[1st Justice Radhabinod Pal National Memorial Moot Court Competition]

TC-32‘R’

1st EDITION JUSTICE RADHABINOD PAL NATIONAL MEMORIAL

MOOT COURT COMPETITION DEPARTMENT OF LAW, UNIVERSITY
OF CALCUTTA

Before

HON’BLE SUPREME COURT OF INDUSTRIA

ORIGINAL CIVIL JURISDICTION

ARB.PET. 204 OF 2024

NATIONAL HIGHWAYS AUTHORITY OF INDUSTRIA….PETITIONER

v.

BOB BUILDERS CORPORATION LIMITED……….…….RESPONDENT

SPECIAL LEAVE PETITION FILED UNDER ARTICLE 136 OF

CONSTITUTION OF INDUSTRIA

WRITTEN PLEADINGS ON BEHALF OF PETITIONER

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Table of Contents
Index of Abbreviations ................................................................................................................. 4

Table of Cases ................................................................................................................................ 5

Statutes ........................................................................................................................................... 8

Books and Commentaries ............................................................................................................ 8

STATEMENT OF JURISDICTION............................................................................................ 9

STATEMENT OF FACTS .......................................................................................................... 10

STATEMENT OF ISSUES ......................................................................................................... 13

SUMMARY OF ARGUMENTS ................................................................................................ 14

ARGUMENTS ADVANCED ..................................................................................................... 16

Issue 1 In view of an express provision of Appeal under the Arbitration Act, whether the
Special Leave Petition filed by NHAI is maintainable? ...................................................... 16

1.1 The jurisdiction under Article 136 of the Constitution of Industria is extraordinary,
discretionary, and to be exercised sparingly. ...................................................................... 16

1.2 The Doctrine of Exhaustion of Alternative Statutory Remedies and Judicial self-
restraint bars the SLP. .......................................................................................................... 18

1.3 The Arbitration and Conciliation Act, 1996 is a self-contained code with limited and
specific appellate provisions. ............................................................................................... 19

1.4 An express statutory remedy of appeal under Section 37 of the Arbitration act was
available to NHAI. ............................................................................................................... 20

Issue 2 Insofar as the question of termination of the Agreement and the claim for damages
is concerned; whether the High Court has rightfully upheld the Award? ......................... 22

2.1 Award not liable to be set aside as per Section 34 of 1996 Act. .................................... 22

2.2 The Award is Perfectly Legal, Reasonable & Sound. ................................................... 26

Issue 3 Does the power to set aside the Award under Section 34 of the Arbitration Act
include the power to modify the Award? As such, did the High Court travel beyond its
scope while modifying the Award to allow the levy of interest? ......................................... 29

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3.1 Power to set aside the Award includes the Power to Modify the Arbitral Award. ........ 29

3.2 The High Court of Dragonstone rightly modified the Award. ..................................... 31

Issue 4 In the given factual conspectus, do recent events render the dispute non-
arbitrable? ............................................................................................................................... 32

4.1 The dispute is purely contractual. ................................................................................. 33

4.2 The Doctrine of separability saves the arbitration agreement ..................................... 35

Issue 5 Whether the Award is liable to be set aside as being against the public policy of
Industria? ................................................................................................................................ 38

5.1 The public policy is an unruly horse and to vague to be relied upon. ......................... 38

5.2 The award is consistent with the public policy test as recognized by this Court. ........ 40

PRAYER ...................................................................................................................................... 43

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Index of Abbreviations
Abbreviation Meaning
1996 Act The Arbitration and Conciliation Act, 1996
A.P. Andhra Pradesh
AIR All India Reporter
Arbitration Act The Arbitration and Conciliation Act, 1996
BBCL [Respondent]
C.C.E. Central Excise
Co. Company
etc. et cetera (and so on)
G.O. Government Order
H.P. Himachal Pradesh
i.e. id est (that is)
J. Judge
Ltd. Limited
Mr. Mister
Ms. Miss/Mrs.
NHAI [Petitioner]
Ors. Others
Para Paragraph
Pte. Private
SC Supreme Court
SCC Supreme Court Cases
SLP Special Leave Petition
Supp Supplement
UOI Union of India
UNCITRAL United Nations Commission on International Trade Law
v. versus
viz. videlicet (namely)

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Table of Cases
S. No. Case Name Citation
1 A. Ayyasamy v. A. Paramasivam (2016) 10 SCC 386
2 Abdul Kadir Shamsuddin Bubere v. Madhav 1962 AIR 406
Prabhakar Oak
3 Ahmedabad St. Xavier College Society v. State of (1974) 1 SCC 717
Gujarat
4 Airport Authority of India v. S.N. Malhotra and Sons 2002 (Supp) Arb LR 495 (Del.)
5 Associate Builders v. DDA 2015 (3) SCC 49
6 Associated Provincial Picture House v. Wednesbury (1947) 2 All ER 74 (CA)
Corporation
7 Avitel Post Studioz Ltd. v. HSBC PI Holdings 2020 SCC OnLine SC 656
(Mauritius) Ltd.
8 BGS SGS Soma JV v. NHPC Ltd. (2020) 4 SCC 234
9 Bharat Coking Coal Ltd. v. Karam Chand Thapar & AIRONLINE 2002 SC 126
Bros. Pvt. Ltd.
10 Booz Allen & Hamilton Inc. v. SBI Home Fin. Ltd. (2011) 5 S.C.C. 532
11 Brahmaputra Infrastructure Ltd. v. Assam Vegetable (2021) 09 GAU CK 0008
and Oil Products Ltd.
12 C.C.E. v. Standard Motor Products AIR 1989 SC 1298
13 Central Inland Water Transport Corp. v. Brojo Nath 1986 AIR 1571
Ganguly
14 Coastal Andhra Pradesh Power Ltd. v. APCPDCL (2019) 256 DLT 764(DB)
15 Continental Grain Export Corp. v. T.M. Grain Ltd
16 Danda Rajeshwari v. Bodavula Hanumayamma and (1996) 6 SCC 199
Others
17 Dhakeswari Cotton Mills Ltd. v. Commissioner of AIR 1955 SC 65
Income Tax, West Bengal
18 Dharam Chand Soni v. Sunil Kumar Chakrabarty AIR 1981 Cal 323, 324

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19 Dharmendra Kirthal v. State of U.P. (2013) 1 SCC 197

20 Dinanath Damodar Kale v. Malvi Mody Ranchhoddas AIR 1930 Bom 213
21 Durga Shankar Mehta v. Raghuraj Singh AIR 1954 SC 520
22 Enercon (India) Ltd. v. Enercon GmbH (2014) 5 SCC 1
23 Energy Watchdog v. Central Electricity Regulatory 2017 (4) Scale 580
Commission
24 Esher Singh v. State Of A.P (2004) 11 SCC 585
25 Fateh Chand v. Balkishan Das AIR 1963 SC 1405
26 Fuerst Day Lawson Ltd. v. Jindal Exports Ltd. (2011) 8 SCC 333
27 Geo Pictures Ltd. v. Neelakandaru Gopalkrishnaru AIR 1971 Ker 274
28 Gherulal Parakh v. Mahadeodas Maiya and others [1959] Supp. 2 SCR 406
29 Gurnam Singh v. State of Punjab (2011) 164 PLR 450
30 Hind Construction Contractors v. State of Maharashtra AIR 1979 SC 720
31 Hindustan Zinc Ltd v. Friends Coal Carbonisation (2006) 2 Arb LR 20
32 Jamshed Hormusji Wadia v. Board of Trustees, Port of AIR 2004 SC 1815
Mumbai and Another
33 K.K. Patel v. State of Gujarat (2000) 6 SCC 195
34 Kandla Export Corporation v. OCI Corporation (2018) 14 SCC 715
35 Kitiku Imports Trade Private Limited v. Savitri Metals 1999 (2) Arb LR 405(Bom)
Limited
36 Krishna Bhagya Jala Nigam Ltd v. G. Harishchandra AIR 2007 SC 817
Reddy
37 Kunhayammed v. State of Kerala (2000) 6 SCC 359
38 Lekh Singh v. Dwarka Nath AIR 1929 Lah 249
39 Lloyd’s Handelsgesellschaft mbH v. Fingrain SA
40 Mahadeoprasad v. Siemens (India) Ltd. AIR 1934 Cal 285
41 Maya Devi v. Lalta Prasad (2015) 5 SCC 588
42 Mcdermott International Inc v. Burn Standard Co Ltd (2006) 11 SCC 181
43 NHAI v. M. Hakeem (2021) 10 SCC 123

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44 National Agric. Coop. Mktg. Fed’n of India Ltd. v. (2007) 5 SCC 692 (India)
Gains Trading Ltd.
45 Nivedita Sharma v. Cellular Operators Association of (2011) 14 SCC 337
India
46 ONGC Ltd. v. Saw Pipes Ltd. (2003) 5 SCC 705
47 Oil & Natural Gas Corp. Ltd. v. Saw Pipes Ltd. (2003) 5 SCC 705
48 Pawan Kumar Gupta v. Rochiram Nagdeo (1999) 4 SCC 243
49 Pritam Singh v. The State AIR 1950 SC 169
50 Rashid Raza v. Sadaf Akhtar [(2019) 8 S.C.C. 710]
51 Renusagar Power Plant Co. Ltd. v. General Electric 1994 Supp (1) SCC 644
Company
52 Richardson v. Mellish (1824) 2 Bing 229
53 Rupa Ashok Hurra v. Ashok Hurra & Anr. AIR 2002 SC 1771
54 S.B.P. & Co v. Patel Engineering Ltd (2005) 8 SCC 618
55 Sheodutt v. Pandit Vishnudutta AIR 1955 Nag 126
56 Shree Hanuman Cotton Mills v. Tata Air Craft Ltd. AIR 1970 SC 1986
57 Sri Krishna Agencies v. State of A.P. and Ors. [(2009) 1 SCC 69.]
58 Ssangyong Engineering & Construction Co. Ltd. v. AIR 2019 SC 5041
NHAI
59 State of H.P. v. Gujarat Ambuja Cement Ltd. (2005) 6 SCC 499
60 State of Rajasthan v. Kishanlal [1997] 2 SCC 281
61 State of Uttar Pradesh v. Mohammad Nooh AIR 1958 SC 86
62 Swetambar Sthanakwasi Jain Samiti v. R.J.I College, (1996) 3 SCC 11
Agra
63 Tata Hydro Electric Power Supply Co Ltd v. UOI (2003) 4 SCC 172
64 UOI v. Arctic India (2007) 4 Arb LR
65 UOI v. Kishori Lal Gupta & Bros. AIR 1959 SC 1362
66 UOI v. Modern Laminators (2008) 3 Arb LR 489
67 UOI v. Moti Enterprises 2003 (2) Arb LR 229 (Bom.)
68 UOI v. Rampur Distillery and Chemicals Co. Ltd. AIR 1973 SC 1098

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69 Union Of India v. S.B Vohra and Others (2004) 2 SCC 150

70 Vidya Drolia v. Durga Trading Corp [(2021) 2 SCC 1]
71 West Bengal State Warehousing Corp. v. Sushil Kumar (2022) 5 SCC 679
Kayan
72 Western Geco International Ltd. AIR 2015 SC 363
73 World Sport Group (Mauritius) Ltd. v. MSM Satellite (2014) 11 SCC 639
(Singapore) Pte. Ltd.

