway and when dispute arose regarding imposition of liquidated damages by Bangladesh Railway on Pamkaya for late delivery of the sleepers, it was heard by an arbitral tribunal, which passed an award on 15.11.2008 partly allowing the claim of Pamkaya. Bangladesh Railway filed an application under Sections 42 and 43 of the Arbitration Act for setting aside the impugned award, stating that it would be apparent from the records that the impugned award was passed without considering Article 10.3 of the GCC. The High Court Division, upon hearing both the sides, by its Judgment and Order dated 20.04.2010 rejected the application. When Bangladesh Railway filed a Civil Petition for Leave to Appeal before the Hon’ble Appellate Division, it was dismissed with the following observations:

“10. The High Court Division came to a finding that any accommodation for the ground stated in this application did not come within the four corners of Section 43 of the Arbitration Act. The High Court Division further found that the tribunal considered the claim in the context of clause 41 of the contract pertaining to liquidated damages and indemnities. Therefore, the High Court Division was disinclined to interfere with the arbitral award dated 15.11.2008 made by the arbitral tribunal.

11. The aforesaid findings of the High Court Division are based on proper appreciation of materials on record, as such, we do not find any ground for interference.

12. Accordingly, this civil petition for leave to appeal is dismissed.”

13. In the case of Bangladesh Power Development Board and others V. M/s. Arab Contractor (BD) Limited and Others 6 ADC (2009) (AD) 952. Bangladesh Power Development Board (BPDB) through a bidding process entered into a construction contract, as part of a power plant, with M/s. Arab Contractors-Shah Islam Joint Venture. After having completed the work and accepting the full payment, the contractor served a notice of arbitration on BPDB having claimed TK. 202,47,32,385.00 over and above the agreed contract price, on account of delay in handing over the site, during which period the machinery and staff had lay idle at considerable expense and secondly, on the ground that BPDB was paying a Russian firm at a higher rate for the same works. The arbitral tribunal passed an award of TK. 70,09,33,243.31 together with interest at the rate of 15% per annum in favour of the contractor. BPDB, being aggrieved by the arbitral award, filed an application under Section 42(1) of the Arbitration Act for setting aside the arbitral award on the grounds that (i) the arbitral award was excessive and without any basis (ii) the losses alleged by the contractor did not arise naturally from the alleged breaches of the petitioners and (iii) the arbitral award had been passed in contravention of Section 73 of the Contract Act, before the learned District Judge, who after hearing both the parties rejected the application. Therefore, BPDB’s filed a miscellaneous appeal before the High Court Division which was dismissed and, when BPDB went to the Hon’ble Appellate Division, the Civil Petition was also dismissed with the following observations:

“29. It appears that this Court can interfere with the arbitration award only on limited ground where the arbitrators decided the matter on inadmissible evidence or on the principles of construction which the law does not countenance. No such case has been made out before us that the arbitrators relied on inadmissible evidence or mis-conducted themselves.

30……………………………………………

31. Admittedly the petitioners are at fault in delaying the matter and the respondents did not cause any delay in completing project. Therefore, the petitioners who are responsible for the delay must pay for the compensation. Interest has also to be given complying with the provision of Arbitration Act, 2001 on the basis of bank papers. We find no substance in these petitions which are accordingly dismissed.”

32. In the case of Rising Sun Traders Ltd. V. Chittagong Port Authority and Ors. 43 DLR (1991) 1, the High Court Division observed as follows:

“22. In proceedings arising out of arbitration, a Court cannot be regarded as a Court of appeal from the decision of the arbitrator. It can set aside an award only on the limited ground set forth in Section 30 of the Arbitration Act. If an award is otherwise valid, a Court cannot interfere with it or review it. Our superior Courts have always expressed opinions in favour of non-interference unless the findings are perverse causing injustice or the arbitrator has mis-conducted himself or the proceedings or the award improperly procured or it was otherwise invalid.”

12. Dr. Sharif Bhuiyan, the learned Advocate for the Claimant in an effort to substantiate his arguments, has cited a few other case-laws of the High Court Division, namely, (i) Jalalabad Gas Transmission and Distribution System Limited V. Lafarge Surma Cement Limited 23 BLC (2018) 775, (ii) Helm Dungemittel Gmbh (“Helm”) V. Bangladesh Chemical Industries Corporation (BCIC) and another 16 BLC (2011) 783, (iii) Bangladesh Telegraph and Telephone Board V. Lithi Enterprise Ltd. 46 DLR (1994) 122 and (iv) Titas Prokaushali Limited V. Roads and Highways Department, Government of Bangladesh 46 DLR (1994) 665).

13. The gist that emerges from the cited decisions of our jurisdiction is that an arbitral tribunal’s award can be set aside only on the limited ground engraved in Section 43 of the Arbitration Act i.e. the High Court Division/the Court can not function like an appellate Court/forum which is at liberty to entertain and examine any types of factual and legal issue or ground. And the case of Mr. Bhuiyan, as has been made out and developed by him, is that since according to Section 39(1) of the Arbitration Act an arbitral award made by an arbitral tribunal pursuant to an arbitration agreement shall be final and binding on the parties to the agreement, and since its sub-Section (2) allows a person to challenge the arbitral award only under Sections 42 and 43 of the Arbitration Act, hence, the substance of the dispute is beyond the scope of an application for setting aside an arbitral award as it is a well-established principle, upheld consistently by both the Hon’ble Appellate Division and the High Court Division that if an arbitration tribunal has gone through the claim and the defence, and has determined the dispute, it is not open to the Court to disturb or interfere with the determination except on the grounds provided for in the Act; that entering into merit of the award passed by the arbitration tribunal not only be a violation of the provision of the Arbitration Act, but it shall also put Bangladesh in breach of the international covenant signed by it following ‘The Convention on Recognition and Enforcement of Foreign Arbitral Awards’, done at New York, 10 June 1958.

14. Therefore, examination of the provisions of Section 39, 42 and 43 of the Arbitration Act, recourse of which have been taken by the learned Advocate for both the sides as well as have been resorted to by the Hon’ble Judges in the cited decisions, are very crucial for an effective disposal of the issue. Let me first take up Sections 39 and 42, which are quoted below:

15. Award to be final and binding-(1) An arbitral award made by an arbitral tribunal pursuant to an arbitration agreement shall be final and binding both on the parties and on any persons claiming through or under them.

(2) Notwithstanding anything contained in sub-Section (1), the right of a person to challenge the arbitral award in accordance with the provisions of this Act shall not be affected.

42. Application for setting aside arbitral award-(1) The Court may set aside any arbitral award under this Act other than an award made in an international commercial arbitration on the application of a party within sixty days from the receipt of the award.

(2) The High Court Division may set aside any arbitral award made in an international commercial arbitration held in Bangladesh on the application of a party within sixty days from the receipt of the award.

15. A plain reading of the provisions of Section 39(1) of the Arbitration Act in tandem with its Section 42(2) provides a clear understanding that when an international commercial arbitration is held in Bangladesh, its award may be set aside by the High Court Division if an aggrieved party to the arbitration approaches the High Court Division within sixty days.

16. In the case in hand, the arbitration is an international commercial arbitration and since one party of the arbitration GTCL (employer) being aggrieved by the award made by the arbitral tribunal has filed the application within the stipulated time, the argument made by the learned Advocate for the Claimant that the substance of the dispute is beyond the scope of an application for setting aside an arbitral award appears to this Court to be without any merit. In this case, the arbitral tribunal commenced its proceedings sitting in Dhaka and, later on, on a few occasions sat outside of Dhaka considering the convenience of the two foreign arbitrators. However, since the tribunal in its awards mentioned the place of arbitration as Dhaka with the consent of both the sides, it has not been made an issue by either party. Nonetheless, this Court finds it pertinent to make an observation here in the public interest that the various Government entities of Bangladesh such as, the Ministries, Corporations, Statutory bodies and Government-owned companies should pursue their foreign counterparts to incorporate the Arbitration Act, 2001 as the provisions for conducting arbitrations, instead of ICC Rules, SIAC Rules, HKIAC Rules, VIAC Rules, ICDR Rules, SCC Rules, DIS Rules, LCIA Rules, SCAI Rules, ISTAC Rules, AIAC Rules or any other international Rules for the reason that the cost of the arbitration as well as the time of disposal of arbitration will be lesser than the arrangements made under any of the foreign Rules of Arbitration. Since our statutory law, namely, Arbitration Act allows any foreign arbitrator to be included in the tribunal, the foreign party to the contract would not reject such proposal of Bangladeshi Government entities. It is to be noted here that the instant arbitral proceeding was initiated in the year 2015 and ended in 2019 at the expense of nearly Taka 5 (five) crore.

