Ramen Deka vs. Indian Railways Catering And Tourism Corporation LTD And Ors

Facts

The case involves cross-petitions filed under Section 34 of the Arbitration and Conciliation Act, 1996, challenging an Arbitral Award dated March 20, 2023. The dispute arose from an agreement between M/s Ramen Deka (Licensee) and Indian Railway Catering and Tourism Corporation Ltd (IRCTC) for running a food plaza. A key issue was the Licensee's liability for additional license fees for an area occupied beyond the original tender area. The Arbitrator held the Licensee not liable for additional fees, deeming IRCTC's termination of the license invalid. IRCTC challenged this finding, while the Licensee sought consequential reliefs denied by the Arbitrator. Both parties agreed to set aside the award on contested claims and counter-claims, referring them for fresh arbitration, while accepting decisions on uncontested claims.

Held

The Delhi High Court, with the consent of both parties, set aside the impugned Arbitral Award in respect of the contested claims and counter-claims listed in paragraph 6B of the judgment. These contested claims include declarations regarding the Licensee's liability for license fees, interest, and GST on additional space, claims for GST on refunds, interest on refunds, restoration of security deposits, loss of profits, overheads, compensation for blacklisting, bank loan interest, refund for additional space payment, and damages. Counter-claims for outstanding license fees for additional areas, interest on delayed payments, and interest on awarded amounts were also set aside. The Court referred these contested disputes for fresh arbitration to Hon’ble Dr. Justice S. Muralidhar, former Chief Justice, High Court of Orissa, under the aegis of the Delhi International Arbitration Centre. The arbitration is to commence at the stage of final hearing. Claims and counter-claims enumerated in paragraph 6A, which were uncontested, were dismissed as not pressed. The award concerning these uncontested claims, including a refund of Rs. 2,01,16,554/- for the COVID period and counter-claims for outstanding license fees and other charges, have attained finality.

Key Issues

1. Whether the Arbitral Tribunal erred in not considering communications dated June 20, 2017, and June 30, 2017, which allegedly recorded the petitioner's agreement to pay additional license fees, thereby impacting the finding on the Licensee's liability for additional license fees for an area of approximately 35 sq. mtr. (Section 34 of the Arbitration and Conciliation Act, 1996). Contentions: Petitioner (Ramen Deka): The Arbitral Tribunal's decision was based on a plausible reading of the contractual documents, including the final agreement dated October 31, 2019. Respondent (IRCTC): The Arbitral Award failed to consider crucial communications demonstrating the petitioner's agreement to pay additional license fees, rendering the finding on liability erroneous.