LIST OF DATES & EVENTS

Date Events
The Respondent is a 100 percent Government owned

company incorporated under the provisions of Companies

Act, 1956 engaged in the business of providing all types of

telecom services throughout the country except in the metro

cities of Delhi and Mumbai. The Petitioner (Claimant in the

Arbitration Proceedings) is inter alia engaged in the business

of providing Outdoor Advertising services such as advertising

strategy and implementation, designing and conceptualization

of advertising in Out of Home (hereinafter referred to as

“OOH”).

12.02.2009 The Respondent with an intention to empanel Agencies for its

OOH (out-of-home) Media and Advertising activities invited

bids by issuing an Expression of Interest (hereinafter referred

to as “EOI”).

17.09.2009 The Petitioner entered into an Agreement with the

Respondent by which the Petitioner was engaged to provide

inter alia, OOH advertising services to the Respondent in

Five Territorial Circles in India namely Maharashtra, Tamil

Nadu, Andhra Pradesh, Chennai and Andaman and Nicobar

 Circles. That the said Circles consisted of various SSAs

(Secondary Switching Areas).

18.09.2009 Respondent by way of a Release Order awarded work of

Brand Visibility of BSNL PCO Glow Sign Board (Double

sided)-Lit Boards (hereinafter referred to as “Lit Board”) and

PCO signage (flange double sided)-Non-Lit Boards

(hereinafter referred to as “Non-Lit Board”) to the Petitioner.

The Release Order inter-alia provided as under:

“10. All bills must be accompanying by a site

photographs, a certificate of completion duly verified

by the Dealers/PCO owner/DSA/Retailers. Random

checking may be carried out @15% by circles in order

to verify the claims of vendor’s and ensure proper

installation and quality of the workmanship &

material.

11. Payments will be done by respective territorial

circle within 15 days of submission of bills on a rolling

work completion on monthly basis after receipt of the

report and bill as per para 10 above”

2009-2010 The Claimant executed the work as per the provisions of the
 Contract. However, even after submissions of the invoices as

per the contractual provisions, the Respondent failed to clear

the invoices. The Respondent after much delay (sometimes to

the extend of 1 year) carried out verifications and the basis of

such verifications denied payment to the Claimant and further

imposed Liquidated Damages.

05.08.2010 In the installation report dated 25.08.2010 the Respondent acknowledged the

work done by the Claimant to the extend of more than 90 percent in all

circles. Despite the aforesaid the Respondent failed to clear the invoices.

01.02.2013 A Legal Notice was addressed by the Petitioner to

Respondent invoking the dispute resolution clause 12 of the

Agreement initiating an Arbitration.

29.05.2013 A letter was addressed by the Respondent to the Petitioner

appointing Mr. S.C. Choudhary (the “First Arbitrator”) as

the Sole Arbitrator.

2016 The Arbitration reached the stage of cross-examination of the

Respondent’s witnesses before the First Arbitrator. The cross

examination of the Petitioner witnesses stood concluded.

10.11.2016 First Arbitrator communicated his inability to continue with

the Arbitration due to certain family circumstances.

18.11.2016 Petitioner addressed letter to the CMD BSNL calling upon

 them to appoint an Arbitrator within a period of 7 days from

the receipt of the letter.

30.11.2016 A letter was addressed by the Respondent to the Petitioner

appointing a new Arbitrator Mr. Rakesh Kumar (the “Second

Arbitrator”) as the Sole Arbitrator.

19.01.2018 Order passed in OMP (T) (COMM.) 79 of 2017 by the

Hon’ble High Court of Delhi appointing Mr. Rakesh

Siddhartha, Retired District Judge (the “Third Arbitrator”)

as the sole arbitrator and referred the instant arbitration to the

DIAC.

09.08.2018 Arbitration proceeding before the Third Arbitrator was being

conducted as per Section 29A of the Arbitration and

Conciliation Act, 1996.