17. Reverting to the issue of examination of Sections 39 and 42 of the Arbitration Act, all that this Court finds is that an award passed by the arbitral tribunal is very much challengeable and the High Court Division/the Court is well competent to set aside the said award. But in setting aside the award, the High Court Division/the Court has to act within the peripheries of the provisions of Section 43 of the Arbitration Act.

18. So, at this juncture, let me look at the provisions of Section 43 of the Arbitration Act, which runs as follows:

19. Grounds for setting aside arbitral award-

(1) An arbitral award may be set aside if-

(a) the party making the application furnishes proof that-

(i) a party to the arbitration agreement was under some incapacity;

(ii) the arbitration agreement is not valid under the law to which the parties have subjected it;

(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable due to some reasonable causes to present his case;

(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decision on matters beyond the scope of the submission to arbitration;

Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside;

(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement was in conflict with the provisions of this Act, or, in the absence of such agreement, was not in accordance with the provisions of this Act.

(b) the Court or the High Court Division, as the case may be, is satisfied that-

(i) the subject matter of the dispute is not capable of settlement by the arbitration under the law for the time being in force in Bangladesh;

(ii) the arbitral award is prima facie opposed to the law for the time being in force in Bangladesh;

(iii) the arbitral award is in conflict with the public policy of Bangladesh or

(iv) the arbitral award is induced or affected by fraud or corruption.

19. From a plain reading of the entire provisions of Section 43 of the Arbitration Act, it appears that in order to make out a case under Section 43 of the Arbitration Act while Clause (a) of sub-Section (1) of Section 43 of the Arbitration Act requires proof of any of the occurrences described in its sub-Clause (i) to (v), Clause (b) of sub-Section (1) of Section 43 of the Arbitration Act stipulates that there must be findings by the High Court Division/the Court that the award in question suffers from any of the defects/flaws set out in its sub-Clause (i) to (iv). In other words, an arbitral award would be set aside upon fulfilling any of the following two conditions set out in Clause (a) and Clause (b) of Section 43(1) of the Arbitration Act i.e. either the applicant must place before the High Court Division/the Court the evidence as to any of the facts narrated in sub-Clauses (i) to (v) of Clause (a) of Section 43(1) of the Arbitration Act; or the High Court Division/the Court shall be satisfied that there is existence of any of the points/issues enumerated in sub-Clauses (i) to (iv) of Clause (b) of Section 43(1) of the Arbitration Act. If an application challenging a foreign/native arbitral award is not fitted into any of the provisions of Section 43 of the Arbitration Act, the said application is doomed to fail without examining any other legal aspect, including examination of any case-laws cited by the parties.

20. It is to be clarified here that both the Clauses (a) and (b) and all the sub-Clauses under the aforesaid two Clauses of Section 43(1) of the Arbitration Act must be read with ‘or’ at the end of each of these Clauses and sub-Clauses inasmuch as, firstly, without the word ‘and’, the aforesaid Clauses and sub-Clauses shall have to read as conjunctive provisions and, in that event, i.e. reading the said provisions as conjunctive, it shall render the applicability of Section 43 of the Arbitration Act impossible, secondly, similar disjunctive provisions are also provided in Article 34(2) of the UNCITRAL Model Law which states the grounds on which an arbitral award may be set aside and, finally, the corresponding provisions of the Arbitration and Reconciliation Act, 1996 of India contain ‘or’ in all these Clauses and sub-Clauses. Non-insertion of the disjunctive word ‘or’ is, thus, found by mis-Court as a mere inadvertent omission of the draftsman of this piece of legislation.

21. So, the net result of the examination of Sections 39, 42 and 43 of the Arbitration Act plus scanning and surgeries of the cited case-laws is that the High Court Division/the Court is empowered to annul an award passed by the arbitral tribunal, if the outcome of the factual analysis and/or examination of the legal issues carried out by the arbitral tribunal attracts any of the grounds delineated in Section 43 of the Arbitration Act. There is, thus, nothing in the four corners of Section 43 of the Arbitration Act to say that no factual aspect of the arbitral tribunal’s award is touchable by the High Court Division/the Court.

22. The High Court Division/the Court, however, is not competent to take new evidence like an appellate Court; only the facts germane to the provisions of Section 43 of the Arbitration Act, materials/evidence of which are already available in the award made by the arbitral tribunal, are permissible to dwell on. The Biblic ratio laid down in all the cited case is that the High Court Division/the Court shall not perform the functions of the appellate Court/forum, with which this Court is in agreement in toto in as much as an appeal being the continuation of the trial Court’s proceeding, an appellate Court/forum is not only competent to reassess the evidence taken by the trial Court, it is also capable of taking additional evidence; but in an application under Section 43 of the Arbitration Act, examination of new/additional facts being completely beyond the scope of the aforesaid provision, assessment of the materials/facts on record may be carried out only for the purpose of connecting the same with the provisions of Section 43 of the Arbitration Act.

23. With the above conclusion on the issue of competency of this Court as to entering into or dealing with the merit of an arbitration award, I may now embark upon the examinations of the second issue, namely, whether absence of signature of one of the arbitrator can be a ground for setting aside the award in question. For an effective disposal of the second issue, quotation of the relevant laws, namely, Provisions of Sections 38 of the Arbitration Act would be useful. Let me, hence, quote the provisions of Section 38 of the Arbitration Act.

24. Form and contents of arbitral award:

(1) An arbitral award shall be made in writing and shall be signed by the arbitrator or arbitrators.

(2) In arbitral proceedings with more than one arbitrator, the signatures of the majority of all the members of the arbitral tribunal shall be sufficient so long as the reason for any omitted signature is stated.

(3)……………………………………. not relevant

(4)…………………………………… not relevant

(5)……………………………………. not relevant

(6)……………………………………. not relevant

(7)……………………………………. not relevant.

24. The above-quoted provisions of Section 38 of the Arbitration Act are similar to Article 34(4) of the UNCITRAL Arbitration Rules 2010, which is the agreed procedural law of the instant arbitration. Article 34(4) of the UNCITRAL Arbitration Rules 2010 provides as follows:

An award shall be signed by the arbitrators and it shall contain the date on which the award was made and indicate the place of arbitration. Where there is more than one arbitrator and any of them fails to sign, the award shall state the reason for the absence of the signature.

25. The provisions of Section 38 of the Arbitration Act and Article 34(4) of the UNCITRAL Rules provide the form and contents of arbitral award in a very simple and plain language. They set out, as appears from their combined reading, that (i) an award shall be made in writing containing the date and place of arbitration, (ii) it shall be signed by the arbitrator/s and (iii) where the arbitral tribunal is manned by more than one Arbitrator, majority signatures of the Arbitrator shall be sufficient containing a statement as to reason for the omitted signature.

26. It is the case of the petitioner that if the arbitration proceeding is not held and completed in consonance with the agreed procedures, the provision of Section 43(1)(a)(v) of the Arbitration Act (i.e. the arbitral procedure was not in accordance with the agreement of the parties) is attracted towards seeking setting aside of the arbitral award. And it is his argument that making/passing of an award being the integral part of the arbitral procedure, and the award in question having not been passed with the reason for not-signing by one arbitrator, the facts of the present case fall within the purview of Clause (a)(v) of Section 43(1) of the Arbitration Act and, therefore, this Court should be satisfied under Clause (b)(ii) of Section 43(1) of the Arbitration Act that the arbitral awards have been passed in violation of the provisions of Sections 38(1) and 38(2) of the Arbitration Act.