Statutes
1. The Constitution of Industria para materia with the Constitution of India
2. The Industria Arbitration Act 1899 para materia The Indian Arbitration Act, No. 9 of 1899,
INDIA CODE (1899)
3. The Arbitration Act, 1940 para materia The Arbitration Act, No. 10 of 1940, INDIA CODE
(1940).
4. The Arbitration and Conciliation Act, 1996 para materia The Arbitration and Conciliation
Act, No. 26 of 1996 (India)
5. The Industria Contract Act para materia The Indian Contract Act, No. 9 of 1872
6. The Commercial Courts Act, No. 4 of 2016, INDIA CODE (2016).
Books and Commentaries
1. M.P. Jain, Indian Constitutional Law 303 (8th ed., LexisNexis 2018).
2. Russell, Russell on Arbitration 110 (20th ed. 1982).
3. N. Redfern & M. Hunter, Law and Practice of International Commercial Arbitration (6th
ed. 2015).
4. Black’s Law Dictionary (Bryan A. Garner ed., 10th ed. 2014).
5. H.G. Beale, Chitty on Contracts, vol. 1 (35th ed. 2012).
6. R.S. Bachawat, Law of Arbitration and Conciliation vol. 1, (Anirudh Wadhwa & Anirudh
Krishnan eds., 6th ed. 2017).
7. C.R. Dutta, Law of Arbitration and Conciliation (H.L. Kumar ed., 4th ed. 2013).

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STATEMENT OF JURISDICTION

The Petitioner approaches the Hon'ble Supreme Court under Article 136 of the Constitution of
Industria.

Article 136:

(1). Not with standing anything in this Chapter, the Supreme Court may, in its discretion, grant
special leave to appeal from any judgment, decree, determination, sentence or order in any cause
or matter passed or made by any court or tribunal in the territory of India

(2). Nothing in clause (1) shall apply to any judgment, determination, sentence or order passed
or made by any court or tribunal constituted by or under any law relating to the Armed Forces.

However, the Council maintains the Right to challenge the maintainability of the present petition
filed by the petitioner.

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STATEMENT OF FACTS
Factual Background

The Republic of Industria

The Republic of Industria a developing nation with rapid economic growth because of liberalized
economic policies and increased foreign investments. Recently it has seen a surge in exports and
public infrastructure projects, pressuring legislative efforts to enhance the ease of doing business.
To address the backlog of cases in its civil and commercial courts and divide the workload, the
Parliament amended the Arbitration and Conciliation Act, 1996, reducing judicial interference in
arbitral awards and promoting arbitration as a method for resolving commercial disputes. This shift
reflects the countries ambition to become a global arbitration hub, aligning with the needs of its
business community and interested investors.

Political Background, Party Changes, and Suspicious Deaths

In 2017, the Socialist League of Industria (SLI) lost the general elections to the Democratic
Capitalist Party (DCP), led by Mr. Claudius Glaber, who assumed the office of Prime Minister.
The DCP launched ambitious infrastructure initiatives, including the Kings Road Project, in the
hopes to make Industria a superpower by 2027. However, in March 2022, the SLI regained power
under Mr. High Septon. After assuming the office of the prime minister, he directed CBI/ED
investigations into DCP members for corruption. On August 18, 2023, NHAI Chairman Mr. Peter
Russo resigned, followed by Ministry Secretary Ms. Zoe Barns. Days later, both were found dead
under mysterious circumstances—Russo on August 27, 2023, in his apartment, and Barns on
August 28, 2023, near New Kings Landing Railway Station—prompting a police probe into their
deaths.

The Contract

On October 1, 2017, the National Highways Authority of Industria (NHAI) invited bids for the
Kings Road Project, an eight-lane expressway spanning 600 kilometres from Kings Landing to
Winterfell, valued at INR 1500 crores. Following a tender allotment process, NHAI awarded the
contract to Bob Builders Corporation Limited (BBCL) on December 27, 2017, under a Concession
Agreement. BBCL is led by CEO Mr. Troll, the brother-in-law of Prime Minister Glaber. The

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agreement was an Engineering Procurement and Construction (EPC) contract under a Build-
Operate-Transfer (BOT) model, granting BBCL a 15-year concession to design, build, operate,
and transfer the expressway. They signed the agreement with a security deposit of INR 150 crores.

Contract Dispute

The King’s Road Project was hindered at the start of 2020 due to a global pandemic, which led to
a nationwide lockdown in Industria. The lockdown caused a mass displacement of workers,
severely delaying progress of the Project. BBCL requested extensions from NHAI to complete the
‘first milestone’ but NHAI’s responses were vague, urging BBCL to accelerate work without
granting formal relief. Operations resumed in January 2022, but BBCL remained behind schedule.
On August 31, 2023, NHAI issued a notice to cure the breach within seven days, which BBCL
contested, citing pandemic-related delays. Despite a meeting on September 8, 2023, which came
to no conclusion, NHAI terminated the contract on September 9, 2023, and forfeited the security
deposit.

Arbitral Award

BBCL invoked arbitration under the Concession Agreement, where Mr. Peter Baelish was
appointed as the arbitrator, a retired High Court judge, as the sole arbitrator. BBCL challenged the
termination and forfeiture, claiming damages for idling costs and price escalation due to the
pandemic. NHAI defended its actions, arguing BBCL breached the agreement by missing
deadlines. On June 15, 2024, after nine months of proceedings, the arbitrator ruled in favour of
BBCL, categorising the termination and forfeiture wrongful. The award recognized that the
pandemic was a force majeure event, ordered the reinstatement of the contract, and directed NHAI
to pay damages for idling costs and price escalation. The arbitrator mentioned NHAI’s failure to
decide BBCL’s extension requests as a key factor in the ruling.

High Court Judgment

On June 17, 2024, NHAI challenged the arbitral award under Section 34 of the Arbitration Act
before the High Court of Dragonstone. The High Court, in its judgment on June 24, 2024, upheld
the award, agreeing that the termination of agreement and forfeiture were unjustified. However,
the court modified the award by adding 18% interest on the damages, in accordance with the terms

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of the Agreement executed between both the parties. This modification sparked further contention,
as NHAI argued it exceeded the court’s powers.

Additional Context and Supreme Court Appeal

On June 25, 2024, a leaked list from the Iron Bank of Quarth revealed accounts held by Mr. Russo
(INR 400 crores), Ms. Barns (INR 250 crores), and Mr. Baelish (no deposits), raising suspicion of
corruption which might be tied to the project. Public outrage ensued, leading to the arrest of Mr.
Troll and two BBCL directors on June 30, 2024, for bribery and money laundering, though they
secured bail the next day. On July 10, 2024, NHAI filed a Special Leave Petition (SLP) before the
Supreme Court, challenging the High Court’s decision on grounds including the award’s
correctness, the High Court’s modification powers, the dispute’s arbitrability amid fraud
allegations, and public policy violations. The Supreme Court admitted the SLP, framing five issues
for hearing on August 4, 2024.

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STATEMENT OF ISSUES

Issue 1 In view of an express provision of Appeal under the Arbitration Act, whether the
Special Leave Petition filed by NHAI is maintainable?

Issue 2 Insofar as the question of termination of the Agreement and the claim for damages is
concerned; whether the High Court has rightfully upheld the Award?

Issue 3 Does the power to set aside the Award under Section 34 of the Arbitration Act include
the power to modify the Award? As such, did the High Court travel beyond its scope while
modifying the Award to allow the levy of interest?

Issue 4 In the given factual conspectus, do recent events render the dispute non- arbitrable?

Issue 5 Whether the Award is liable to be set aside as being against the public policy of
Industria?

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SUMMARY OF ARGUMENTS
Issue 1 In view of an express provision of Appeal under the Arbitration Act, whether the
Special Leave Petition filed by NHAI is maintainable?
The Counsel for the respondent most humbly submits that the Special Leave Petition is not
maintainable and is ought to be dismissed in limine, because; Firstly, the jurisdiction under Article
136 of the Constitution of Industria is extraordinary, discretionary, and to be exercised sparingly.
Secondly, the doctrine of exhaustion of alternative statutory remedies and judicial self-restraint
bars the present SLP. Thirdly, the Arbitration and Conciliation Act, 1996 (hereinafter referred as
1996 Act or the Arbitration Act) is a self-contained code with limited and specific appellate
provisions. Fourthly, an express statutory remedy of appeal under Section 37 of the Arbitration
Act was available to NHAI.

Issue 2 Insofar as the question of termination of the Agreement and the claim for damages is
concerned; whether the High Court has rightfully upheld the Award?
The Counsel for the respondents most humbly submits before the Hon’ble Supreme Court of
Industria that the High Court’s judgement was absolutely correct, because; Firstly, the award is
not liable to be set aside as per Section 34 of the Arbitration and Conciliation Act, 1996. Secondly,
the award is perfectly legal, reasonable and sound.

Issue 3 Does the power to set aside the Award under Section 34 of the Arbitration Act include
the power to modify the Award? As such, did the High Court travel beyond its scope while
modifying the Award to allow the levy of interest?

The Counsel for the petitioners most humbly submits that; Firstly, the power to set aside the Award
under section 34 of Arbitration Act indeed include the power to modify the Award. Secondly, the
High Court of Dragonstone modified the award rightly to make it consistent with the Arbitration
and Conciliation Act, 1996.

Issue 4 In the given factual conspectus, do recent events render the dispute non- arbitrable?
The Counsel for the respondent most humbly submits before the Hon’ble Supreme Court that the
recent events do not render the dispute non arbitrable, because; Firstly, the dispute is purely
contractual. Secondly, the doctrine of severability saves the arbitration agreement.

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Issue 5 Whether the Award is liable to be set aside as being against the public policy of
Industria?

The Counsel for the respondents most humbly submits before the Hon’ble Supreme Court of
Industria that the award is not liable to be set aside as being against the public policy of Industria
because; Firstly, the public policy is an unruly horse and thus cannot be relied upon to test the
validity of an Award. Secondly, the award is consistent with the public policy as recognized by
this court.

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ARGUMENTS ADVANCED

Issue 1 In view of an express provision of Appeal under the Arbitration Act, whether the
Special Leave Petition filed by NHAI is maintainable?