August 2020 Final arguments were advanced by the Petitioner and the
- July 2021
Respondent through video-conferencing.

10.07.2021 The Award was reserved on 10.07.2021 with a direction to

parties to file Written Submissions.

24.07.2021 Petitioner proceeded to file its Written Submissions.

22.09.2021 Ld. Sole Arbitrator proceeded to pronounce the Impugned

 Award and proceeded to dismiss the entirety of the Claim of

the Petitioner amounting to Rs. 29,64,05,971.12 (Rupees

Twenty-Nine Crores Sixty Four Lakhs Five Thousand Nine

Hundred and Ninety Seven and One) as on 24.07.2021.

The Ld. Sole Arbitrator also came to a finding that the

Petitioner was not entitled to Rs. 10,00,00,000/- (Rupees Ten

Crores) towards damages and the only relief granted to the

Petitioner was the return of Performance Bank Guarantees

given by the Petitioner to the Respondent to the tune of Rs.

25,00,000/- (Rupees Twenty Five Lakhs) and Rs. 22,00,000/-

(Rupees Twenty Two Lakhs) respectively along with interest

@12% on the said amounts from the date of expiry of the

contract till realisation.

23.09.2021 The Ld. Sole Arbitrator proceeded to provide the signed

stamped copy of the Arbitral Award to the Petitioner.

23.12.2021 Being aggrieved by the Impugned Award, the Petitioner has

proceeded to file the Petition under Section 34 on inter alia

the following grounds:

i. Ld. Sole Arbitrator has deviated from the terms of the

Contract and placed reliance on extraneous

 considerations de hors the contract.

ii. Ld. Sole Arbitrator re-write the terms of the contract

and introduced new terms and conditions in the

contract which never existed.

iii. Ld. Sole Arbitrator attributed additional contractual

duties to the Petitioner which did not form a part of the

scope of work to be carried out by the Petitioner.

iv. Impugned Award has been passed in complete

violation of the principles of natural justice as the Ld.

Sole Arbitrator failed to consider material evidence and

record placed before the Tribunal.

v. Ld. Sole Arbitrator rendered a perverse award contrary

to the said material evidence.

vi. Performance Bank Guarantees never being invoked by

the Respondent clearly evidenced the fact that the

Respondent was not aggrieved with the contractual

performance of the Petitioner.

vii. Ld. Sole Arbitrator failed to consider that the

Respondent at no time initiated any proceedings in

 respect of damages arising out of the purported non

performance of the Petitioner.

20.01.2022 By the impugned order, the aforesaid Section 34 Petition filed

by the Appellant was dismissed.

03.02.2022 The aforesaid impugned order dated 20.01.2022 was correct

and released on 03.02.2022.

Because as per the contractual provisions, the verification had to conducted by the respondent
within 15 days from the date of submission of invoice. In the present case, such inspections were
considered by the Respondent after considerable delays. It is submitted that therefore, the Claimant
cannot be held responsible for absence of the installations during the verifications conducted after
such considerable delay. The Ld. Single Judge therefore erred in ignoring the contention of the
Claimant that had the verification been conducted within the stipulated time, the boards would have
been available.

Because at various SSAs payments were not made to the Claimant even after verification. Further at
SSA (for eg Gadchiroli SSA) even after verification the Respondent again insisted on re verification
after 08 months. In case of Gadchiroli, where the verification was done in Fubruary-March 2011, the
payment was made only on 28 th September 2012. Similar procedure was adopted by the Respondent
for Jalgaon SSA and Osmanabad SSA. The Ld. Arbitrator had completely ignored these facts and
failed to adjudicate on the same. The Ld. Single Judge therefore erred in upholding the Award.