27. In order to check whether there is any substance in the said arguments of the learned Advocate for the GTCL-petitioner, I need to scrutinize the factual aspect of this issue. It is an admitted position that the parties of the arbitration had agreed to adopt the UNCITRAL Arbitration Rules 2010 and, as per its Rule 4, where the arbitral tribunal is formed with more man one arbitrators, the award must contain the signatures of all the arbitrators but if any one of them fails to sign, the reason for absence of the signature must be contained in the award. Here, in the case in hand, the arbitral tribunal is constituted with three arbitrators, namely, Mr. Vinayak Pradhan (the presiding arbitrator of the tribunal), Mr. Ajmalul Hossain QC (who was nominated by the GTCL) and Prof. Dr. H. Ercument Erdem (the arbitrator nominated by the Claimant) and the award was passed without the signature of Mr. Ajmalul Hossain QC. Since the agreed procedure (i.e. rule 4 of the UNCITRAL Arbitration Rules 2010) requires that there must be reason as to non-signing by any arbitrator in the award, it is incumbent upon this Court to see whether the reason for absence of Mr. Ajmalul Hossain QC’s signature has been stated in the award in question.

28. It is evident from Para 148 of the Partial Award dated 28 December 2018 as to Liability that the following reasonings have been made in passing the award by the majority arbitrators;

“Mr. Ajmalul Hossain does not agree to this Partial Award and is of the view that the Claimant’s claim should be dismissed and that the Respondent’s counterclaim should be allowed. He consequently not signing this Partial Award”.

29. Further, in Para 5 of the Final Award dated 21 August 2019, it is stated that

“This Final Award is a majority award with Mr. Ajmalul Hossain QC dissenting as he does not agree on the decision as to liability reached by the majority in the partial Award (Final as to Liability)”.

30. Hence, the submissions made by the learned Advocate for the GTCL-petitioner that the arbitral award has not been passed as per the terms of the agreed procedure under Rule 4 of the UNCITRAL Arbitration Rules 2010, appears to me to be without any substance.

31. Now, let me see whether the awards have been passed in violation of law [i.e. Sections 38(1) and 38(2) of the Arbitration Act] to attract the provisions of Sections 43(1)(b)(ii) of the Arbitration Act [i.e. “(b) the Court or the High Court Division, as the case may be, is satisfied that-(ii) the arbitral award is prima facie opposed to the law for the time being in force in Bangladesh”]

32. Sub-Section (1) and (2) of Section 38 of the Arbitration Act in unambiguous wordings provide that if the arbitration tribunal consists of more than one arbitrator, the award may be passed with the signatures of majority arbitrators containing a statement regarding omission of the signature of the minority arbitrator/s. In the light of the fact that me majority arbitrators, namely, Mr. Vinayak Pradhan and Prof. Dr. H Ercument Erdem have stated the reasons for omission of the minority arbitrator’s signature in the awards, which are quoted hereinbefore, it is crystal clear that there has not been any violation of the provisions of sub-Sections (1) and (2) of Section 38 of the Arbitration Act and, therefore, there is no scope to link the instant case with the provisions of Section 43(1)(b)(ii) of me Arbitration Act.

33. It follows that me petitioner’s first count of submissions does not come within the ambit of Section 43 of the Arbitration Act. With me aforesaid conclusion by this Court on me issue of absence of signature of one of the three arbitrators, although examination of the referred case-laws on this issue has been a redundant task, nonetheless, for the satisfaction of me parties to this case to the effect that there has been a fair and effective disposal of the issue, I am inclined to embark upon examination of the cases referred to, and relied upon, by the learned Advocate for the GTCL-petitioner.

34. The decision made in Poyser and Mills Arbitration Re (1963) 2 QB 467 is not relevant to the instant matter for the following reasons:

(a) The tribunal that issued the award in this case comprised a sole arbitrator. Therefore, mere is no scope for drawing an analogy between the decision in Poyser and me present matter, where the tribunal comprised three arbitrators.

(b) In that case, the award was set aside on the ground that the reason for the sole arbitrator’s decision in the arbitral award was not a proper, adequate reason dealing with the substantial point raised. Thus, the case did not involve an issue similar to the one involved in the instant matter.

(c) The expression “reason” as referred to in Poyser is the reason for the decision of the arbitrator in the award, and not the reason for absence of signature of the third arbitrator.

35. The decision made in Municipal Corporation of Delhi v. Rakesh Brothers (2005) 2 RAJ 17, 20 (Del) is not relevant to the instant matter for the following reasons:

(a) The tribunal that issued the award in that matter comprised a sole arbitrator (paragraph 1 of the Judgment). Accordingly, there is no scope for drawing an analogy between the decision in that case and the present matter, where the tribunal comprised three arbitrators.

(b) The case involved interpretation of Section 31(3) of the Indian Arbitration & Conciliation Act, 1996 (paragraph 16 of the Judgment which is quoted below:

“(3) The arbitral award shall state the reasons upon which it is based, unless:

(a) the parties have agreed that no reasons are to be given, or

(b) the award is an arbitral award on agreed terms under section 30.”

(c) The expression “reasons” as referred to in the above provision means reasons upon which an arbitral award is based, as opposed to the reason for omission for signature of one of the arbitrators.

36. The decision made in Govt. of NCT of Delhi Vs. Ved Prakash Mehta 2005 (Suppl) Arb LR 170, 173 is not relevant for the following reasons:

(a) The tribunal that rendered the award consisted of a sole arbitrator (paragraphs 1 and 3 of the Judgment). Therefore, there is no scope for drawing an analogy between the decision in that case and the present matter.

(b) In that case, the main grounds for objection were that (1) the sole arbitrator travelled beyond the jurisdiction and terms of reference, (ii) the sole arbitrator did not give reasons for giving the award, and (iii) some claims were not originally referred to the arbitrator, but the same were taken into consideration by the sole arbitrator (paragraph 4 of the Judgment). Accordingly, that case did not involve an issue similar to the one involved in the instant matter.

37. The decision made in Jai Singh v. Delhi Development Authority (2008) 3 Arb LR 667 is not relevant to this matter for the following reasons:

(a) The tribunal that rendered the award consisted of a sole arbitrator (paragraphs 20 and 23 of the Judgment). Therefore, there is no scope for drawing an analogy between the decision in that case and the present matter.

(b) The case involved application of Section 31(3) of the Indian Arbitration & Conciliation Act, 1996, which requires an arbitral award to state the reasons upon which it is based (paragraph 3 and 4 of the Judgment). Thus, the case did not involve the issue of reason for omission for signature of one of the arbitrators.

38. The decision made in The Transmission Corporation of Andhras Pradesh Limited and Ors. Vs. Galada Power and Telecommunication Limited and Ors. 2007 (2) ALD 697, 2007 (1) ALT 515, 2007 (1) ARBLR 447 (AP) does not support the GTCL’s (petitioner’s) case, rather supports the Claimant’s (respondent’s) case as explained below:

(a) In that case, the tribunal consisted of three arbitrators. The award contained signature of two arbitrators (out of three arbitrators) and did not contain the signature of the presiding arbitrator nor his name was typed. It was no where indicated much less shown specifically any reason or explanation for the absence or omission of the arbitrator…, either in person or by signature." (paragraph 24 of the Judgment). The facts in that case are distinguishable from the present matter inasmuch as admittedly in the instant matter, the arbitral award states the reason for absence of signature of the third arbitrator.

(b) The following observations in that case support the position of the Claimant, Drill Tec-Maxwell Joint Venture:

“29. From the above and especially as provided for under Sub-clause 1 therein, necessarily it follows that the award has to be made in writing and shall has to be signed by the members of the Arbitral Tribunal i.e., by all of the members together. However, as contemplated under Sub-clause 2 above, in the event of any member of the Tribunal, omission to sign, the same has to be explained or stated as to the reason for such omission, and it is the signature of the majority of all members of the Tribunal which is considered to be sufficient for making the valid award. Thus, it makes an obligatory on the part of each of the members of the Arbitral Tribunal to sign the award to make it as a valid one or in the absence of any of them necessarily it contemplates to state the specific reasons for such absence.”