¶ [1]. The Counsel for the respondent most humbly submits that the Special Leave Petition is not
maintainable and is ought to be dismissed in limine, because:
Firstly, the jurisdiction under Article 136 of the Constitution of Industria is extraordinary,
discretionary, and to be exercised sparingly.
Secondly, the doctrine of exhaustion of alternative statutory remedies and judicial self-restraint
bars the present SLP.
Thirdly, the Arbitration and Conciliation Act, 1996 (hereinafter referred as 1996 Act or the
Arbitration Act) is a self-contained code with limited and specific appellate provisions.
Fourthly, an express statutory remedy of appeal under Section 371 of the Arbitration Act was
available to NHAI.

1.1 The jurisdiction under Article 136 of the Constitution of Industria is extraordinary,
discretionary, and to be exercised sparingly.

¶ [2]. The BBCL foremost, humbly pleads to the Court that the power vested in this Hon’ble Court
under Article 136 of the Constitution of Industria2 to grant special leave to appeal is extraordinary,
discretionary, and plenary.3 It may also be appreciated that under Article 136, the litigants do not
enjoy the regular right to appeal vis-à-vis applicable otherwise under other statues, through which
they approach this court. However, it confers an extraordinary power and discretionary of the
widest amplitude on this Hon’ble Court to be exercised for meeting the ends of justice. 4

¶ [3]. This Hon'ble Court has consistently held that such power is to be exercised sparingly, with
caution and care, and only where there has been a grave miscarriage of justice or where a question
of law of general public importance arises, or to remedy extraordinary situations or situations
occasioning gross failure of justice.5

1
Arbitration and Conciliation Act, 1996, § 37, No. 26, Acts of Parliament, 1996.
2
India Const. art 136.
3
Durga Shankar Mehta v. Raghuraj Singh, AIR 1954 SC 520.
4
Kunhayammed v. State of Kerala, (2000) 6 SCC 359.
5
Dharmendra Kirthal v. State of U.P., (2013) 1 S.C.C. 197.

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¶ [4]. In Pritam Singh v. The State6, it was laid down that special leave will not be granted unless
there are exceptional and special circumstances, and that this Court would not interfere with the
decisions of lower courts if there is no grave injustice.

¶ [5]. Similarly, in Dhakeswari Cotton Mills Ltd. v. Commissioner of Income Tax, West Bengal7,
this Hon'ble Court observed that Article 136 of the Constitution of Industria should be invoked
when a substantial and grave injustice has been done. This Court, in State of Rajasthan v.
Kishanlal8, reiterated the extraordinary nature of its jurisdiction under Article 136, stressing that
it is to be exercised sparingly and only in cases of grave injustice.

¶ [6]. The broad discretionary power conferred by Article 136, emphasizes its extraordinary nature
and the need for fair procedural adherence.9 Further, in Union of India and another v. S.B Vohra
and others,10 this Court discussed the limitations of its powers under Article 136 and emphasised
that it should intervene only in exceptional cases.

¶ [7]. In Mathai v George11 this Hon'ble Court laid down the following illustrative circumstances
under which power under Article 136 of the Constitution of Industria could be exercised: a) All
matters involving substantial questions of law relating to the interpretation of the Constitution of
India; b) All matters of national or public importance; c) Validity of laws, Central and State; c) To
settle differences of opinion on important issues of law between High Courts; d) Where the Court
is satisfied that there has been a grave miscarriage of justice; and e) Where a fundamental right of
a person has prima facie been violated.

¶ [8]. The respondent BBCL, also summarises the argument above with a proposition that regular
use of Article 136 to accept petitions of the nature as claimed by the Petitioner here, may reduce it
to an ordinary provision of appeal devoid of its special characteristics and diluting the ultimate
power vested in the Supreme Court to draw on this provision when the lines between statutory

6
Pritam Singh v. The State, AIR 1950 SC 169.
7
Dhakeswari Cotton Mills Ltd. v. Commissioner of Income Tax, West Bengal, AIR 1955 SC 65.
8
State of Rajasthan v. Kishanlal, [1997] 2 SCC 281.
9
Jamshed Hormusji Wadia v. Board of Trustees, Port of Mumbai and Another, AIR 2004 SC 1815; Esher Singh v.
State Of A.P, (2004) 11 SCC 585.
10
Union Of India and Another v. S.B Vohra and Others, (2004) 2 SCC 150
11
Mathai v. George, 2010 (4) SCC 358.

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provisions and judicial pronouncements becomes too bleak and blur and only discretion herein
above mentioned may act as a lifeboat in such times to enrich the judicial process.

¶ [9]. The reasoning above, starkly counters the claim of maintainability of SLP under Article 136
as proposed by the Petitioners, because the petition regarding the present case has been admitted
by this court on February 20, 2024.

1.2 The Doctrine of Exhaustion of Alternative Statutory Remedies and Judicial self-restraint
bars the SLP.

¶ [10]. The Counsel submits that it is a well-established principle of law that this Hon’ble Court,
in the exercise of its discretionary jurisdiction, generally refrains from entertaining petitions where
an alternative, efficacious statutory remedy is available to the petitioner and has not been
exhausted.12 The rationale behind this principle is to ensure adherence to the legislative scheme of
remedies and to prevent the circumvention of statutory appellate forums.

¶ [11]. In C.C.E. v. Standard Motor Products13, this Hon’ble Court deprecated the practice of
bypassing alternative remedies. Further, in State of H.P. v. Gujarat Ambuja Cement Ltd.,14 it was
emphasized that when a statutory forum is created for redressal of grievances, a writ petition (and
by analogy, an SLP) should not be entertained ignoring the statutory dispensation. This Court in
Nivedita Sharma v. Cellular Operators Association of India,15 reiterated that where a hierarchy
of appeals is provided by statute, a party must exhaust these remedies before approaching a higher
Constitutional Court.

¶ [12]. The exercise of jurisdiction under Article 136 also calls for judicial self-restraint,
particularly where statutory remedies are available or have not been exhausted and emphasized
that constitutional remedies should not override statutory provisions.16 The Supreme Court of India
has previously discussed the discretionary powers under Article 136 of the Constitution and
emphasized the importance of not depriving parties of statutory appeals.17

12
State of Uttar Pradesh v. Mohammad Nooh, AIR 1958 SC 86.
13
C.C.E. v. Standard Motor Products, AIR 1989 SC 1298.
14
State of H.P. v. Gujarat Ambuja Cement Ltd., (2005) 6 SCC 499.
15
Nivedita Sharma v. Cellular Operators Association of India, (2011) 14 SCC 337.
16
Rupa Ashok Hurra v. Ashok Hurra & Anr., AIR 2002 SC 1771.
17
Pawan Kumar Gupta v. Rochiram Nagdeo, (1999) 4 SCC 243 (India).

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¶ [13]. Furthermore, it has been established that parties must exhaust statutory remedies before
invoking the extraordinary jurisdiction under Article 136.18 This judicial policy ensures adherence
to the legislative framework of remedies and prevents circumvention of designated appellate
forums as intended by the Parliament.

¶ [14]. This Hon’ble Court has also highlighted the importance of not intervening in factual matters
unless serious legal infirmities are present.19 The principle of exhausting statutory options and
judicial self-restraint is also reflected in the approach of High Courts under Article 22620 of the
Constitution of Induatria.

¶ [15]. For instance, in Danda Rajeshwari v. Bodavula Hanumayamma and Others,21 the High
Court directed parties to pursue alternative remedies, and in Swetambar Sthanakwasi Jain Samiti
and Another v. Alleged Committee of Management Sri R.J.I College, Agra and Others,22
limitations on interfering where statutory remedies are available were outlined.

1.3 The Arbitration and Conciliation Act, 1996 is a self-contained code with limited and specific
appellate provisions.

¶ [16]. The Parliament of Industria enacted the Arbitration and Conciliation Act, 1996 with the
primary objective of ensuring speedy and effective adjudication of commercial disputes with
minimal judicial intervention23. This legislative intent is reflected in the structure of the Act, which
provides a comprehensive framework for arbitration proceedings, including limited and specific
provisions for challenging arbitral awards and for appeals.

¶ [17]. The respondent BBCL also submits that the Section 37 of the Act 1996, delineates the
specific orders against which an appeal shall lie.24 This legal fact has also been affirmed by this
Hon’ble Court, in a catena of judgments that the Arbitration Act is a self-contained code and that
the appellate remedies provided therein are exhaustive.

18
K.K. Patel v. State of Gujarat, (2000) 6 S.C.C. 195 (India).
19
Bharat Coking Coal Ltd. v. Karam Chand Thapar & Bros. Pvt. Ltd. AIRONLINE 2002 SC 126.
20
India Cont. art 226.
21
Danda Rajeshwari v. Bodavula Hanumayamma and Others, (1996) 6 SCC 199,
22
Swetambar Sthanakwasi Jain Samiti and Another v. Alleged Committee of Management Sri R.J.I College, Agra and
Others, (1996) 3 SCC 11.
23
Factual Conspectus, pg. 1, ¶ 2.
24
The Arbitration and Conciliation Act, No. 26 of 1996, § 37.

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¶ [18]. In Fuerst Day Lawson Ltd. v. Jindal Exports Ltd.,25 this Hon'ble Court conclusively held
that Section 37 of the Arbitration Act is a complete code for appeals from orders in arbitration
matters. It was clarified that an appeal shall lie only from the orders specified in Section 37 and
from no others, thereby excluding other forms of appeal like Letters Patent Appeals.

¶ [19]. This principle was reaffirmed in Kandla Export Corporation v. OCI Corporation,26 where
this Hon’ble Court held that the Arbitration Act is a self-contained code and that an appeal from
an order passed under Section 34 of the Act would lie only to the Commercial Appellate Division
of the High Court under Section 37, and no further appeal would lie to the Supreme Court under
Article 136, except on very limited grounds.

1.4 An express statutory remedy of appeal under Section 37 of the Arbitration act was available
to NHAI.

¶ [20]. In the present case, NHAI filed a petition under Section 34 of the Arbitration Act before
the High Court of Dragonstone ("High Court") challenging the Arbitral Award dated 15.06.2024.27
The High Court of Dragonstone heard this petition ‘having original civil jurisdiction’.28This
typically implies that the Section 34 petition was adjudicated by a Single Judge of the High Court.

¶ [21]. The Learned High Court, by its order dated 24.06.2024, upheld the Arbitral Award, thereby
refusing to set aside the Award under Section 34 of the Arbitration Act (Factual Conspectus, Para
24). Although the High Court modified the Award with respect to interest, the substantive decision
was a refusal to set aside the Award.

