Indian Railway Catering And Tourism Corporation LTD. vs. M/S. Ramen Deka

Facts

The Delhi High Court was hearing cross-petitions under Section 34 of the Arbitration and Conciliation Act, 1996, challenging an Arbitral Award dated March 20, 2023. The dispute concerned 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 found 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 matters.

Held

The Court, with the consent of both parties, set aside the impugned Arbitral Award dated March 20, 2023, in respect of the contested claims and counter-claims listed in paragraph 6B of the judgment. These contested claims and counter-claims were referred 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 proceed from the stage of final hearing. The Court also noted that certain claims and counter-claims (enumerated in paragraph 6A) were accepted by both parties, and the challenge to these was dismissed as not pressed. Specifically, Claim No. 4 [Part] regarding refund of license fees and GST for the COVID period, where the Arbitrator awarded Rs. 2,01,16,554/-, was accepted by IRCTC, but the Licensee’s claim for GST on this amount remained undecided by the Arbitral Tribunal and is now part of the fresh arbitration. The Court also noted that the award of Rs. 62,08,000/- in favor of IRCTC had attained finality, and IRCTC was required to deposit a further sum of Rs. 49,08,554/-.

Key Issues

1. Whether the Arbitral Tribunal erred in holding that the Licensee was not liable to pay additional license fees for the occupied area, contrary to communications dated June 20, 2017, and June 30, 2017, thereby invalidating the termination of the license (Section 34 of the Arbitration and Conciliation Act, 1996)? - Petitioner (Licensee) argued that the Arbitral Tribunal's decision was based on a plausible reading of the contractual documents, including the final agreement. - Respondent (IRCTC) contended that the award failed to consider crucial communications showing the petitioner's agreement to pay additional license fees. 2. Whether the Arbitral Tribunal correctly adjudicated various claims and counter-claims related to license fees, GST, blacklisting, and other charges, and if these decisions should be set aside or upheld (Section 34 of the Arbitration and Conciliation Act, 1996)? - Both parties agreed to set aside the award concerning contested claims and counter-claims for fresh arbitration. - Both parties accepted the findings on specific uncontested claims and counter-claims.