Because the malice approach by the Respondent is further evident from its conduct with respect to
7 SSAs in Maharashtra (Akola, Amravati, Kolhapur, Ratnagiri, Sindhudurg, Wardha, Yavatmal). At
these SSA the Claimant had finished work in 30 th July 2010. Thereafter, the Respondent accepted the
bills in November 2010. However, after one year on 25 th November, 2011 the Respondent the
Respondent incorrectly stated that not a sinle PCO signage was installed. Such action of the
Respondent in contravention of the contractual terms has been upheld by the Ld. Arbitrator and the
Ld. Single Judge erred in further upholding such finding.

Further, from the pleadings of the Respondent it was clear that the Respondent was relying upon
provisions which were not present in the contract to justify the non-payment of invoices of the
Claimant. At para 26 and 39 rwof the SOD, the Respondent incorrectly stated that payment to the
Claimant was contingent on the certificate of satisfaction issued by the concerned Territorial Circle.
The Respondent further pleaded that Territorial Circle officers could ask for re-verification. It is
submitted that there was nothing in the Contract to substantiate the aforesaid argument of the
Respondent. It is therefore clear that the Ld. Arbitrator has upheld the contentions of the
Respondent which were contrary to the contractual provisions. The Ld. Single Judge therefore erred
in upholding the award under Section 34.
The Ld. Single Judge upheld the award even when the Ld. Arbitrator had failed to consider the
various reasons given by the Claimant for the non-availablity of the boards at site including declining
PCO services and change in service provider. Further, various PCOs were uninstalled by the PCO
owners. Further, it was also pointed out that the coastal circles experiences cyclonic activities after
the installation.

Because as per the contractual provisions the Claimant was not responsible for the upkeep and
maintenance of the boards after installation. The Claimant was not responsible for providing security
to the boards after installation. The Award which was challenged before the Ld. Single Judge,
rewrote the terms of the contract by imposing such responsibility on the Claimant. The Arbitrator
has created new contract for the parties. It is therefore submitted that fundamental policy of justice
has been breached by the alteration of the contractual terms . It is submitted that a party to a
contract cannot be liable to perform a bargain it did not enter into. Therefore, the award is in breach
of the fundamental policy of justice followed in the country and should shock the conscience of the
Court.

Because the Ld. Arbitrator had confused the longevity of the board with the issue of maintainance
and security of the Board. It is reiterated that the Claimant had no control over the boards after its
installation. Such misinterpretation of unambiguous contractual terms cannot be considered to be
within the scope of arbitration tribunal and could not have been upheld under Section 34.

Because as per the contractual provisions the Claimant had no control over the owner of the PCOs
to take care of the installed signed board and therefore the invoices were accompanied with all the
details regarding the installation to ensure that the sign boards were installed property. The
Claimant fulfilled its contractual obligation and is therefore entitled to payment.

The Ld. Single Judge erred in upholding the award wherein the Ld. Arbitrator had travelled beyond
the express terms of the contract.

Because the Ld. Single Judge erred in holding in Paragraph 7 that the findings of the Arbitrator were
purely factual and were based on material on record. It is submitted that the finding of the
Arbitrator were based on non-appreciation of the contractual requirement and clauses. It is further
submitted that, in the present case, the findings of fact were arrived at by  ignoring and excluding
relevant material and by taking into consideration irrelevant material.

It is further submitted that the finding of the Ld. Arbitrator by which the Ld. Arbitrator
has ignored all the evidence that was led by the Claimant to establish the work done by
it merely on the basis of the basis of the verification being conducted by the Claimant
after a period of almost one year, defies logic and suffers from the vice of irrationality. It
is submitted that the Ld. Arbitrator had conducted “patent illegality” appearing on the
face of the record. It is therefore, submitted that such “patent illegality” should have
been set aside by the Ld. Single Judge on the basis of the law laid down by the Hon’ble
Apex Court in Ssyangyong Engineering and Construction Company v. NHAI, reported in
(2019) 15 SCC 131. It is further submitted that such patent illegality can be set aside
under Section 37 as has been held by the Hon’ble Apex Court in Patel Engineering Ltd
v. NEEPCO, reported in (2020) 7 SCC 167.
Because by making verification a pre-condition for making payments to the Claimant,
the Ld. Arbitrator has rewritten the terms of the contract. It is submitted that Clause 10
and 11 of the RO dated 18th September, 2009 provided as under:

“10. All bills must be accompanying by a site photographs, a certificate of completion

duly verified by the Dealers/PCO owner/DSA/Retailers. Random checking may be
carried out @15% by circles in order to verify the claims of vendor’s and ensure
proper installation and quality of the workmanship & material.