¶ [22]. Section 37(1)(c) of the Arbitration and Conciliation Act, 1996, expressly provides for an
appeal against an order: "(c) setting aside or refusing to set aside an arbitral award under section
34."29 Therefore, the petitioner NHAI had an explicit statutory right of appeal under Section
37(1)(c) of the Arbitration Act against the order of the Learned High Court dated 24.06.2024,
which refused to set aside the Arbitral Award.30 Such an appeal, from an order of a Single Judge

25
Fuerst Day Lawson Ltd. v. Jindal Exports Ltd., (2011) 8 SCC 333.
26
Kandla Export Corporation v. OCI Corporation, (2018) 14 SCC 715,
27
Factual Conspectus, pg. 5, ¶ 24.
28
Factual Conspectus, pg. 5, ¶ 24.
29
The Arbitration and Conciliation Act, No. 26 of 1996, § 37(1)(c).
30
Moot Prop., Annexure D, pg. 15.

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of the High Court passed under Section 34, would ordinarily lie to a Division Bench of the same
High Court of Dragonstone.

¶ [23]. This appellate structure has been clarified by this Hon’ble Court. In BGS SGS Soma JV v.
NHPC Ltd.,31 this Court discussed the hierarchy of courts in arbitration matters and affirmed that
an appeal from a Section 34 order of a Single Judge of the High Court lies to the Commercial
Appellate Division of that High Court under Section 37. Similarly, in Kandla Export Corporation
v. OCI Corporation.,32 it was held that an appeal from an order passed under Section 34 by a
Single Judge of the High Court would lie to the Commercial Appellate Division of the High Court
under Section 13(1) of the Commercial Courts Act, 2015,33 read with Section 37 of the Arbitration
Act.

¶ [24]. The respondents NHAI has not demonstrated any exceptional or extraordinary
circumstances that would warrant the invocation of this Hon’ble Court’s special leave jurisdiction
under Article 136, nor has it shown that the statutory remedy of appeal under Section 37 of the
Arbitration Act was unavailable, inadequate, or inefficacious.

¶ [25]. The grounds raised by NHAI in the SLP34 (Factual Conspectus, Para 29), such as alleged
errors in the High Court's order, the High Court allegedly travelling beyond its scope in modifying
the award, the dispute no longer being arbitrable due to alleged serious fraud, and the award being
against public policy, are all matters that could and should have been agitated before the
appropriate appellate forum under Section 37 of the Arbitration Act. These grounds do not, prima
facie, fall within the narrow confines for invoking Article 136 when a statutory appeal is available
and has been bypassed.

¶ [26]. Permitting NHAI to pursue this SLP without first exhausting the statutory appeal under
Section 37 would not only undermine the legislative scheme of the Arbitration Act, which aims for
minimal judicial intervention beyond the specified statutory channels, but also open floodgates for
litigants to bypass statutory appellate procedures, thereby burdening this Hon’ble Court with

31
BGS SGS Soma JV v. NHPC Ltd., (2020) 4 SCC 234.
32
Kandla Export Corporation v. OCI Corporation, (2018) 14 SCC 715.
33
Commercial Courts Act, 2015.
34
Factual Conspectus, pg. 6, ¶ 29.

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matters that ought to be resolved by the designated appellate courts. This would be contrary to the
principles of judicial propriety and the efficient administration of justice.

¶ [27]. In light of the express provision for an appeal under Section 37(1)(c) of the Act 1996,
against the order of the High Court dated 24.06.2024,35 the present Special Leave Petition filed by
NHAI is not maintainable. NHAI has failed to exhaust the efficacious statutory remedy available
to it, and no exceptional circumstances have been demonstrated to warrant a deviation from the
established principles of law requiring exhaustion of alternative remedies before invoking the
extraordinary jurisdiction of this Hon’ble Court under Article 136 of the Constitution of Industria.

¶ [28]. The issue regarding the maintainability of an SLP in the face of an unexhausted statutory
appellate remedy, particularly under a special enactment like the Arbitration Act, is well-settled by
a consistent line of judicial pronouncements from this Hon’ble Court. The principles governing
the exercise of power under Article 136 emphasize judicial self-restraint and deference to statutory
remedial frameworks. Therefore, the respondent BBCL humbly submits that there appears no layer
of contradiction that this Hon’ble Court shall dismiss the SPL filed by the Petitioner for want of it
admissibility, for reasons enumerated herein above.

Issue 2 Insofar as the question of termination of the Agreement and the claim for damages is
concerned; whether the High Court has rightfully upheld the Award?

¶ [29]. The Counsel for the respondents most humbly submits before the Hon’ble Supreme Court
of Industria that the High Court’s judgement was absolutely correct, because;
Firstly, the award is not liable to be set aside as per Section 34 of the Arbitration and Conciliation
Act, 1996.
Secondly, the award is perfectly legal, reasonable and sound.

2.1 Award not liable to be set aside as per Section 34 of 1996 Act.

¶ [30]. It is most humbly submitted that Section 34(2)(a) & (b) of the 1996 Act provides express
and exhaustive grounds on which the award may be set aside or modified, as the case demands.36
Article 3437 of the UNCITRAL Model law in paragraph 2 lists the various grounds on which an

35
Moot Prop., Annexure D, pg. 15.
36
The Arbitration and Conciliation Act, No. 26 of 1996, § 34 (India).
37
U.N. Comm'n on Int'l Trade Law, UNCITRAL Model Law on International Commercial Arbitration, art. 34, U.N.
Doc. A/40/17, annex I, UNCITRAL Yearbook, Vol. XVI, U.N. Sales No. E.94.V.14 (1985).

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award may be set aside. This listing is exhaustive, as expressed by the word “only” and reinforced
by the character of the model law as lex specialis.38

¶ [31]. The power to set aside includes the power to modify as established in 3.1 and 3.2 thus, the
term “set aside” hereinafter refers to power of setting aside and modification. The recourses
provided in Section 34(2)(a)39 are; (i) incapacity,40 (ii) arbitration agreement not valid,41 (iii) no
proper notice of appointment of arbitrator or of the arbitral process,42 (iv) dispute not falling within
the terms of submission to arbitration,43 (v) composition of arbitral tribunal or the arbitral
procedure not being in accordance with the agreement of the partied.44

2.1.1 Incapacity.
¶ [32]. Every person is competent to contract who is of the age of majority according to law to
which he is subject, and who is of sound mind, and is not disqualified from contracting by any law
to which he is subject.45 The provision is based on Article V(1)(a) of 1958 New York Convention.46
There is no question at all about the capacity of the parties as of this agreement.

2.1.2 The Arbitration Agreement is valid under the law.

¶ [33]. The Award maybe set aside if the arbitration agreement is not valid under the law.47 Validity
of agreement is governed by Chapter 2 i.e. Section 10 to 30 of the Contract Act 1872.48 Where the
parties are not ‘ad idem’ about the dispute to be decided by the arbitrators, there is no valid
arbitration agreement and if the agreement of reference is bad for indefiniteness and uncertainty
as to the exact dispute to be referred to the arbitration, the award is bad.49 The award on the basis
of an invalid reference is a nullity and can be challenged in appropriate proceedings.50 This

38
R.S. Bachawat, Justice R.S. Bachawat’s Law of Arbitration & Conciliation § 34.1.3 (Anirudh Wadhwa & Anirudh
Krishnan eds., 6th ed. 2017).
39
The Arbitration and Conciliation Act, No. 26 of 1996, § 34(2)(a) (India).
40
The Arbitration and Conciliation Act, No. 26 of 1996, § 34(2)(a)(i) (India).
41
The Arbitration and Conciliation Act, No. 26 of 1996, § 34(2)(a)(ii) (India).
42
The Arbitration and Conciliation Act, No. 26 of 1996, § 34(2)(a)(iii) (India).
43
The Arbitration and Conciliation Act, No. 26 of 1996, § 34(2)(a)(iv) (India).
44
The Arbitration and Conciliation Act, No. 26 of 1996, § 34(2)(a)(v) (India).
45
The Indian Contract Act, No. 9 of 1872, § 11 (India).
46
Convention on the Recognition and Enforcement of Foreign Arbitral Awards art. V(1)(a), June 10, 1958, 330
U.N.T.S. 3.
47
Ashwinie Kumar Bansal, Arbitration Awards: Law on Setting Aside and Execution of Arbitration Awards,
Agreements and Appointment of Arbitrators at 252 (3d ed. 2014).
48
The Indian Contract Act, No. 9 of 1872, §§ 10–30, ch. II (India).
49
Sheodutt v. Pandit Vishnudutta, AIR 1955 Nag 126.
50
Sheodutt v. Pandit Vishnudutta, AIR 1955 Nag 126.

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agreement is completely valid as it is not hit by any section from section 10 to 30 of the Contract
Act 1872. Additionally, the agreement about the dispute resolution was ‘ad idem’.

2.1.3 Ground of Defective Notice of Arbitration.

¶ [34]. It is submitted that Clause (iii) of the sub-section (2)(a)51 provides that an arbitral Award
may be set aside by the Court if the party making the application furnishes proof that 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 to present his case.52 The petitioners have making
application have not furnished any proof proving that they were not given proper notice of
appointment of an arbitrator. The petitioners unequivocally participated in the arbitral process.
Further, the Arbitrator Mr. Peter Baelish was appointed as per the terms of the contract,53 which
state that the arbitrator is to be appointed mutually.54

2.1.4 Ground of Beyond Jurisdiction of Arbitral Tribunal.

¶ [35]. It is submitted that clause (iv) of subsection (2)(a)55 provides that the Arbitral award maybe
set aside by the court if party making an application furnishes proof that the arbitral award deals
with a dispute not contemplated by or not falling in the terms of the submission to arbitration, or
it contains decisions on matters beyond the scope of submission to arbitration.56

¶ [36]. If there is specific term in the contract or the law, which does not permit to the parties to
raise a point before the arbitrator, and of there is a specific bar in the contract to the raising of the
point then the arbitral award passed by the arbitrator in respect thereof would be an excess of his
jurisdiction.57

¶ [37]. A perusal of section 1658, read with section 34(2)(a)(iv)59 clearly shows that so far as section
16 of the 1996 act is concerned, the objection has to be taken before the arbitral tribunal that he is

51
The Arbitration and Conciliation Act, No. 26 of 1996, § 34(2)(a)(iii) (India).
52
Ashwinie Kumar Bansal, Arbitration Awards: Law on Setting Aside and Execution of Arbitration Awards,
Agreements and Appointment of Arbitrators at 254 (3d ed. 2014).
53
Factual Conspectus, pg. 4, ¶ 19.
54
Moot Prop., Annexure A, Term 9.2.
55
The Arbitration and Conciliation Act, No. 26 of 1996, § 34(2)(a)(iv).
56
Ashwinie Kumar Bansal, Arbitration Awards: Law on Setting Aside and Execution of Arbitration Awards,
Agreements and Appointment of Arbitrators at 255 (3rd ed. 2014).
57
West Bengal state warehousing corporation v. Sushil Kumar Kayan, (2022) 5 SCC 679.
58
The Arbitration and Conciliation Act, No. 26 of 1996, § 16.
59
The Arbitration and Conciliation Act, No. 26 of 1996, § 34(2)(a)(iv).