[Underline added]

(c) Since, in the instant matter, the award has been passed by the majority arbitrators, including the Presiding Arbitrator, and the award expressly provided the reasons for the omission of signature of the third arbitrator, the award is consistent with the principle enunciated in the above judgment.

39. In Renusagar Power Co. Ld. Vs. General Electric Co. (1994) 2 Arb LR 405, an award by the tribunal was rendered in favour of General Electric which it sought to enforce before the High Court of Bombay. Renusagar contested the enforcement application. The objection of Renusagar against enforceability of the award was based on (i) Section 7(1)(a)(ii) of the Foreign Awards Act, on the ground that Renusagar was unable to present its case before the ICC tribunal; and (ii) Section 7(1)(b)(ii) of the Foreign Awards Act, on the ground that the enforcement of the award would be against public policy (paragraph 25 of the Judgment). The Supreme Court of India affirmed the Judgment of the Bombay High Court passing a decree in terms of the award in the enforcement application (paragraph 133 of the Judgment). Thus, the case did not involve the issue that is relevant for adjudication of the present matter.

40. The decision made in Associate Builders Vs. Delhi Development Authority AIR 2015 SC 620 is not relevant to the instant matter for the following reasons:

(a) Award in question was passed by a single arbitrator (paragraph 2 of the Judgment).

(b) In that case, the Supreme Court of India examined whether a Division Bench had exceeded its jurisdiction in setting aside an arbitral award (paragraph 3 of the Judgment). The Division Bench set aside the award through re-examining a formula applied by the sole arbitrator in deciding the substance of the dispute (paragraph 15 of the Judgment) and the Supreme Court of India held that the Division Bench exceeded its jurisdiction in interfering with a possible view of the arbitrator on facts (paragraph 16 of the Judgment and entering into pure question of facts (paragraph 22 of the Judgment). Thus, the decision did not concern at all the issue that is relevant to the present matter.

41. The decision made in Oil & Natural Gas Corporation Ltd. (ONGC) Vs. SAW Pipes Ltd. AIR 2003 SC 2629 does not involve the issue in the present case, as explained below:

(a) The matters involved in the ONGC case is summarized as follows:

“12. The question, therefore, which requires consideration is whether the award could be set aside, if the arbitral tribunal has not followed the mandatory procedure prescribed under Sections 24, 28 or 31(3), which affects the rights of the parties”. Under Sub-Section (1)(a) of Section 28 there is a mandate to the arbitral tribunal to decide the dispute in accordance with the substantive law for the time being in force in India. Admittedly, substantive law would include the Indian contract Act, the Transfer of Property Act and other such laws in force. Suppose, if the award is passed in violation of the provisions of the Transfer of Property Act or in violation of the Indian Contract Act, the question would – whether such award could be set aside? Similarly, under Sub-Section (3), arbitral tribunal is directed to decide the dispute in accordance with the terms of the contract and also after taking into account the usage of the trade applicable to the transaction. If arbitral tribunal ignores the terms of the contract or usage of the trade applicable to the transaction, whether the said award could be interfered? Similarly, if the award is non-speaking one and is in violation of Section 31(3), can such award be set aside? In our view, reading Section 34 conjointly with other provisions of the Act, it appears that the legislative intent could not be that if the award is in contravention of the provisions of the Act, still however, it couldn’t be set aside by the Court. If it is held that such award could not be interfered, it would be contrary to basic concept of justice. If the arbitral tribunal has not followed the mandatory procedure prescribed under the Act, it would mean that it has acted beyond its jurisdiction and thereby the award would be patently illegal which could be set aside under Section 34."

(b) Section 31(3) of the Indian Arbitration and Conciliation Act, 1996 (which is identical to Section 38(3) of the Bangladesh Arbitration Act, 2001) requires that the arbitral award shall state the reasons upon which it is based. In the instant matter, it is an admitted position that the majority award has stated the reasons for the decision. Therefore the decision in ONGC case has no relevance to the present matter at all.

42. The decision made in the case of Prabhubhai Jadhavi Rathod Vs. Union of India 2008 (3) ALLMR 35, is not relevant to the present matter for the following reasons:

(a) The dispute before the arbitrators arose out of a contract. Completion of work was delayed. The appellant claimed recovery of certain losses on certain heads. The arbitrators allowed the claims. The respondent brought an application before the District Judge of Nagpur to set aside the award on the ground that the arbitrators misconducted the proceedings by travelling beyond his jurisdiction conferred by the contract between the parties (paragraphs 1, 3 and 4 of the Judgment). The District Judge found that the arbitral tribunal exceeded its jurisdiction. On appeal by the appellant, the High Court of Bombay (Nagpur Bench) affirming the findings of the District Judge dismissed the appeal (paragraph 17 of the Judgment).

(b) Thus, the case did not involve any issue that is relevant in the present matter.

43. The decisions discussed below address the issue involved in the present matter and support the respondent’s (Drilltec-Maxwell Joint Venture’s) position. In Government of India, Bharat Sanchar Nigam Ltd. Vs. Acome and Ors. 2007 (2) ARBLR 90 (Delhi); 2007 (95) DRJ 466, the dispute was referred to an arbitration tribunal consisting of three arbitrators. Two of the arbitrators passed a majority award. The award was not signed by the third arbitrator (arbitrator appointed by the petitioner). The High Court of Delhi held as follows:

“28. Section 31(1) of the Act makes it clear, and this is the common case of both the parties, that the law contemplates the passing of only one arbitral award. Reading of Section 31(2) makes it clear that in an arbitral proceedings before a Tribunal consisting of more than one arbitrator the award of the Tribunal would be sufficiently made, if it is signed by the majority of arbitrators, so long as the reason for the omission to sign by other arbitrators who are in minority is so stated in the award itself.

29…………………………………………….

30…………………………………………….

31. Where the Tribunal is a multi member body (it can only be an odd number under Section 10) and there is unanimous award by all the members of the Tribunal, it does not raise any difficulty of the kind presented in this case. However, there is a possibility that a majority of the arbitrators agree on a particular form of award, and a minority does not. In that situation the minority is not obliged to sign an award prepared by the majority of arbitrators. It is open to the minority of arbitrators to prepare their own opinion and communicate it to the parties. This may happen either before, simultaneously with, or after the award of the majority is made and communicated to the parties. It is also open to the minority of arbitrators not to pen down their opinion at all. Where the minority gives its opinion even before the majority award is made and communicated, since it is only an opinion and not an arbitral award, it has no efficacy as an award and it cannot be enforced. It has no bearing on the rights and obligations of the parties as determined by the majority of arbitrators. Consequently, it is incapable of, and not required to be challenged or objected to as an award under Section 34 of the Act. Only when the award of the majority of arbitrators is received, which is the award of the Tribunal, it would give a cause to the aggrieved party/parties to object to the same. Limitation would therefore begin to run from the time the majority award is communicated to the party concerned.

32………………………………………….

33………………………………………….

34. Consequently, it is immaterial whether the opinion of the minority of arbitrators, if any, is made available to the parties at the same time as the award of the majority or not. From the decisions cited above, it is evident that it has always been the law that an award which is signed by the majority of arbitrators is a valid and enforceable award. The contention of the Petitioner that an award, of necessity, has to be signed by all the arbitrators, or that even if there are two or more opinions, they should all be expressed in writing and communicated by the arbitrators before a valid and binding arbitration award comes into being, therefore, does not appear to be correct and is rejected. This submission is also not in consonance with Section 31(2) of the Act, which provides that the signature of the majority of all arbitrators of the Arbitral Tribunal shall be “sufficient”. The language used by the legislature in Section 31 of the Act is clear, and on a plain reading of the section no other reasonable conclusion can be reached. It may be noted that in spite of the language used by the Parliament in Section 10 read with Section 14 of the Arbitration Act, 1940, the Madras High Court in R. Dashratha Rao (supra) took the view that an award might be pronounced by a majority of arbitrators, and the failure of the minority to sign the Award does not affect the validity of the Award. Under the 1996 Act, the Parliament has made it explicit and clear that it shall be “sufficient” if the award is signed by the majority of arbitrators and the reasons for the omission of the minority to sign are stated in the award.