11. Payments will be done by respective territorial circle within 15 days of submission
of bills on a rolling work completion on monthly basis after receipt of the report and
bill as per para 10 above”

It is therefore clear that the payments had to be made on monthly basis and within 15 days of
submission of bills. Any dispute with respect to documentation should have been raised by the
Respondent within 15 days. Any verification should have been done by the Respondent within 15
days. Further, the Respondent had the option that it “may” do random checking. It is therefore
submitted that payment of invoice was not contingent on the verification by the Respondent
especially verification done after a period of one year. In the present case the Ld. Single Judge erred
in upholding the rewriting of the terms of the contract by the Ld. Arbitrator.

Because the fact that the payments had to be made to the Claimant within 15 days from the
submission of invoice was further evident from the letter dated 23.09.2009 written by the
Respondent to the respective head offices of the territorial Circles.

Because the Claimant had fulfilled its obligation by undertaking the work as per the contractual
provisions and by raising invoices along with the other required documents viz. photographs,
certificates, verifications reports, PCO owner;s acknowledgement slip, PCO telephone numbers and
address etc. in accordance with the RO and the agreement.

The Ld. Arbitrator notes that “there is no denying that the Claimant has filed plethora of documents
signifying installation of boards.” But the Ld. Arbitrator has not even considered a single document
on the ground that at the time of inspection done after more than a year, the boards were not
found. It is submitted that such finding of the Ld. Arbitrator is clearly perverse. The Ld. Arbitrator has
failed to consider the relevant material on record and has only considered the evidence which was
favourable only to the Respondent. The Ld. Single Judge therefore in the impugned order erred in
not interfering with the award. It is therefore submitted that such perverse finding cannot be
considered as a “no-go area” for courts.

Because the Ld. Arbitrator and the Ld. Single Judge erred in refusing to rely on Ext RW-1/9 (i.e.
installation report dated 25.08.2010) merely on the ground that it stated that verification certificate
was required for payment. It is submitted that RW-1/9 the Respondent acknowledged the work
done by it. It was admitted that CCl had completed more than 90 percent work in all circles.
However, like the other evidence that demonstrated that the work was carried out by the Claimant,
this was also selectively ignored by the Arbitrator. The document was admitted by the Respondent’s
witness who categorically admitted that the installation report was prepared by the Respondent on
the basis of installation verified by the Respondent and its Circle Officer.

It is submitted that such verification was required to be carried out by the Respondent within 15
days from the date of submission of invoice. It is submitted that such verification cannot be carried
out as per the discretion of the Respondent without reliance on any contractual provisions. Further,
the verification was not a pre-condition for payment of the invoices. The invoices submitted by the
Claimant were accompanied with the documents as required by the contractual provisions.
Therefore, the finding of the Ld. Single Judge at Paragraph 10 is contrary to the contractual
provisions.

Because the Ld. Single Judge in the impugned order failed to note that the documents/evidence on
record by the Claimant to prove that the Claimant had actually done the work as per the contractual
provisions was not even considered by the Ld. Arbitrator. A finding arrived at without considered the
evidence placed by the party cannot be upheld even under the limited scope of jurisdiction under
Section 34. It is therefore submitted that finding at paragraph 11 of the impugned order is
completely perverse.