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exceeding the scope of authority or his acts is without jurisdiction and the aggrieved party can only
get the matter set aside under section 34 clearly shows that it is couched in a language which is
much wider than the scope of section 16 of the 1996 act.60 It is independent of section 16 because
it makes no reference to section 16 in this regard.61

¶ [38]. The provisions of Section 34(2)(a)(iv)62 were held not attractive at all to the facts of the
case.63 The dispute which had been determined by the arbitrator could not be regarded as one not
contemplated by or not falling within the terms of the submission to arbitration.64 Similarly, the
award cannot be assailed on grounds that it contained decision on matter beyond the scope of
arbitration.65

¶ [39]. It is submitted that the matters decided by the tribunal were well within the jurisdiction of
the arbitrator. The matter about the jurisdiction of the tribunal was not raised during the arbitral
proceedings66 and thus must not be allowed by this court to be raised here. Further, there is no term
in the contract barring the arbitral tribunal not to decide on any matter,67 on which the tribunal has
decided.68

¶ [40]. Moreover, there is no proof furnished by the petitioners to prove that the arbitral award
deals with a dispute not contemplated by or not falling in the terms of the submission to arbitration,
or it contains decisions on matters beyond the scope of submission to arbitration.

2.1.5 The Composition of the Tribunal & the arbitral procedure is in accordance with the
agreement.
¶ [41]. It is submitted that clause (v) of sub-section (2)(a)69 provides that an arbitral award maybe
set aside by the Court if the parties making the application furnishes proof that the composition of
arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties,

60
Ashwinie Kumar Bansal, Arbitration Awards: Law on Setting Aside and Execution of Arbitration Awards,
Agreements and Appointment of Arbitrators at 257 (3rd ed. 2014).
61
Airport Authority of Indis v. S.N. Malhotra and Sons, 2002 (Supp) Arb LR 495 (Del.).
62
The Arbitration and Conciliation Act, No. 26 of 1996, § 34(2)(a)(iv)
63
UOI v. Moti Enterprises, 2003 (2) Arb LR 229 (Bom.).
64
Ibid.
65
Ibid.
66
Moot Prop., Annexure C, Award, pg. 13-14.
67
Moot Prop., Annexure A, Agreement, pg. 8-11.
68
Moot Prop., Annexure C, Award, pg. 13-14.
69
The Arbitration and Conciliation Act, No. 26 of 1996, § 34(2)(a)(v).

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unless such agreement was in conflict with the provision of Part I from which the parties cannot
derogate, or, failing such agreement, was not in accordance with Part I.70

¶ [42]. There is no proof submitted by the petitioners proving that the composition of the arbitral
tribunal for the arbitral procedure was not according to the agreement of the parties. Further, the
petitioners have miserably failed to establish that the agreement was in anyway conflicting with
the provisions of Part I of the Arbitration Act.

¶ [43]. The Issues 4 and 5 sufficiently establish that subject matter of the dispute is capable of
settlement by arbitration and the award is not in conflict with the public policy of Industria.

¶ [44]. In light of the above submissions, it is clear that the Award is not liable to be set aside on
the grounds mentioned in Section 34 of the 1996 Act. Thus, the High Court has rightfully upheld
the arbitral Award.

2.2 The Award is Perfectly Legal, Reasonable & Sound. Deleted:

¶ [45]. To establish a legality, reasonableness and soundness of the award, it is necessary to

examine section 55, 56 and 74 of the Contract Act, 1872. Section 55 talks about, the effect of
failure to perform at a fixed time, in contract in which time is essential. Section 56 talks about an
agreement to do impossible act. Section 74 talks about compensation for breach of contract where
penalty stipulated for.

2.2.1 Examination of Section 55 with regard to the Present Dispute.

¶ [46]. Section 55 provides for a special rule regarding the performance of a promise to do it at or
before a specified time. However, this rule provides that where time is of the essence, the
performance must take place before the specified time, but in the present factual scenario the time
is not the essence of the contract.

¶ [47]. It is submitted that a three Judges’ Bench of the Supreme Court in Hind Construction
Contractors v. State of Maharashtra,71 AIR 1979 SC 720 has held in the case of building and
construction contracts where time was not the essence, that it would be open to the party by notice

70
Ashwinie Kumar Bansal, Arbitration Awards: Law on Setting Aside and Execution of Arbitration Awards,
Agreements and Appointment of Arbitrators at 259 (3rd ed. 2014).
71
Hind Construction Contractors v. State of Maharashtra, AIR 1979 SC 720.

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to fix a reasonable time for completion. It is also presumed that in construction contracts, time is
not of the essence.72

¶ [48]. It is submitted that the present agreement is also a construction agreement. Therefore, the
presumption that time is not of the essence lies in favor of the respondents. The burden of proving
that time is of the essence in the present contract was on the petitioners, however, the petitioners
have miserably failed to prove that time is of the essence in the present contract.

2.2.2 Examination of Section 56 with regard to the present dispute.

¶ [49]. The first paragraph of the Section 56 provides that an agreement to do an impossible act in
itself is void. The second paragraph provides that a contract to do an act becomes unenforceable,
(a) if the act becomes impossible; or (b) for reasons of some event which the promisor could not
prevent.73 It also provides that it becomes so unenforceable when the act becomes impossible or
unlawful.74 The third paragraph places a liability upon a promisor to compensate the promise for
non-performance of the promise, where the promise knew, or with responsible diligence might
have known, and the promisee did not know, that the act promised by the promisor was impossible
or unlawful.75 Through this section, the statute, expressly recognizes events, de hors the contract,
which makes the performance of the contract impossible and interdict its performance.76

¶ [50]. Section 56 of the Contract Act, 1872, primarily encompasses in itself two principles,
namely, the doctrine of frustration and force majeure clause. Chitty on Contracts, introduces the
principle of frustration in the following words, “A contract may be discharged on the ground of
frustration when something occurs after the formation of the contract which renders it physically
or commercially impossible to fulfil the contracts or transforms the obligation from that
undertaken at the moment of entry into the contracts.”77

72
ibid.
73
The Indian Contract Act, No. 9 of 1872, § 56 (India); Pollock & Mulla, The Indian Contract and Specific Relief Acts
890, vol. 1 (R. Yashod Vardhan & Chitra Narayan eds., 16th ed. 2019).
74
Ibid.
75
Id.
76
Energy Watchdog v. Central Electricity Regulatory Commission, 2017 (4) Scale 580; Coastal Andra Pradesh Power
Limited v. Andra Pradesh Central Power Distribution Company Limited, (2019) 256 DLT 764(DB); Gurnam Singh v.
State of Punjab, (2011) 164 PLR 450.
77
H.G. Beale, Chitty on Contracts 2057, para. 27-001, vol. 1 (35th ed. 2012).

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¶ [51]. The expression force majeure clause is normally used to describe a contractual term by
which (one or both) of the parties is entitled to cancel the contract78 or is excused from performance
of the contract, in whole or in part, or is entitled to suspend performance or to claim an extension
of time for performance, upon the happening of a specified event or events, typically, but not
necessarily, and event or events beyond its control.79

¶ [52]. In cases where delay in performing the contractual obligation has happened, the proper test
to apply to decide whether the delay in fulfilling an agreement was so grave as to entitle the
aggrieved party to rescind, is whether that delay is such as to frustrate the commercial purpose of
the venture.80

¶ [53]. In construction contracts where the time is not the essence of the contract, in light of the
force majeure event, i.e. Covid 19, the delay is innocent. Further, it does not frustrate the
commercial purpose of the contract.

2.2.3 Examination of Section 74 With Regard to The Present Dispute.

¶ [54]. Section 74 provides for the measure of damages in two cases: (i) where the contract names
a sum to be paid in case of breach; and (ii) where the contract contains any other stipulation by the
way of penalty.81 In both the cases the measure of damages is by Section 74, reasonable
compensation not exceeding the amount of penalty stipulated for.82

¶ [55]. It is submitted that in case of security deposit, the amount is deposited by way of guarantee
for the due performance of the contract, but in case of breach of contract the amount cannot be
forfeited if no loss is proved.83 The Counsel requests the Court to note that while submitting the
above the respondents do not admit to any breach of contract that may or may not be alleged by
the petitioners.

78
Continental grain export cop v. T.M. Grain Ltd, [1979] 2 Lloyd’s Handelsgesellschaft mbH v. Fingrain SA [1981
to Lloyd’s Rep.259; Pagnan SpA v. Teradex ocean transportation SA [1981] 2 Lloyd’s Rep. 342.
79
H.G. Beale, Chitty on Contracts 2057, para. 27-060, vol. 1 (35th ed. 2012).
80
Stannard, (1983) 46 MLR 738.
81
The Indian Contract Act, No. 9 of 1872, § 74 (India).
82
Fateh Chand v. Balkishan Das, AIR 1963 SC 1405 at 1410-1411; Shree Hanuman Cotton Mills v. Tata Air Craft
Ltd., AIR 1970 SC 1986 at 1997; Maya Devi v. Lalta Prasad, (2015) 5 SCC 588; Lekh Singh v. Dwarka Nath, AIR
1929 Lah 249; Geo Pictures Ltd. v. Neelakandaru Gopalkrishnaru, AIR 1971 Ker 274; Dinanath Damodar Kale v.
Malvi Mody Ranchhoddas, AIR 1930 Bom 213; Dharam Chand Soni v. Sunil Kumar Chakrabarty, AIR 1981 Cal 323,
324; Mahadeoprasad v. Siemens (India) Ltd., AIR 1934 Cal 285.
83
UOI v. Rampur Distillery and Chemicals co. Ltd., AIR 1973 SC 1098.

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¶ [56]. The respondent, i.e. BBCL, sent various letters to the petitioner explaining that owing to
the pandemic, there is an acute shortage of manpower, which may cause delay in completion of
the first milestone of the Project. The contract included much more than the first milestone. Due
to this unjust, and unfair termination the respondents has faced heavy loses. The Award, which is
rightfully upheld by the High Court of Dragonstone, was right in awarding damages for idling
costs, and price escalation. Furthermore, the High Court has rightfully awarded the 18% interest
rate as per the terms of the contract.

¶ [57]. In light of the above submissions, it is contended that the termination was wrongful and the
award as far as the damages are awarded is right and rightfully been upheld by the High Court.
Thus, it is requested that the Judgement of the High Court shall be upheld by this Hon’ble Court.