35. In my view the limitation for filing of objections would begin to run from the date the parties are put to notice of the award majority a ward. That to my mind is also the purposive interpretation of the provisions of the Act. The party succeeding before the Arbitral Tribunal, in whose favor the award has been rendered, would be left high and dry if it is taken that the majority award cannot be challenged or executed unless all the arbitrators give their potential to frustrate the scheme of the Act whenever there is a multimember Arbitration Tribunal constituted. The object of the Act is to provide speedy and alternative resolution of disputes. This would be defeated if one or more arbitrators in minority choose to either delay the publication of their opinion, or choose not to give it at all.

36. The contention of Learned Counsel for the Petitioner that the word “sufficient used in Section 31(2) of the Act means that the reasons for omission of signature of the minority of arbitrators must to be those found within the provisions of the Act itself, and particularly in Section 14 thereof is also incorrect. Sub-section (2) of Section 31 does not deal with the reasons for which the minority of the arbitrators may omit to sign the award. The reason of dissent with the majority is a reason good enough and is also contemplated by the Act since Section 29 talks of the decision being made by majority of all arbitrators. This obviously contemplates the possibility of dissent by a minority of arbitrators…..”

[emphasis added]

44. The Judgment of the Delhi High Court in the above case (Government of India Bharat Sanchar Nigam Limited vs. Acome and Ors.) has been followed and applied in a number of recent cases, including (i) R. Ramasubbu Vs. AVM Productions and Ors., and (ii) Dakshin Haryana Bijli Vitran Nigam Ltd. Vs. Navigant Technologies Pvt. Ltd., discussed below.

45. In R. Ramasubbu Vs. AVM Productions and Ors., the petitioner brought an application under Section 34 of the Indian Arbitration and Conciliation Act, 1996 praying for setting aside the majority award on the ground, amongst others, that the award dated 28.08.2009, though it appeared to be a majority award signed by two arbitrators out of three, could not be accepted as a valid award since there was no reason whatsoever assigned for non-signing of the award by the third arbitrator (paragraph 10 of the Judgment).

46. The High Court of Madras while dismissing the application observed as follows:

“40. The majority of the Arbitrators in their covering letter dated 12.11.2009, enclosing a signed copy of the Arbitral Award have informed the Petitioner as well as the first Respondent, the reasons as to why the third Arbitrator Mr. R.K. Chandramohen has not signed the Arbitral Award. In that letter, the majority of the Arbitrators have informed the parties to the dispute that Mr. R.K. Chandramohen, the third Arbitrator has neither agreed or dissented from the majority Arbitral Award for nearly two months and therefore, the majority Arbitrators were constrained to send the Arbitral Award without the signature of the third Arbitrator Mr. R.K. Chandramohen. It was also clearly indicated in that letter, in the event of Mr. R.K. Chandramohen, the third Arbitrator writing a separate Award, it will be sent to the parties to the dispute by the third Arbitrator.

41. As seen from the letter dated 12.11.2009, it is evident that the majority of the Arbitrators have given reasons for the omission of the signature of the third Arbitrator in the Arbitral Award. Therefore, the requirements of Section 31(2) of the Arbitration Act have been fully satisfied.

42…………………………………………….

43…………………………………………….

44…………………………………………….

45. In view of the above findings, this Court does not find force in the submission of the learned Counsel for the Petitioner that the Arbitral Award dated 28.08.2009, though it appears to be a majority Award signed by the two Arbitrators out of three Arbitrators, it cannot be accepted as a valid Award since there is no reason whatsoever assigned for non-signing of the Award by the third Arbitrator.

46. This Court is in agreement with the Division Bench Judgment of the Delhi High Court in the case of Government of India Bharat Sanchar Nigam Limited vs. Acome and Ors., reported in 2006 AIR 2011 102 cited by the learned Counsel for the first Respondent that if the Award signed by majority Arbitrators and refusal of minority Arbitrator to sign will not affect its validity.

47. The judgment relied upon by the learned Counsel for the Petitioner, reported in AIR 1950 SC 188 deals with Industrial Disputes Act and not with Arbitration and Conciliation Act. The Arbitration and Conciliation Act is a self contained and a Special Code by itself. Section 31(2) permits the majority of the Arbitrators passed an Arbitral Award without the signature of the minority Arbitrator, if reasons for omission of the signature of minority Arbitrator is given. In the case in hand, reasons were given by the majority Arbitrators for omission of signature of the third Arbitrator in the Arbitral Award dated 28.08.2009. There is no similar provision under the Industrial Disputes Act. Therefore, the Judgment cited by the learned Counsel for the Petitioner is not applicable for the case on hand.

48. In the result, there is no merit in the instant petition filed by the Petitioner. Accordingly, the original petition shall stand dismissed. However, there shall be no order as to costs.”

[emphasis added]

47. In Dakshin Haryana Bijli Vitran Nigam Ltd. Vs. Navigant Technologies Pvt. Ltd. (2020) 197 PLR 468 the High Court of Punjab and Haryana observed as follows:

“7. As per Section 31 of the Act of 1996, an arbitral award shall be made in writing and shall be signed by the members of the arbitral Tribunal whereas clause 2 of Section 31 provides that with more than one arbitrator, the signatures of the majority so long as the reason for any omitted signature is stated. For ready reference relevant clauses of Section 31 are extracted as under:

‘31. Form and contents of arbitral award.

(1) An arbitral award shall be made in writing and shall be signed by the members of the arbitral tribunal.

(2) For the purposes of sub-section (1), in arbitral proceedings with more than one arbitrator, the signatures of the majority of all the members of the arbitral tribunal shall be sufficient so long as the reason for any omitted signature is stated.

xxxxx xxxxx xxxxx”

8. A reading of the Section clearly reflects that once an award is signed and communicated by the majority of the Arbitrators, the same would constitute an award. It is well settled that the minority ruling will not override the majority view nor can constitute the law…”

9. From the meticulous analysis of the case-laws referred to and from the examination of the statutory laws together with UNCITRAL Arbitration Rules, 2010, the legal proposition regarding the petitioner’s first contention that emerges is that while the award passed by a one-member arbitration tribunal must contain the sufficient reasonings with signature of the sole arbitrator, the tribunal consisted of more than two arbitrators must pass its award containing the sufficient reasoning for passing the award by the majority arbitrators with their signatures thereon and, if the minority arbitrator refrains from signing the award, it shall contain a statement thereto. The scheme of the law is that an arbitration tribunal’s proceedings and its ultimate outcome can not be jeopardized, spoiled or frustrated in any manner due to the non-availability of the minority arbitrator after his lawful participation in the arbitration proceedings or because of his unwillingness to sign on the award at the end of the arbitration. In that scenario, the only duty of the majority arbitrators to state the reason as to absence of the signature of the minority arbitrator.

10. While the dissenting minority arbitrator has the right not to sign on the award if he intends to write a separate award dissenting with the majority award, the best practice for the dissenting arbitrator, in my considered view, would be to append his write-up as a continuation of the majority award instead of writing the minority award on a separate piece of paper. However, in the event that the minority arbitrator does not write his verdict neither in the last part of the award passed by the majority arbitrators nor on a separate piece of paper despite being paid off his full honorarium, an aggrieved party may ask him to refund fully/partly the money paid to him by the said aggrieved party. But for the reason of non-delivery of a separate write-up by the minority arbitrator, the award is not rendered invalid and, thus, is not liable to be vitiated. It is to be jotted down here that an arbitration tribunal having been constituted as per the terms of the arbitration contract, the fees of the arbitrators are deposited immediately after formation of the tribunal by the parties under the provisions of Section 49(1) read with Section 38(7)(a) of the Arbitration Act. It has been an well-accepted practice that in a three-member arbitration tribunal, while each of the contesting party deposits the fees of their respective nominated arbitrator, the fees of the third arbitrator (who usually takes the seat of the Chairman of the arbitration) is equally shared by the two contesting parties with a promise that none of the parties shall seek any favour from any of the arbitrators i.e. all the arbitrators shall be allowed to perform their respective duties with full liberty and honesty, for, none of them are supposed to be partisan because of being chosen/appointed by a party of the arbitration.

