M/S Ideb Projects Pvt. Ltd. Vs Bangalore Metro Rail… — Arbitration | Karnataka HC (2025)

M/S Ideb Projects Pvt. Ltd. Vs Bangalore Metro Rail… — Arbitration | Karnataka HC (2025)

What the court decided

AI extract

Outcome

Appeal disposed of: the impugned arbitral award is set aside to the extent of claim No.19, with liberty to the parties to take fresh steps for adjudication of claim No.19; the findings of the Arbitral Tribunal and Commercial Court on claim No.5 are left undisturbed.

Issue for consideration

Whether the Arbitral Tribunal's qualified allowance of claim No.5 (Rs. 2,67,64,178.63 - expenses for office, electrification of yards, casting yards, casting beds; direction to BMRCL to return materials used for the casting yard and temporary structures, removal cost on claimants, retention on payment per valuation report Ex.R59) was sustainable, and whether the Commercial Court rightly affirmed it. +1 more

Court's answer

The findings of the Arbitral Tribunal and the Commercial Court on claim No.5 require no interference: the Tribunal rightly directed BMRCL to return all materials used by the claimants in setting up the casting yard and temporary structure, with the cost of removal borne by the claimants and retention possible on payment of value per the comprehensive valuation report (Ex.R59); this Court concurs with those findings.

Ratio / Principle

The Tribunal's disposal of claim No.19 without adjudicating it - merely holding that nothing survived since items had been returned, despite its order dated 17.03.2021 reserving that question for the Award - is patently illegal; the Commercial Court ought to have interfered under Section 34 of the A&C Act; consequently the impugned award is set aside to the extent of claim No.19 and the parties may take fresh steps for adjudication of that claim.

Key takeaways

Clause 7.7 of the GCC stipulates that each item of plant and material shall be the property of BMRCL (stated while analysing claim No.19).obiter¶87

Detailed headnote1 paragraphs

CAV judgment (per C.M. Poonacha J; Vibhu Bakhru CJ concurring), High Court of Karnataka, 03.12.2025 - COMAP No. 19 of 2025 under Section 13[1A] of the Commercial Courts Act, 2015 r/w Section 37 of the Arbitration and Conciliation Act, 1996 against rejection of the Section 34 challenge to the arbitral award dated 05.08.2023 in A.C No.182/2018 (BMRCL viaduct contract of ₹209,57,03,089/-, validly terminated). Claim No.5 (₹2,67,64,178.63 - office, electrification, casting yards, casting beds): the Tribunal directed BMRCL to return the materials used for the casting yard and temporary structures, removal at the claimants' cost, retention on payment per valuation report Ex.R59 (temporary structure ₹76,56,032.90 + casting yard ₹61,52,651.66 = ₹1,38,08,684.56; ₹13.83 lakhs of material already removed); the Commercial Court affirmed and the High Court concurred - no interference. Claim No.19 (₹12,86,94,908.77 - materials left at site, comprising shuttering Rs.15,83,235/-, steel and cement Rs.12,63,07,761.17/-, store materials Rs.8,03,912.60): although the Tribunal's order dated 17.03.2021 expressly reserved for the Award the question whether the return of 19 items satisfied claim No.19, the Tribunal failed to adjudicate the claim and held nothing survived; this non-adjudication is patently illegal (applying Delhi Airport Metro Express (P) Ltd. v. DMRC, (2022) 1 SCC 131 and SSangyong Engineering v. NHAI, (2019) 7 SCR 522), and the Commercial Court erred in declining Section 34 interference. Impugned award set aside to the extent of claim No.19; parties may take fresh steps for adjudication thereof. Appeal disposed of accordingly.