Issue 3 Does the power to set aside the Award under Section 34 of the Arbitration Act include
the power to modify the Award? As such, did the High Court travel beyond its scope while
modifying the Award to allow the levy of interest?

¶ [58]. The Counsel for the petitioners most humbly submits that;
Firstly, the power to set aside the Award under section 34 of Arbitration Act indeed include the
power to modify the Award.
Secondly, the High Court of Dragonstone modified the award rightly to make it consistent with
the Arbitration and Conciliation Act, 1996.

3.1 Power to set aside the Award includes the Power to Modify the Arbitral Award.

¶ [59]. It is most humbly submitted that Section 34 of the Arbitration and Conciliation Act, 1996,
enables the Court to “set aside” an award on grounds, such as patent illegality, public policy, or if
the award is contrary to the provisions of the Act.84 Section 37 provides for appeals against
decisions made under Section 34.85 The language of section 34 cannot be interpreted to prohibit
modification by Court, nor specifies that the Court can only set aside the Award.86

84
The Arbitration and Conciliation Act, No. 26 of 1996, § 34.
85
The Arbitration and Conciliation Act, No. 26 of 1996, § 37.
86
The Arbitration and Conciliation Act, No. 26 of 1996, § 34.

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3.1.1 The Greater Contains the Lesser.

¶ [60]. It is submitted that, in Ahmedabad St. Xavier College Society and Another v. State of
Gujarat and Another,87 where a nine-Judge Bench of this Court applied the maxim ‘omne majus
continent in se minus’ – the greater contains the lesser. Applying this maxim, it is contended that
the power to set aside will include power to modify or partially set aside an award. It is also
submitted that the power to modify and set aside an award can be exercised when the award is in
conflict with public policy in terms of Section 34(2)(b)(ii)88 or to the extent it is vitiated by patent
illegality in terms of Section 34(2A)89 of the 1996 Act. This approach aligns with the jurisprudence
of other jurisdictions such as the United Kingdom, Australia, Singapore, and other countries, where
similar powers are vested in the Courts.

3.1.2 The judgement of Hakeem is Per Incuriam.

¶ [61]. It is submitted that the two-judge bench judgement in M. Hakeem90, is per incuriam
primarily because of two reasons; firstly, this judgement of two judge bench was contrary of the
other judgement of this court with larger benches. Secondly, it failed to recognize the legislative
intent which is time efficiency. Thirdly, most surprisingly and counterintuitively in M. Hakeem91
the modification was upheld.

3.1.2.1 Contrary to the law laid down in other larger bench judgements.
¶ [62]. It is submitted that in ONGC Ltd v. Western GECO International Ltd,92 a bench of three
judges held that a court could either set aside or modify the award depending on whether the
offending part of the award was severable or not. In several other cases, courts have modified the
award in part.93 Further, in Ssangyong Engineering and Construction Company v. NHAI94

87
Ahmedabad St. Xavier College Society and Another v. State of Gujarat and Another, (1974) 1 SCC 717.
88
The Arbitration and Conciliation Act, No. 26 of 1996, § 34(2)(b)(ii).
89
The Arbitration and Conciliation Act, No. 26 of 1996, § 34(2A).
90
Project Director, NHAI v. M. Hakeem, (2021) 10 SCC 123.
91
Ibid.
92
ONGC v. Western Geco International Limited, AIR 2015 SC 363.
93
Krishna Bhagya Jala Nigam Ltd v. G. Harishchandra Reddy, (2007) 1 Arb LR 148: AIR 2007 SC 817: (2007) 1 RAJ
537: (2007) 2 SCC 720; Hindustan Zinc Ltd v. Friends Coal Carbonisation, (2006) 2 Arb LR 20: (2006) 2 RAJ 1;
Mcdermott International Inc v. Burn Standard Co Ltd, (2006) 2 Arb LR 498: (2006) 2 RAJ 661: (2006) 11 SCC 181;
Tata Hydro Electric Power Supply Co Ltd v. UOI, (2003) 1 Arb LR 490: AIR 2003 SC 1581: (2003) 4 SCC 172:
(2003) 1 RAJ 248.
94
Ssangyong Engineering & Construction Co. Ltd. v. NHAI, AIR 2019 SC 5041

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authored by Justice RF Nariman, the Court went to the extent of treating the minority award as the
award that had to be enforced.

3.1.2.1 Failure in recognizing the Legislative Intent.

¶ [63]. The intent of the Arbitration Act is to provide speedy, and efficient resolution of disputes.95
Several provisions of the Act made these intentions clear.96 In this context, curtailing a court’s
powers to just remitting or setting aside, went against this intention97 as it further delayed the
proceedings.

¶ [64]. Moreover, when a Court set aside an award because of some fault, it would also inevitably
arrive at what it considered was the correct position. Therefore, it could modify the award to that
extent without sending it back to the tribunal.

3.1.2.3 Modification was upheld in M. Hakeem.

¶ [65]. It is submitted that the judgement in M hakeem itself upheld the modification, whereby in
last line of para 49 it is stated that, “Given the fact that the awards in all these cases are therefore
perverse, the district judge rightly interfered with the award.”98 Therefore, the Counsel submits
that the judgement in M hakeem is Per Incuriam and cannot be relied upon.

¶ [66]. Thus, the counsel most humbly contends that the power to set aside an Award includes the
power to modify the arbitral Award. Further, in light of the above submissions it is requested that
this court shall reaffirm the power of modification under Section 34 of the 1996 Act.

3.2 The High Court of Dragonstone rightly modified the Award.

¶ [67]. The Counsel for the respondents submits that in Patel Engineering99, and the stated goal
of a “speedy disposal of the lis”, the court speaking through Justice Rajiv Sahai Endlaw J. held as
follows100— “In my opinion, the power given to the court to set aside the award, necessarily
includes a power to modify the award, notwithstanding absence of express power to modify the
award, as under the 1940 Act… If the powers of the court under section 34 are restricted to not

95
Arbitration and Conciliation Act, 1996, Preamble.
96
Arbitration and Conciliation Act, 1996, § 29A, § 23, §24, & §29B.
97
The Arbitration and Conciliation Act, No. 26 of 1996.
98
Project Director, NHAI v. M. Hakeem, (2021) 10 SCC 123, ¶ 49.
99
S.B.P. & Co v. Patel Engineering Ltd, AIR 2006 SC 450: (2005) 8 SCC 618.
100
UOI v Modern Laminators, (2008) 3 Arb LR 489, 496: (2008) 4 RAJ 359 (Del).

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include power to modify, even where the court without any elaborate enquiry and on the material
already before the arbitrator finds that the lis should be finally settled with such modification and
if the courts are compelled to only set aside the award and to relegate the parties to second round
of arbitration or to pursue other civil remedies, we would not be servicing the purpose of
expeditious/speedy disposal of lis and would be making arbitration as a form of alternate dispute
resolution more cumbersome than the traditional judicial process.”

¶ [68]. It may be noted that the Bombay High Court relying on certain Supreme Court decisions,101
which had the effect of modifying the award in challenge before them, has also read in an implied
power to modify the award under the 1996 Act.102

¶ [69]. On plain reading of para 13 & 31 of the judgement in ONGC Ltd. v. Saw Pipes Ltd.,103
2003, para 14 of Hindustan Zinc Ltd. v. Friends Coal Carbonisation,104 (2006) 4 SCC 445, and
para no 21 in Tata Hydro Electric Power Supply Co Ltd v. UOI105 (three judge bench), it can
clearly be understood that the award is open to interference by courts in certain cases.

¶ [70]. In light of the above judgements, the High Court of Dragonstone was completely right to
modify the award to make it consistent with the express terms of the contract. Thus, the Counsel
requests this Court to uphold the judgement of the High Court of Dragonstone, dated 24/6/2024.

Issue 4 In the given factual conspectus, do recent events render the dispute non- arbitrable?

¶ [71]. The Counsel for the respondent most humbly submits before the Hon’ble Supreme Court
that the recent events do not render the dispute non arbitrable, because;
Firstly, the dispute is purely contractual.
Secondly, the doctrine of severability saves the arbitration agreement.

101
Krishna Bhagya Jala Nigam Ltd v. G. Harishchandra Reddy, AIR 2007 SC 817: (2007) 2 SCC 720; Hindustan Zinc
Ltd v. Friends Coal Carbonisation, (2006) 2 Arb LR 20: (2006) 2 RAJ 1; Mcdermott International Inc v. Burn Standard
Co Ltd, (2006) 2 Arb LR 498: (2006) 2 RAJ 661: (2006) 11 SCC 181; Tata Hydro Electric Power Supply Co Ltd v.
UOI, AIR 2003 SC 1581: (2003) 4 SCC 172.
102
UOI v Arctic India, (2007) 4 Arb LR 524, 532–533.
103
ONGC Ltd. v. Saw Pipes Ltd., (2003) 5 SCC 705. pp 718 & 727-28, ¶ 13&31.
104
Hindustan Zinc Ltd v. Friends Coal Carbonisation, (2006) 2 Arb LR 20: (2006) 2 RAJ 1.
105
Tata Hydro Electric Power Supply Co Ltd v. UOI, (2003) 1 Arb LR 490: AIR 2003 SC 1581: (2003) 4 SCC 172.

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4.1 The dispute is purely contractual.

¶ [72]. The Counsel most humbly submit that the dispute that formed the subject matter of the
arbitration proceedings, initiated pursuant to the Concession Agreement dated 27.12.2017
("Agreement") between NHAI and BBCL, pertained to core contractual issues arising from the
Kings Road Project106. These include a) The legality and validity of NHAI's termination of the
Agreement on 09.09.2023.107 b) The propriety of NHAI's forfeiture of the entire security deposit
furnished by BBCL.108

4.1.1 The dispute does not meet the threshold established by the court for non-arbitrability
¶ [73]. The Supreme Court in Vidya Drolia109 laid down four-fold test for arbitrability. The
arbitrated dispute concerning contractual rights and obligations between NHAI and BBCL does
not fall into any category of non-arbitrability thus making the contract arbitrable: a) It is not an
action in rem; it is a dispute in personam. b) While the Project has public importance, the
contractual dispute itself does not affect third-party rights in a manner requiring centralized
adjudication beyond the arbitral mechanism agreed by the parties. The criminal matters, which do
involve public interest, are appropriately being handled by the criminal justice system. c)The
arbitration of a commercial contract dispute is not an inalienable sovereign function. d)The dispute
is not statutorily excluded from arbitration under the Act 1996, or any other mandatory statute.

¶ [74]. The Supreme Court in Rashid Raza110 established a twin-test for arbitrability. The alleged
criminal fraud (tender rigging, bribery, etc.) does not permeate the entire contractual matrix of the
performance dispute that was arbitrated.