11. Since formation of an arbitration tribunal is a private arrangement by two parties of a contract, thus, when an arbitrator is fully paid off his fees, it becomes a legal obligation for him to write his part of decision unless it is covered by the write-up of another arbitrator in that an arbitrator enters into a contractual relationship with the parties to the arbitration in consideration of certain amount of fees, firstly, for attending all the sessions of the arbitration and, secondly, for writing the decision/award individually or collectively at the end of hearing for the purpose of a full and fair completion of the arbitration. When an arbitrator finishes and leaves off arbitration without delivery of the findings and reasonings of the dissenting opinion/decision either in the last part of the majority award or in a separate sheet, s/he can not be considered to have performed the duty of an arbitrator, albeit it may not have the consequence of vitiating the proceedings of the arbitration.

12. In the event that the dissenting arbitrator avoids/fails to perform his obligation of recording his findings and reasonings, either party of the arbitration is well-competent to seek refund of the partial fees on the ground of being deprived of getting the findings and reasonings of the said arbitrator towards taking next legal step.

13. In a similar case, pursuant to making verbal observations by this Court on the same issue, the concerned arbitrator, somehow upon coming to know about this Court’s observations, informed the party, who had appointed him as the arbitrator, that he is willing to refund the full fees paid to him. But because of this Court’s subsequent intervention, the arbitrator escaped from refunding the money with a promise that he shall never repeat the same in future. In this case as well, at a certain phase of hearing, a direction upon the dissenting arbitrator Mr. Ajmalul Hossain QC was sought for refund of fees from him in a round-about manner by contending that it was the legitimate expectation of the GTCL that Mr. Ajmalul Hossain QC, having been nominated and fully paid off his fees of an amount of BDT 1,44,00,000/- (one crore forty four lacs), shall express his decision either by agreeing to the majority by appending his signature underneath the operative part of the decision or, alternatively, if he disagrees with the majority he is expected to deliver a full-fledged dissenting opinion and, by not doing so, Mr. Ajmalul Hossain QC has made the GTCL-petitioner confused as to why he has dissented with the “Award on Liability” but, later on, consented with the majority arbitrators on the ‘Award on Quantum’.

14. In order to deal with the above contention, I have endeavoured to find out as to whether there is any relevant findings or observations in the Awards in question, and I found in Paragraph 147 of the Partial Award (Final on Liability) the following observations “The tribunal will deal with the quantum issues, namely the claims of the Claimant with regards to damages as well as costs and interest in a further Award”. Accordingly, the arbitration tribunal issued “Partial Award (Final on Quantum)” on 15 May 2019 which had been signed by all the three arbitrators, including Mr. Ajmalul Hossain QC, with the following remarks;

“Although Mr. Ajmalul Hossain QC gave a dissenting Award on liability, and, without prejudice to such dissent on liability, he agreed with the following conclusions of the majority on quantum that the approach followed is the correct approach and conclusion for assessing loss and damage for breach of contract.”

54. From the above-quoted statements of all the three arbitrators, it transpires that Mr. Ajmalul Hossain QC had, in fact, given a dissenting award. But from the GTCL’s affidavit, it appears that Mr. Ajmalul Hossain QC has never written any dissenting award. Be that as it may, after hearing the parties on this particular issue it has been commented by me in the open Court that since this Court highly regards Mr. Ajmalul Hossain QC who is known to all as one of the charismatic and knowledgeable Senior Advocates of the Supreme Court of Bangladesh, it is embarrassing for this Court to make any adverse remarks on his performance as an arbitrator of the instant arbitration, let alone pass any direction upon him to refund the fees paid to him. It is for the GTCL-petitioner to honourably deal and settle the issue with him.

55. In the present case, the Partial Award (Final on Liability) dated 28 December 2018 states the reasons for the absence of the signature of the said arbitrator Mr. Ajmalul Hossain QC, which have been quoted hereinbefore and it is, thus, abundantly clear that the reasons stated in the award in the present case regarding absence of the signature of the said arbitrator is consistent with the requirements under Section 38(2) of the Arbitration Act and, accordingly, the first count of submissions made by the learned Advocate for the petitioner-GTCL has no basis whatsoever. Therefore, the award in question can not be set aside on the aforesaid ground.

56. I may now embark upon the other grounds taken by the learned Advocate for the GTCL-petitioner, namely, (i) that coming to the conclusion by the tribunal that it was not the duty of the contractor to enquire about the Desk Study is clearly a misreading and misconstruction of the materials before it resulting in a perverse findings of facts, (ii) whether the tribunal has disregarded the provisions of the law of contract by ignoring the express and binding terms of the contract in relying on the evidence of the experts, (iii) that the tribunal has passed the award on the basis of an issue which had never been agitated by the contractor to the employer at any point of time till filing of the Claimant Bundle in the tribunal and (iv) that the tribunal has passed the award on the basis of a dispute which was waived by the employer and, as such, can not be the subject matter of an arbitration.

57. The learned Advocate for the GTCL-petitioner seeks to invoke Section 43(1)(b)(ii) of the Arbitration Act, which has already been quoted hereinbefore (“the arbitral award is prima facie opposed to the law for the time being in force in Bangladesh”), and from a bare reading of Section 43(1)(b)(ii) of the Arbitration Act, it appears that an award passed by the arbitration tribunal may be set aside, if this Court is satisfied that any law of Bangladesh has been infringed in passing the award. Given that it is the law of this land that any perverse finding of fact is liable to be set aside, this award may be set aside upon being satisfied that the findings of facts arrived at by the tribunal are perverse. Generally, perverse means deviating from what is considered right or good or fair or equitable. According to Black’s Law Dictionary, the word ‘perverse’ means ‘doing the opposite of what a reasonable person might be expected to do’. And, in legal parlance ‘perverse findings’ mean findings of facts based on misreading or misconstruction or non-consideration of evidence/materials on record. There is a plethora of decisions of our Apex Court that even when a statute makes the verdict of a trial Court or appellate Court final, the findings of facts arrived at by it are not immune from interference by the High Court Division in exercising its revisional jurisdiction, writ jurisdiction or any special jurisdiction, if misreading or misconstruction or non-consideration of the material evidence on record causes failure of justice.

58. Now, let me see whether there has been any misreading or misconstruction or non-consideration of materials on record in the tribunal’s findings of facts, so as to say that the same are perverse resulting in failure of justice.

59. Oral evidence of the two witnesses and the following documents/materials were relied upon by the tribunal to pass/make the awards in question:

(i) The Contract Agreement and the Appendices thereto;

(ii) Letter of Price Bid and Price Schedules submitted by the Contractor;

(iii) Letter of Technical Bid and Technical Proposal submitted by the Contractor;

(iv) Special Conditions of Contract (“SCC”);

(v) General Conditions of Contract (“GCC”);

(vi) Specifications (vii) Drawings;

(viii) Other completed Bidding Forms submitted with the Letters of Technical and Price Bids; and

(ix) Any other documents forming part of the Employer’s Requirements (together referred to as the “Contract Documents”).

60. From a minute perusal of the Award on Liability, it appears to this Court that at the trial, out of the above-mentioned materials, the GTCL-petitioner sought to make out its case on the basis of the following provisions of documents/material of the contractor:

(i) The Letter of Technical Bid dated 27 October 2009 by the contractor containing the following statements;

“We, the undersigned, declare that:

(a) We have examined and have no reservations to the Bidding Documents, including Addenda issued in accordance with Instructions to Bidders (ITB) 8;

(b) We offer to design, procure, install, test, tie-ins and commission in conformity with the Bidding Documents the following works: Installation of 30” OD High Pressure Natural Gas Pipeline by Horizontal Directional Drilling (HDD) Method Across The Padma River on Design, Procurement, Supply, Installation Testing and Commissioning on Turnkey Basis (Group-A)".

