LexNATIONAL HIGHWAYS AUTHORITY OF INDIA versus M/S ITD CEMENTATION INDIALIMITED
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[2015) 6 S.C.R. 107 NATIONAL HIGHWAYS AUTHORITY OF INDIA A v. M/s ITD CEMENTATION INDIALIMITED (Civil Appeal No.9799 of 201 O etc.) APRIL 24, 2015 [DIPAK MISRA AND UDAY UMESH LALIT, JJ.] c B Mines and Minerals (Regulation and Development) Act, 1957: Seigniorage Fee - Entitlement of contractor to c the additional amount payable as a result of upward revision in royalty in respect of minor minerals pursuant to subsequent legislation - Held: Since increase in the rates due to additional cost incurred is not taken into account in the indexing of any inputs to the price adjustment formula in D general materials, the contractor is entitled to be paid the additional cost incurred by it - Royalty. Arbitration: Award- Judicial review of- Scope - Held: Court while considering challenge to an arbitral award does E not sit in appeal over the findings and decisions unless the arbitrator construes the contract in such a way that no fair minded or reasonable person could do - Min<Js and M. '"Jrals (Regulation and Development) Act, 1957. Disposing of the appeals, the Court F HELD: 1. It is we11 settled that construction of the terms of a contract is primarily for an arbitrator to decide. He is entitled to take the view which he holds to be the G correct one after considering the material before him and after interpreting the provisions of the contract. The court while considering challenge to an arbitral award does not sit in appeal over the findings and decisions unless the arbitrator construes the contract in such a H 107 108 SUPREME COURT REPORTS [2015) 6 S.C.R. A way that no fair minded or reasonable person could do. [Para 20] [133-F-G] 2. The award by Arbitral Tribunal considers the impact of sub-clauses 70.1 to 70. 7 and agrees with the B contention that the provision for cost escalation based on the agreed price adjustment formulae falls in one compartment while the compensation for additional cost resulting from a subsequent legislation falls in a separate category. In other words, the escalation in price premised C on fluctuation in market value of the inputs stands on one footing, while the additional cost resulting from the impact of any statute, decree, ordinance, law etc as referred to in sub-clause 70.8 stands on the other. Resultantly the governing clauses in the instant case D were held not to be sub-clauses 70.1 to 70. 7 but the substantive part of sub-clause 70.8. The award also considered whether minor minerals in question were or were not included in the basket of materials whose cost variation was taken into account as an input while E arriving at WPI. It also considered that the WPI is an index applicable uniformly in all States while the increase in Seigniorage Fee would vary from State to State. It further dealt with the aspect that NHAI itself was of the F opinion that the additional impact as a result of subsequent legislation was admissible separately, as signified by the letter dated 03.09.2003 to the Economic Advisor. Upon construing the terms and the material on record it concluded that the instant matter would be G covered by substantive part of Sub-Clause 70.8 of COPA. H The view so taken by the Arbitral Tribunal is certainly a possible view. There is no reason to interfere. [Para 21] [133-H; 134-A-G]] McDormott International Inc. v. Burn Standard Co. Ltd. 2006 (2) Suppl. SCR 409:2006 (11) sec 181, ONGC NATIONALHIGHWAYSAUTHORITYOF INDIAv. M/s ITD 109 CEMENTATION INDIA LIMITED Ltd. v. Western Geco International Ltd. 2014 (9) SCC A 263; ONGC Ltd. v. Saw Pipes 2003 (3) SCR 691: 2003 (5) SCC 705; Rashtriya /spat Nigam Ltd. v. Dewan Chand Ram Saran 2012 (4) SCR 1 : 2012 (5) SCC 306; Sumitomo Heavy Industries Ltd. v. ONGC 2010 (9) SCR 176: 2010 (11).SCC 296; Associate Builders B v. DOA 2015 (3) SCC 49 - referred to. Case Law Reference 2006 (2) Suppl. SCR 409 referred to. Para 14 2014 (9) sec 263 referred to. Para 14 c 2003 (3) SCR 691 referred to. Para 14 2012 (4) SCR 1 referred to. Para 17 2010 (9) SCR 176 referred to. Para 18 2015 (3) sec 49 referred to. Para 19 D CIVIL APPELLATE JURISDICTION: Civil Appeal No. 9799 of 2010 From the Judgment and Order dated 30.11.2007 of the High Court of Delhi at New Delhi in FAQ (OS) No. 216 of2007 E WITH C.A Nos. 7066, 9909 & 9908 of 2011, 3150, 2488, 5162 & 7373 of 2012, 686, 4069 & 6158 of 2013, 5661 & F 10586 of 2014 and 3913 & 3914 of 2015 Parag Tripathi,
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