Because the Ld. Single Judge at paragraph 8 holds that “CCL had to prove that they had completed
the installation to be entitled to the dues.” At paragraph 10 of the impugned judgment it is held that
“In order to succeed, CCL had to simply prove that the installations had been successfully carried out.
The only way it could have been done this, was by way of cogent evidence.” However, in paragraph
11 the Court upholds the non-consideration of the documents placed on record by the Claimant to
demonstrate that “work was indeed carried out.” It is therefore submitted that the findings of the
Ld. Single Judge in the impugned order is completely inconsistent. In the absence of the
consideration of the documents that showed that the Claimant had carried out the work, the
Claimant could not have demonstrated that it had carried out the work. Such documents have not
been considered by the Ld. Arbitrator. This perverse approach has been upheld by the Ld. Single
Judge. It is therefore submitted that the Ld. Single Judge has failed to exercise jurisdiction vested
under Section 34.

Because the Ld. Single Judge further holds in Paragraph 9 that even if inspection was carried out
after more than a year, the Claimant was not discharged from the burden to prove the claim. It is
submitted that such burden was discharged by the Claimant, but the Ld. Single Judge failed to
appreciate the evidence placed on record by the Claimant.

Because the Ld. Single Judge erred in upholding the finding of discrepancies between the claims
raised by CCl in the invoices and the inspection reported prepared on physical verification of the
sites. It is submitted that such approach adopted is completed perverse. The Claimant was not
responsible for the upkeep of the installations. Further, the payment to the Claimant was not
depended on the verification conducted after more than a year from the date of receiving of
invoices. Further, apart from the verification carried out after delay of one year there was no
evidence against the Claimant. Therefore, the Ld. Single Judge erred in holding that even if benefit of
doubt was to be given due to delay in inspection carried out, “it cannot eviscerate the
insurmountable evidence against CCL.” There was no such evidence.

It is submitted that the Claimant could have proved that work was carried out by it only by leading
evidence. Non-consideration of the evidence by the Ld. Arbitrator amounts to perversity and is
against the established norms of legal procedure. The non-consideration of the vital evidence
placed on record by the Claimant amounts to patent illegally and the Ld. Single Judge should have
set aside the finding in exercise of power under Section 34. In Associated Builders v. DDA, reported
in (2015) 3 SCC 49, it has been held that an award can be set aside if patent illegality has been
committed by an arbitrator. The Ld. Single Judge failed to appreciate the aforesaid law.
Because it is submitted that the Claimant was entitled to payments for the work done by it as per the
contractual provisions. Therefore, the finding of the Ld. Single Judge at paragraph 11 of the
impugned judgment that “notwithstanding the installation” it did not find any ground to compel
BSNL to make payment is contrary to contractual provisions which entitled the Claimant for payment
for the installations done by it.

Because the Ld. Single Judge has completely mis appreciated the law laid down by the Hon’ble Apex
Court in Kailash Nath Associates v. DDA, reported in (2015) 4 SCC 136. It has been held by the
Hon’ble Court that actual damage or loss is a sine qua non for imposing liquidated damages. In the
present case there was no evidence led by the Respondent that it had suffered any loss or damage.
Further, there was no pleading to the effect that it was not feasible for it to establish loss. The
impugned order is therefore contrary to the settled law of the land.

Because the Ld. Arbitrator had upheld the imposition of liquidated damages without there being any
evidence of loss or damage being suffered by the Respondent. Such awards have been repeatedly
set aside by this Hon’ble Court under Section 34. (recently in HPCL v. Dhampur Sugar Mills Ltd.
reported in 2022 (1) ArbLR 34 (Del)). The Ld. Single Judge therefore erred in upholding the award
which upheld the entitlement of the Respondent to damages without their being any evidence of
loss or damage suffered by it. In Fiberfill Engineers vs. Indian Oil Corporation Limited, similar award
was set aside because the award which was passed contrary to the law laid down in Kailash Nath
(Supra) was set aside under Section 34 because said award was “contrary to the substantive law on
damages expounded by the Superior Courts.” It is therefore submitted that the impugned judgment
is contrary to the law laid down by superior courts.