(ii) The Work Plan for HDD River Crossing in the Tender Proposal, which is reproduced below:

“Prior to construction a process of detailed survey, engineering and design work must be conducted in cooperation between Employer and Contractor. A clear understanding of existing site conditions and all possible factors that may influence project implementation must be assessed…”

(iii) The Work Plan for Construction of Pipeline and Related Facilities in the Tender Proposal states as follows:

“…Necessary soil survey including geotechnical investigations will be undertaken for ascertaining the conditions of the river bed immediately after the signing of the Contract so that the final design of the pipeline to install across the river can be undertaken…”

(iv) CLAUSE 7 : OBLIGATION TO EXAMINE THE SITE:

Section 1, Clause 7 of the Instruction to Bidders of the Bidding Documents was relied upon by the GTCL-petitioner to establish that the site visit should have alerted the contractor who is an expert in the field of HDD river crossing of the need to obtain information about the bridge and the embankment and also that if a Desk Study was required under the contract, the obligation was on the contractor before the commencement of the works. The provision is relied upon to establish that the bidder is expected to examine all instructions, forms, terms and specifications in the Bidding Documents and that the employer was not responsible for the completeness of the Bidding Documents and its addenda.

Clause 7 provides as follows:

“The bidder is advised to visit and examine the site where the plant is to be installed and its surroundings and obtain for itself on its own responsibility all information that may be necessary for preparing the bid and entering into a contract for the provision of plant and services. The cost of visiting the site shall be at the Bidder’s own expense.”

(v) CLAUSE 9.2 OF THE GCC:

The employer next cites Clause 9.2 of the GCC where it is stated that the contractor confirms that it has entered into the contract “on the basis of a proper examination of the data relating to the Facilities including any data as to boring tests provided by the employer”. In addition, pursuant to the last sentence of Clause 9.2 of the GCC, the contractor acknowledges that “any failure to acquaint itself with all such data and information shall not relieve its responsibility for properly estimating the difficulty or cost of successfully performing the Facilities”.

(vi) UNFORESEEN CONDITIONS:

Clause 35 of the SCC, which relates to ‘Unforeseen Conditions,’ provides as follows:

“the contractor shall be deemed to have obtained all necessary information as to the risks, contingencies and all other circumstances that may arise during the execution of the contract. Due to unforeseen condition the time for completion may be extended but no extra costs involvement (if any) shall be considered by the employer.”

(vii) CLAUSES 34.1 AND 34.1(B) OF THE GCC & APPENDIX 3-INSURANCE REQUIREMENTS:

The GTCL-petitioner has also cited Clauses 34.1 and 34.1(b) of the GCC and Appendix 3-Insurance Requirements to assert that all risks in relation to the contract were squarely placed on the contractor. Clause 34.1 requires the contractor to maintain insurances specified in the sub-clauses to clause 34.1. Clause 34.1(b) provides for the contractor to take out an Installation All Risks Cover covering “physical loss or damage to the facilities at the site, occurring prior to completion of the facilities, with an extended maintenance coverage for the contractor’s liability in respect of any loss or damage during the defect liability period while the contractor is on the site for the purpose performing its obligations during the defect liability period.”

(viii) CLAUSES 7.1 AND 7.2 OF THE GCC ETC:

The GTCL-petitioner has also cited Clauses 7.1 and 7.2 of the GCC read with Clauses 9.1 and 9.2 of the GCC, Clause 9.9 of the SCC, Clause 20.1.1 of the GCC and Clauses 23.2, 23.3, 23.4 of the GCC to assert that the contractor was bound by express provisions to duly carry out the soil investigation and to complete the Turnkey Project.

(ix) CONTRACTOR’S OBLIGATION UNDER A TURNKEY CONTRACT:

The GTCL-petitioner has emphasized on the title to the contract “Installation of 30” OD High Pressure Natural Gas Pipeline by Horizontal Directional Drilling (HDD) Method Across Padma River on Design, Procurement, Supply, Installation, Testing and Commissioning on Turnkey Basis".

61. The above-mentioned preponderances of provisions of the contract-documents were brushed aside by the tribunal because of a report prepared by the employer’s agent named Delta Design of Construction Engineers (DDCE report) which states that “The field investigation was carried out in accordance with British Standards BS 5930…”. The DDCE report was supplied to all the bidders as a part of the bidding Documents.

62. BS 5930 (Section 9.2) states that:

“Before commencing the ground investigation all relevant information collected from the sources discussed in Section 1 (i.e. the desk study) should be considered, in order to form a preliminary view of the ground conditions….. A ground investigation should be conducted as an operation of discovery……. On many occasions especially on large or extended sites, a preliminary investigation is necessary in order that the main investigation may be planned to best advantage.”

(underlined by me)

63. In passing the award in favour of the contractor, the tribunal, then, sought to be emboldened by the evidence of two witnesses, namely, Dr. Eqramul Hoque, the GTCL’s expert witness and Mr. Robert Mackean, the contractor’s expert witness who in their Joint Statement dated 14th of December 2016, under “Principle and Overarching Agreement” stated that a ‘Desk Study’ should have been done and that the fundamental reason for the failures that occurred was the lack of a Desk Study.

64. The tribunal accordingly found that the GTCL-petitioner, having misrepresented the contractor that it had carried out a field investigation in accordance with British Standards BS 5930, which would have included a Desk Study, when no such Desk Study had been undertaken, is clearly responsible for the loss and damage sustained by the contractor as a result thereof. Had there in fact been compliance with BS 5930 and had a Desk Study been carried out, then it would have immediately become apparent that there was an obstruction and that the HDD Alignment could not be constructed at anywhere even close to a “minimum 20 metre depth” and the contractor would not have encountered the problems which it did of digging at increasing depths until it found a way through.

65. So, the sole basis of making the awards in favour of the contractor is the one statement (out of hundreds of statements made by the parties in their respective contract-documents), namely, ‘the field investigation was carried out in accordance with British Standards BS 5930’, made by the employer’s agent DDCE in the survey report prepared by it. Form a minute perusal of the relevant Section of BS 5930 (being Section 9.2), it appears to this Court that carrying out a ‘Desk Study’ is not a mandatory task for an employer for undertaking such projects inasmuch as the expressions used therein are ‘………the sources discussed in Section 1 (i.e. the Desk Study) should be considered,…..). Had it been a mandatory rule, the word “shall” would have been employed by the maker of the aforesaid provisions. There is no gainsaying that had the ‘Desk Study’ been done, the existence of the manmade obstructions would have been revealed, as opined by the expert witnesses with which this Court is in full agreement. However, the pivotal point ought to have been considered by the tribunal as to (i) who was responsible for carrying out Desk Study under a ‘Turnkey’ contract, (ii) whether the statement made by the employer’s agent DDCE as to carrying out of the Desk Study is the sole reason for failure to complete the project by the contractor, (iii) whether was it not a part of using/applying common sense/due diligence to enquire about the relevant papers of the Hardinge Bridge (i.e. Desk Study) from the employer, either at the time of dropping the tender or immediately after encountering sub-surface obstruction for the first time and (iv) whether statements made by the contractor as to possessing specialization and having planetary experience in handling the type of project in question (i.e. setting up of OD High Pressure Natural Gas Pipeline for crossing a deep river through HDD method) was a misrepresentation by the contractor to the employer and the same was responsible for failure of the project.