¶ [75]. The arbitration proceeded on the basis of an existing contract and concerned its
performance, breach, and termination. Even if the award of the contract were to be found tainted
by fraud, a matter for criminal investigation and potential separate legal proceedings to void the
contract ab initio, this does not automatically nullify the arbitration of disputes arising under that

106
Factual Conspectus.
107
Factual Conspectus, pg. 4, ¶ 18.
108
Ibid.
109
Vidya Drolia v. Durga Trading Corp., [(2021) 2 SCC 1]
110
Rashid Raza v. Sadaf Akhtar, [(2019) 8 S.C.C. 710]

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contract concerning its operational aspects, particularly when the arbitration clause itself is not
specifically challenged as being vitiated by such fraud.111

¶ [76]. NHAI participated in the arbitration without raising this specific ground of non-arbitrability
based on such pervasive fraud. The resolution of the contractual dispute regarding the reasons for
delay, justification for termination, calculation of damages for idling machinery and price
escalation112 did not demand complex forensic analysis beyond arbitral expertise.

¶ [77]. The Arbitral Tribunal, presided over by a retired High Court Judge, was fully competent to
adjudicate these contractual claims. The complex investigations into bribery, money laundering,
or tender rigging are indeed matters for specialised criminal investigative agencies and courts, and
are proceeding separately.

¶ [78]. The Supreme Court in Ayyasamy113 made a distinction between fraud simpliciter and
serious fraud. The dispute arbitrated, concerning contractual breaches and remedies, constitutes
"fraud simpliciter" at most, if any element of misrepresentation regarding performance capabilities
was implicitly involved (though the primary issue was delay, termination, and damages).

¶ [79]. The allegations of tender rigging, bribery, and money laundering are indeed "serious fraud"
implicating public interest. However, these are precisely the matters now under investigation,
necessitating judicial intervention in those criminal proceedings. This does not retroactively render
the distinct, prior contractual arbitration non-arbitrable. The criminal justice system will address
criminal culpability, while the arbitral award addressed civil liabilities under the Agreement.

4.1.2 The criminal allegations are completely unrelated to the contractual performance
¶ [80]. It is respectfully submitted that the criminal allegations now being leveraged by NHAI are
distinct from, and entirely unrelated to, the contractual performance issues that were conclusively
adjudicated by the learned Sole Arbitrator, Mr. Peter Baelish, a retired judge of the High Court of
Dragonstone114.

111
Brahmaputra Infrastructure Ltd. v. Assam Vegetable and Oil Products Ltd. And Another; Abdul Kadir
Shamsuddin Bubere v. Madhav Prabhakar Oak
112
Moot Prop., Annexure C, Award, pg. 13.
113
A. Ayyasamy v. A. Paramasivam, (2016) 10 SCC 386.
114
Factual Conspectus, pg. 4, ¶ 19.

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¶ [81]. The criminal allegations primarily concern: a) The pre-contractual stage, specifically the
tender allotment process for the Kings Road Project (allegations of rigging).115 b) Alleged general
criminal conduct of individuals (bribery, corruption, money laundering) and potential involvement
in deaths of Mr. Russo and Ms. Barns.116

¶ [82]. These are fundamentally different from the subject matter of the arbitration, which focused
on the execution of the Agreement, delays in project milestones (particularly in light of the
pandemic117 and related governmental notifications like G.O. MS No. 75 of 2020118), the
contractual validity of the termination by NHAI, and the quantum of damages for contractual
breaches. The criminal allegations are external to these contractual performance obligations and
disputes.

4.2 The Doctrine of separability saves the arbitration agreement

¶ [83]. The doctrine of separability, also referred to as severability, it posits that an arbitration
clause contained within a contract is an agreement independent and autonomous from the main
contract in which it is situated.119 This autonomy insulates the arbitration agreement from
challenges that might affect the validity, existence, or enforceability of the underlying substantive
contract.120 The principal objective of this doctrine is to uphold and preserve the parties' chosen
dispute resolution mechanism, ensuring that disputes are referred to arbitration as mutually agreed,
irrespective of the ultimate fate or legal status of the main contract.121

¶ [84]. As firmly established in the landmark case of Enercon (India) Ltd. and Ors. v. Enercon
GMBH and Anr.,122 any questions pertaining to the formation, conclusion, or validity of the
underlying contract are generally considered irrelevant to the distinct question of the
enforceability of the arbitration agreement. The arbitration agreement is deemed to exist
independently. Under Section 45 of the Act 1996123, only in instances where the arbitration

115
Factual Conspectus, pg. 2, ¶ 6.
116
Factual Conspectus, pg. 6, ¶ 28.
117
Factual Conspectus, pg. 3, ¶ 13.
118
Moot Prop., Annexure B, G.O. MS No. 75 of 2020, pg. 12.
119
Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 445 (2006)
120
Redfern & Hunter, Law and Practice of International Commercial Arbitration 81 (7th ed. 2023)
121
A. Ayyasamy v. A. Paramasivam, (2016) 10 SCC 386.; Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S.
395 (1967)
122
Enercon (India) Ltd. v. Enercon GmbH, (2014) 5 SCC 1
123
Arbitration and Conciliation Act, 1996, § 45, No. 26, Acts of Parliament, 1996

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agreement itself is definitively proven to be "null and void, inoperative or incapable of being
performed."

4.2.1 The allegations of fraud or illegality in the main contract do not extend to the arbitration
agreement
¶ [85]. The doctrine of separability extends robustly to situations involving allegations of fraud,
misrepresentation, or illegality that may affect the main contract. Such allegations, even if
substantiated, do not ipso facto vitiate or invalidate the arbitration clause. The arbitration clause
remains operative unless the alleged fraud, misrepresentation, or illegality is specifically and
directly aimed at the arbitration clause itself, as opposed to the broader contractual arrangement.

¶ [86]. This judicial stance was unequivocally reinforced by the Supreme Court of India in
National Agricultural Cooperative Marketing Federation of India Ltd. (NAFED) v. Gains
Trading Ltd.,124 the Supreme Court held ‘an arbitration clause constitutes a collateral term
primarily related to the resolution of disputes, rather than a term concerning the substantive
performance of the contract’. As such, the arbitration clause survives even in circumstances where
the main contract is terminated, repudiated, or otherwise deemed void or unenforceable.

¶ [87]. This approach derives substantial support from well-established common law precedents,
including the House of Lords decision in Heyman v. Darwins Ltd.,125 and the Supreme Court of
India's ruling in Union of India v. Kishori Lal Gupta & Bros126. These authorities collectively
affirm that arbitration agreements maintain their enforceability and operative effect even if the
main contract is deemed void, has been repudiated, or is otherwise terminated. The arbitration
agreement is treated as a self-contained contract, collateral to the main agreement.

4.2.2 Reinforcement of the dichotomy and validity of the arbitral agreement

¶ [88]. The Supreme Court of India, in Sri Krishna Agencies v. State of A.P. and Ors.,127 further
upheld this critical dichotomy between the main contract and the arbitration agreement. The Court
reiterated that arbitration clauses remain enforceable unless the very formation of the arbitration
clause itself was tainted by fraud, or if the arbitration agreement is otherwise impeached on

124
National Agric. Coop. Mktg. Fed’n of India Ltd. v. Gains Trading Ltd., (2007) 5 SCC 692 (India).
125
Heyman v. Darwins Ltd., [1942] A.C. 356 (H.L.) (U.K.).
126
Union of India v. Kishori Lal Gupta & Bros., AIR 1959 SC 1362
127
Sri Krishna Agencies v. State of A.P. and Ors., [(2009) 1 SCC 69.],

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grounds specifically attributable to it.128 The arbitration agreement's validity hinges on its own
terms, not the personal conduct of signatories129 in relation to the main contract or its performance.
The determinative factor is whether there was a valid and subsisting agreement to arbitrate,
assessed independently of the substantive obligations or the conduct of the parties under the main
contract.130

4.2.3 The arbitral agreement survives despite criminal charges against signatories
¶ [89]. The doctrine of separability and the independent validity of arbitration agreements extend
to scenarios where signatories to the main contract face serious criminal allegations. Even in cases
involving grave accusations such as tender rigging, corruption, bribery, or money laundering,
Indian courts have consistently upheld the arbitrability of disputes arising from the underlying
contract, provided that the arbitration clause itself remains untainted by these allegations and its
formation was proper.

¶ [90]. A notable illustration of this principle is the Supreme Court's decision in World Sport Group
(Mauritius) Ltd. v. MSM Satellite (Singapore) Pte. Ltd.,131 in this case, despite serious allegations
of fraud and corruption that could potentially lead to, or were concurrent with, criminal
investigations, the Supreme Court upheld the reference of the contractual dispute to arbitration.
The Court emphasized that unless the arbitration agreement itself is directly impeached on grounds
of fraud, misrepresentation, or other vitiating factors specific to its making, the arbitral tribunal
retains jurisdiction over the contractual disputes.132

¶ [91]. In light of the foregoing submissions, it is most respectfully contended that the recent
developments and criminal investigations, however grave, do not vitiate the arbitrability of the
present dispute. The dispute at hand is quintessentially contractual in nature and falls squarely
within the jurisdiction of the arbitral tribunal. The allegations of fraud and criminality pertain to
matters extraneous to the performance of the contract and do not impinge upon the validity or
enforceability of the arbitration agreement itself. The doctrine of separability, as consistently
upheld by the Supreme Court, operates to preserve the sanctity and autonomy of the arbitration

128
Russell v. Russell, (1880) LR 14 Ch D 471.
129
Nigel Blackaby et al., Redfern and Hunter on International Arbitration (7th ed. 2022).
130
Booz Allen & Hamilton Inc. v. SBI Home Fin. Ltd., (2011) 5 S.C.C. 532
131
World Sport Group (Mauritius) Ltd. v. MSM Satellite (Singapore) Pte. Ltd., [(2014) 11 SCC 639].
132
Avitel Post Studioz Ltd. v. HSBC PI Holdings (Mauritius) Ltd., 2020 SCC OnLine SC 656

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clause, insulating it from collateral attacks on the main contract unless the arbitration agreement
is itself directly impeached.

¶ [92]. It is humbly prayed that this Hon’ble Court be pleased to recognise and uphold the parties’
unequivocal intention to resolve their contractual disputes through arbitration, as embodied in the
Concession Agreement. The invocation of criminal proceedings or allegations of fraud, absent any
direct challenge to the arbitration clause, cannot be permitted to frustrate the parties’ chosen
dispute resolution mechanism. It is, therefore, submitted that the dispute remains arbitrable, and
the arbitral award rendered by the learned Sole Arbitrator is entitled to full legal recognition and
enforcement.

Issue 5 Whether the Award is liable to be set aside as being against the public policy of
Industria?

¶ [93]. The Counsel for the respondents most humbly submits before the Hon’ble Supreme Court
of Industria that the award is not liable to be set aside as being against the public policy of Industria
because;
Firstly, the public policy is an unruly horse and thus cannot be relied upon to test the validity of
an Award.
Secondly, the award is consistent with the public policy as recognized by this court.