Because the finding of the Ld. Single Judge at Para 13 of the impugned judgment that the burden
was on the Claimant to show that the amount stipulated was not reasonable, is contrary to
established law laid down on the issue of damages. It is submitted that the onus was on the
Respondent to demonstrate that it had suffered legal injury if any.

Because it is submitted that the Respondent had to establish that it had suffer loss and has incurred
damages even if the contract did not provide for imposition of any penalty. It is submitted that the
ignorance of the established law by the Ld. Single Judge was not justified merely on the ground that
deductions cannot be held to be “penal” in nature.

Because the Ld. Single Judge erred in holding that the loss caused to the Respondent BSNL was ex
facie visible. It is submitted that there was no evidence on record to substantiate the aforesaid
finding of the Ld. Single Judge and therefore the impugned order is perverse and deserves to be set
aside.

Because the Ld. Single Judge erred in ignoring the contention of the Claimant that in the absence of
allegation of breach by the Respondent it could not have been said that deductions were made due
to non-supply of material.

Because, the Ld. Arbitrator had further perversely held that the Claimant had dailed to abide with
the terms of the agreement as the submission of proper photograohs and certificates were not done
by the Claimant. It is submitted that the Respondent during the submission of the photographs and
certificates never intimated the Claimant with respect to any discrepancies in documentation. The
Respondent for the first time raised the issue at a belated stage i.e. during the arbitration
proceedings whereby the rectification of the same had become impossible. The Respondent was
therefore estopped from raising such issues after years. Not raising any issue amounts to
acquiescence of the documentation submitted by the Claimant. The Ld. Arbitrator conclusion is
therefore contrary to fundamental policy of law. The Ld. Arbitrator had followed a totally irrational
approach. An award based on such findings should therefore had been set aside by the Ld. Single
Judge by the impugned award. Further, discrepancies in documentation cannot belie the actual work
carried out by the Claimant, which was admitted by the Respondent’s witness.

Further, the Ld. Single Judge further failed to appreciate the fact that the ld. Arbitrator had even
failed to properly note the claims raised by the Claimant. The claims raised by Claimant for Kolhapur
SSA, Lathur SSA, Nasik SSA, YAvatmal SSA etc were incorrectly recorded. The submissions of the
Claimatn for various SSAs were incorrectly recorded. For parbhani SSA, it has been incorrectly
recorded that no claim has been raised by the Petitioner.

Because the Ld. Single Judge erred in ignoring that the non-invocation of bank guarantee by the
Respondent was not of significance. It is submitted that such non-invocation of bank guarantee
demonstrates Respondent’s acquiescence to the work being done by the Claimant. This is coupled
by the fact that the Respondent never called upon the Petitioner to rectify any shortcomings in the
work done. Theis further demonstrates that the Claimant fulfilled its contractual commitments. At
paragraph 9 the Ld. Single Judge upholds Arbitrator’s reliance on the Claimant’s witness who did not
deny the imposition of liquidated damages. However, on the other hand, failed to give any crediance
to the non-invocation of Bank Guarantee by the Respondent.

Because knowledge of the Claimant regarding the imposition of Liquidated damages cannot be a
ground to justify imposition of such damages in the absence of proof of any loss by the Respondent.
The perverse and irrational approach of the Ld. Arbitrator has been upheld by the Ld. Single Judge.
Further the Ld. Arbitrator failed to consider that the imposition of the Liquidated Damages was
challenged by the Claimant. The issue of illegal imposition of Liquidated Damages was raised before
the Arbitrator (Para 35 of SOC) and had to be adjudicated by the Arbitrator. Such imposition of
Liquidated Damages cannot be upheld merely because the Claimant’s witness was aware about such
imposition.

Procedural irregularity in the submission of bills.