66. The question that has not judiciously been dealt with and adjudicated upon by the tribunal is that since the contractor was selected/chosen by the employer for the project relying on the contractor’s expertise and specialization in these sort of projects; and since the DDCE report was prepared in the year 2009 not only for this specific project (as it appears from the ‘Drawings’ material No. vii of the contract-document) but also for other projects of the entire south and north zone of Bangladesh, it was a reasonable and legitimate expectation from such a highly specialized and internationally reputed contractor that it would inquire about ‘Desk Study’ from the GTCL after visiting the site, by which the existence of Hardinge Bridge was known. The fact that Harding Bridge is located within the vicinity of the project, it ought to have been a commonsense-derived query from the contractor to the employer about the relevant papers (i.e. Desk Study) of the Hardinge Bridge before dropping the tender. Even when the contractor was encountering the sub-surface obstructions for the first time, it was the contractor’s obligation to ask for the relevant papers (Desk Study) of the Hardinge Bridge from the GTCL; rather without making any endeavour to obtain the relevant papers, going for second drilling demonstrates the in competency of the contractor. And, in that sense, the contractor misrepresented to the employer that it is a highly specialized company in this sector. As per the deposition of the expert witness Professor Dr. Eqramul Hoque of Bangladesh University of Engineering and Technology (BUET), In Turnkey/EPC Contract (e.g. ENAA model for Turnkey Lump-sum Basis, FTDIC ‘Silver Book’ Contracts), a contractor is given full responsibility to investigate, plan, detailed design, construct and handover something that the client must be able to use as soon as it is finished without needing to do any further work. The employer only provides certain basic technical requirements of the project and it is the responsibility of the contractor to investigate and acquire all the basic information necessary for engineering design, then to do the detail engineering design, procure (relevant equipment/machinery and service), construct, commission and then finally handover the project to the client. In a turnkey contract, thus, it is for the contractor to do everything on its own responsibility in that the terminology ‘turnkey project’ means the ‘turn of the key’ with the hope of having a positive result about completion of the project and, only after obtaining a positive result, the contractor will be paid off the agreed price by the employer. That is to say, a turn key project is a type of project which is constructed by a contractor/developer and, then, the same is sold/turned over to a buyer (employer) in a ready-to-use condition. Therefore, in this turnkey contract, there was no obligation on the part of the employer (GTCL-petitioner) to furnish any document of construction work of the Hardinge Bridge (i.e. to carry out the Desk Study). It was the obligation of the contractor to ask for these information from the employer under this turnkey contract. So, the findings of fact by the tribunal appears to this Court to be perverse causing failure of justice.

67. More importantly, the allegation of misrepresentation was never raised by the contractor at any point of time during the subsistence of the contract in question i.e. from the time of entering into contract on 10.08.2010 till the date of termination of contract on 25.03.2015. So, in that sense, the issue of misrepresentation was not a dispute among the parties of the arbitration. From a minute perusal of the awards in tandem with the materials which were placed before the arbitral tribunal, it transpires that the core finding of fact arrived at by the tribunal is that the employer has misrepresented the contractor by not supplying the information regarding manmade material deposited during the construction of the Hardinge Railway Bridge. However, none of the correspondences between the employer and the contractor disclose, or even indicate, that the contractor has ever raised this issue to the employer; surprisingly not even the arbitration notice contains a single word about the alleged misrepresentation by the employer. The case of misrepresentation was made out by the contractor only in the ‘Claimant Bundle’ (contractor’s Statement of Claim) filed in the tribunal. The apparent grievances-turned-disputes between the parties were: firstly, obtaining an All Risk (CAR) policy (i.e. insurance) or, in the alternative, taking over the risk of soil conditions by the employer in order to commence third drilling for engaging the Chinese sub-contractor ‘China Petroleum Pipeline Bureau’ (CPP) who had assured to complete the works and, secondly, the employer’s refusal to pay additional costs under the Supplementary Agreement prepared by the contractor chalking out a Work Method Statement (WMS) based on the “As-built drawing” of the Pakshi Bridge. And, in fact, as it appears from the materials on record, the contractor eventually came to know from the relevant papers of the Hardinge Bridge supplied by the employer that some sort of heavy constructions works underneath the soil surface of around 60 feets had been done during the construction of the Hardinge Bridge and, thereafter, without raising any allegation of misrepresentation as to making statement of carrying out the Desk Study, the contractor opted to negotiate with the employer about the above-mentioned two disputes. So, from that point of view, it appears to this Court that the contractor has waived the issue of making a misstatement by the employer’s agent (DDCE) in its survey report (DDCE report).

68. Had the allegation of misrepresentation been raised by the contractor during subsistence of the contract, the employer could have considered it and the same might have been dealt with amicably in a positive manner in order to save the huge expenditures of arranging this international arbitration at the expenses of nearly Taka 5 (five) crore. The issue of misrepresentation having not been raised by the contractor, the GTCL-petitioner’s case falls within the purview of the ground under sub-Section (1)(a)(iv) of Section 43 of the Arbitration Act (i.e. arbitral award deals with a dispute not contemplated by……."), reading of which gives an understanding that an arbitration tribunal is not competent (i) to deal with a subject which has never been a dispute, (ii) which has not been submitted to the arbitration and (iii) which is beyond the scope of submission to arbitration. It means that it shall be illegal for the arbitral tribunal to adjudicate upon a subject/issue which has not been raised by one of the parties of the contract as a dispute to other party at any point in time i.e. from right after the time of entering into contract up to the time of serving arbitration notice. Therefore, the tribunal was not competent to deal with the issue of misrepresentation.

69. Moreover, from the manner and pattern of dealings and transactions among the parties to the contract, it appears to this Court that the employer had always been collaborative and helpful to the contractor with regard to (i) extension of time of the contract period, (ii) providing further information about the river and the embankment, including the relevant papers of Hardinge Bridge and (iii) approval of the Chinese sub-contractor (CPPB) who had assured to complete the unfinished job at its own risk. But it is the contractor who decided not to engage the aforesaid Chinese sub-contractor and claimed for compensation of US$ 20.54 million from the employer. While the contractor claimed an amount of US$ 20.054 million from the employer, the contractor could have easily minimized the cost had they availed of the proposal proposed by the contractor’s nominated sub-contactor (CPPB). In the letter dated 27.12.2013, the CPP categorically stated that “CPP will carry out the survey and repay the survey cost to be incurred, and then Drilltec will pay the survey cost if CPP decide to perform the crossing. Otherwise, the survey fees will be at CPP’s cost. If CPP performs the crossing by HDD but fails, CPP’s expenses for this crossing will be at our cost.” This clearly stipulates the fact that the contractor would have had zero risk factor and if successful, the cost of crossing the river through HDD method would have been 9.97 million as quoted by CPPB. However the contractor rejected the proposal made by their nominated sub-contractor, CPPB. It appears from the materials on record that CPPB in a subsequent bid successfully completed the HDD project as contractor.

70. The very fact that a Chinese company (CPPB) was able to assess the cause of encountering sub-surface obstacles within a few days without even looking at the relevant papers of the Hardinge Bridge (i.e. without any Desk Study), by simply visiting the project site in addition to gathering other information, thus, any one with ordinary prudence would find the contractor to be of lacking specialist knowledge in this sector and to be not competent enough to undertake a turnkey project of this nature. It is evident from the evidence on record that the contractor was supposed to hand over this turnkey project before May, 2013. And, had the contractor not misrepresented as to possessing specialist knowledge and having vast experience in the sector, the project would have been finished well within the time and, thereby, the GTCL-petitioner (i.e. this country) could have saved its money.

71. This Court further finds from the materials on record that the employer was mindful to lessen the loss of the contractor after termination of the contract on 25.03.2015, by accepting the contractor’s proposal to purchase the welded, coated and tested HDD pipe string, which was lying at the site of the project, at a very fair and reasonable cost of Taka 19,21,32829.21 (Nineteen crore twenty one lac thirty two thousand eight hundred twenty nine taka and twenty one paisa).

72. This Court, therefore, does not find any negligence on the part of the employer (GTCL-petitioner) in dealing with the contractor, let alone making any misrepresentation by the former to the latter and, thus, no question of compensating the contractor arises in the arbitration.

73. Resultantly, this Rule is made absolute and, accordingly, all the awards in question passed by the tribunal are set aside. However, there shall not be any order as to cost.

74. Office is directed to supply (i) a copy of this Judgment to the Hon’ble Minister of Law, Justice and Parliamentary Affairs and (ii) a copy to the Cabinet Secretary for their kind perusal and consideration as to putting the word ‘or’ at the end of each of the Clauses and sub-Clauses of Section 43(1) of the Arbitration Act and, also, for their consideration as to issuance of ‘Official Circular/Directives’ for the different ministries to incorporate the provisions of the Arbitration Act as the Rules for conducting arbitrations with foreign counterparts at the time of execution of contracts.