5.1 The public policy is an unruly horse and to vague to be relied upon.

¶ [94]. It is submitted that “Public policy” is a concept not statutorily defined, though it has been
used in statutes, rules, notification etc. since long, and is also a part of common law. Section 23133
of the Contract Act, 1872 uses the expression by stating that the consideration or object of an
agreement is lawful, unless, inter alia, opposed to public policy. That is, a contract which is
opposed to public policy is void.

¶ [95]. In Chitty on Contracts,134 scope of public policy, largely accepted across jurisdictions for
invalidation of contracts, has been summarized in the following terms: “Objects which on grounds
of public policy invalidate contracts may, for convenience, be generally classified into five groups:
first, objects which are illegal by common law or by legislation; secondly, objects injurious to good

133
The Indian Contract Act, No. 9 of 1872, § 23 (India).
134
H.G. Beale, Chitty on Contracts ¶ 19-112, vol. 1 (35th ed. 2012).

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government either in the field of domestic or foreign affairs; thirdly, objects which interfere with
the proper working of the machinery of justice; fourthly, objects injurious to marriage and
morality; and, fifthly, objects economically against the public interest, viz contracts in restraint of
trade…..”135

¶ [96]. In Gherulal Parakh v. Mahadeodas Maiya and others,136 a three-Judge Bench of this
Court, in the context of Section 23 of the Contract Act, summarized the doctrine of public policy
as follows: “Public policy or the policy of the law is an elusive concept; it has been described as
untrustworthy guide, variable quality, uncertain one, unruly horse, etc; the primary duty of a court
of law is to enforce a promise which the parties have made and to uphold the sanctity of contracts
which formed the basis of society, but in certain cases, the court may relieve them of their duty on
a rule founded on what is called the public policy; for want of better words Lord Atkin describes
that something done contrary to public policy is a harmful thing, but the doctrine is extended not
only to harmful cases but also to harmful tendencies; this doctrine of public policy is only a branch
of common law, and, just like any other branch of common law, it is governed by precedents; the
principles have been crystallized under different heads and though it is permissible for courts to
expound and apply them to different situations, it should only be invoked in clear and incontestable
cases of harm to the public; Though the heads are not closed a and though theoretically it may be
permissible to evolve new head under exceptional circumstances of a changing world, it is
advisable in the interest of stability of society not to make any attempt to discover new heads in
these days.”

¶ [97]. In Central Inland Water Transport Corporation v. Brojo Nath Ganguly,137 this Court
observed that the expressions ‘public policy’, ‘opposed to public policy’, or ‘contrary to public
policy’ are incapable of precise definition.

¶ [98]. In Renusagar Power Co. Ltd. v. General Electric Co.,138 a three-Judge Bench of this Court
observed that the doctrine of public policy is somewhat open- textured and flexible. Furthermore,

135
Ibid.
136
Gherulal Parakh v. Mahadeodas Maiya and others, [1959] Supp. 2 SCR 406.
137
Central Inland Water Transport Corporation v. Brojo Nath Ganguly, 1986 AIR 1571.
138
Renusagar Power Plant Co. Ltd. v. General Electric Company, 1994 Supp (1) SCC 644.

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it was held that even contravention of law will not attract the bar of public policy, and something
more than contravention of law is required.

¶ [99]. On plain reading of para 31 of ONGC v. Saw pipes139 it can be understood that the award
could be set aside when it is so unfair and unreasonable that is shocks the conscience of the Court
then the award may be set aside on ground of Public Policy.

¶ [100]. In light of the above submissions, it is very clear that the public policy is not a reliable
test to set aside an Award. It is unreliable, untrustworthy and vague. Thus, the award must not be
set aside on ground of public policy.

5.2 The award is consistent with the public policy test as recognized by this Court.

¶ [101]. It is submitted that in both Sections 34 and 48 have been brought back to the position of
law contained in Renusagar Power Plant Co. Ltd. v. General Electric Company,140 1994 Supp
(1) SCC 644, where “public policy” will now include only two of the three things set out therein
viz. “fundamental policy of Indian law” and “justice or morality”.141 The only other subset which
public policy contains is patent illegality.142

¶ [102]. The Judgment in Western Geco143 would expand the Court’s power, contrary to
international practice. Hence, a clarification needs to be incorporated to ensure that the term
‘fundamental policy of Indian law’ is narrowly construed.144 The applicability of Wednesbury
principles145 to public policy will open the floodgates.146

¶ [103]. Furthermore, it is also important to ensure that the broad constructions of public policy
do not constitute an impediment to the enforcement of arbitral awards. Over the years, the issues
that come under the public policy exception have subjected courts, both in the common law and in

139
Oil & Natural Gas Corp. Ltd. v. Saw Pipes Ltd., (2003) 5 SCC 705.
140
Renusagar Power Plant Co. Ltd. v. General Electric Company, 1994 Supp (1) SCC 644.
141
Ibid.
142
Associate Builders v. DDA, 2015 (3) SCC 49.
143
ONGC v. Western Geco, AIR 2015 SC 363.
144
Ssangyong Engineering & Construction Co. Ltd. v. NHAI, AIR 2019 SC 5041, ONGC v. Western Geco, AIR 2015
SC 363.
145
Associated Provincial Picture House v. Wednesbury Corporation, (1947) 2 All ER 74 (CA).
146
Ssangyong Engineering & Construction Co. Ltd. v. NHAI, AIR 2019 SC; ONGC v. Western Geco International
Limited, AIR 2015 SC 363.

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the civil law, to considerable abuse; in the case of Richardson v. Mellish147, public policy was
described as an ‘unruly horse’, which can sometimes lead to capricious outcomes.

¶ [104]. The 246th Report noted that if challenges to the enforcement of arbitral awards based on
public policy were allowed, then it would likely lead to capricious Court decisions.148 The
Commission criticized the cases of ONGC v. Western Geco International Limited149 and
Associate Builders v. DDA150 for broadening the definition of public policy and, in turn, increasing
the level of court interference in arbitration, consequently affecting its efficacy. Section 34 of the
1996 Act should focus on internal matters of procession.

¶ [105]. Public Policy with regard to arbitral award was explained by Justice RF Nariman in
Associate Builders v. DDA151 as under three sub-headings, namely, patent illegality, justice and
morality. It was categorically held that, an award can be said to be against justice only when it
shocks the conscience of the Court.152

¶ [106]. Morality, in the context of an arbitral award would mean the enforcement of an award say
for specific performance of a contract involving prostitution. "Morality" would, if it is to go beyond
sexual morality necessarily cover such agreements as are not illegal but would not be enforced
given the prevailing mores of the day. However, interference on this ground would also be only if
something shocks the court's conscience.153

¶ [107]. Moreover, patent illegality principle contains three sub heads: (a) a contravention of the
substantive law of India. This must be understood in the sense that such illegality must go to the
root of the matter and cannot be of a trivial nature.154 This is a contravention of Section 28(1)(a)155
of the Act; (b) a contravention of the Arbitration Act itself would be regarded as a patent illegality,
for example if an arbitrator gives no reasons for an award in contravention of Section 31 (3)156 of

147
Richardson v. Mellish, (1824) 2 Bing 229.
148
Law Comm. Rep. No. 246, at. https://lawcommissionofindia.nic.in/cat_arbitration/
149
ONGC v. Western Geco International Limited, AIR 2015 SC 363.
150
Associate Builders v. DDA, 2015 (3) SCC 49.
151
Ibid.
152
Id.
153
Id.
154
Id.
155
The Arbitration and Conciliation Act, No. 26 of 1996, § 28(1)(a) (India).
156
The Arbitration and Conciliation Act, No. 26 of 1996, § 31(3) (India).

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the Act, such award will be liable to be set aside;157 and (c) a contravention of Section 28 (3)158 of
the Arbitration Act.

¶ [108]. Furthermore, where plea of bias is not raised as per section 13159, then party cannot raise
it later on for challenging the Award under Section 13.160 If it is raised, rejected and arbitral Award
is passed against the party then it can challenge it under Section 34.161

¶ [109]. It is submitted that the Award of the sole arbitrator162 was perfectly legal, in line with the
terms of the contract and in line with the substantive law of India.163 The Award was not such that
it would shock the conscience of the Court. It does not violate any provisions of the Arbitration
Act nor any other substantive law of the country.

¶ [110]. The arbitrator while making an Award was completely mindful of the terms of the contract,
making the award consistent with Section 28(3)164. Hence, there arise no ground for the award to
be set aside.

¶ [111]. In light of above submissions, it is most humbly submitted that the Award is not liable to
be set aside as being against the public policy. Thus, it is requested that the award shall be upheld
by the Hon’ble Supreme Court of Industria.

157
The Arbitration and Conciliation Act, No. 26 of 1996, § 28(3) (India).
158
Ibid.
159
The Arbitration and Conciliation Act, No. 26 of 1996, § 13 (India).
160
Ashwinie Kumar Bansal, Arbitration Awards: Law on Setting Aside and Execution of Arbitration Awards,
Agreements and Appointment of Arbitrators at 263 (3d ed. 2014).
161
Kitiku imports Trade Private Limited v. Savitri Metals Limited, 1999 (2) Ard LR 405(Bom).
162
Factual Conspectus, Pg. 4, Para.19.
163
Moot Prop, Annexure C, The Award pg. 13-14.
164
The Arbitration and Conciliation Act, No. 26 of 1996, § 28(3) (India).

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PRAYER
WHEREFORE IN THE LIGHT OF THE ISSUES RAISED, ARGUMENTS ADVANCED AND
THE AUTHORITIES CITED, IT IS HUMBLY PRAYED THAT THIS HON'BLE SUPREME
COURT OF INDUSTRIA MAY BE PLEASED TO ADJUDGE AND:

1. Dismiss the Petition for lack of maintainability due to unexhausted remedy under Section
37, Arbitration Act, 1996.
2. Uphold the Judgement of the Hon’ble High Court of Dragonstone, and affirm the Award’s
reinstatement of the Agreement, damages, and 18% interest levy.
3. Declare the High Court’s modification valid, aligning with legislative intent for speedy
resolution.
4. Declare the dispute arbitrable—severability doctrine insulates the arbitration clause from
external criminal allegations.
5. Reject the public policy challenge; the Award meets Renusagar and Associate Builders
thresholds.

AND PASS ANY OTHER ORDER, DIRECTION, OR RELIEF THAT IT MAY DEEM FIT IN
THE INTEREST OF JUSTICE, FAIRNESS, EQUITY AND GOOD CONSCIENCE.

All of which is humbly prayed,

TC-32

Counsels for the Respondent

43
Memorial from the side of Respondents