Overview
In this matter, the Calcutta High Court examined whether an Arbitral Tribunal’s decision on claims for additional establishment costs and interest on retention money required any interference by the Court.

The appeal was filed by ITD-ITD CEM Joint Venture against the judgement passed by the Single Judge on 8 May 2026, refusing to interfere with the arbitral award under Section 34 of the Arbitration and Conciliation Act 1996 (hereafter referred to as the Act). 

The dispute arose from a contract for the construction of an underground section of the Kolkata East-West Metro project. The main question to be determined by the Division Bench was whether the Tribunal adopted a permissible view of the contractual terms while rejecting the contractor’s Claim Nos. 1 and 3. 

Facts of the Case

Kolkata Metro Rail Corporation Ltd. awarded the appellant a contract for the design and construction of Central Station to Subhas Sarobar underground section. On 9 February 2010, the Letter of Acceptance was issued, which was then followed by a formal agreement on 10 March 2010. The contract stated that the completion period would be 217 weeks which would end on 8 April 2014. The original price of the contract was ?815.66 crore.

During the project, the appellant requested for extension of time due to certain delays, including difficulties as to site access and changes in  the work. Four extensions were subsequently granted without the appellant reserving a claim for damages.

The route of the underground tunnel was changed later. Following the negotiations which took place between the parties, an Amendment Order dated 8 November 2016, fixed the revised contract price at approximately 1279.81 crore. The appellant participated in the negotiations without reserving a separate claim for damages arising from the change. 

The disputes were then referred to arbitration. Four claims were raised by the appellant during the same, of which Claim No. 1 was related to the additional establishment costs and Claim No. 3 was related to the interest which was allegedly lost because of the withholding of retention amounts. Both these claims were rejected by the Tribunal while Claims 2 and 4 were allowed. 

The appellant challenged the rejection of the Claims 1 and 3 under Section 34 of the Act, but the Single Judge dismissed the petition. The appellant thereafter filed the present appeal under Section 37 of the Act.

Legal Issues

1. Whether the provisions of the contract prevented the appellant from claiming additional establishment costs for delays.
2. Whether the acceptance of unqualified extension of time by the appellant affected its claim for compensation.
3. Whether the appellant could claim interest on retention amounts after agreeing to the contractual mechanism for their release.
4. Whether the interpretation of the Tribunal as to the contract and assessment of evidence required any interference under Section 34 and 37 of the Act.

Decision

The Division Bench dismissed the appeal and the judgment of the Single Judge as well as the Tribunal's rejection of the claims was upheld.

The Court found that the Tribunal had appropriately considered the contractual provisions, the appellant’s unqualified extension of time and its conduct during the negotiations as to the revised contract. 

The appellant also failed to establish the actual unrecovered loss, which was supposed to form the basis of Claim No. 1. The Court, therefore, found no perversity or patent illegality in the Tribunal’s conclusion.

As to Claim No. 3, the Court noted the conduct of the parties as to the retention amount, including the agreed conversion of the retained amount into a bank guarantee. The Tribunal’s conclusion that the appellant had not established the basis for claiming interest was considered to be a reasonable view which was supported by the contract and the evidence.

The Division Bench reiterated that the proceedings under Section 34 and 37 should not be used as an opportunity to re-appreciate evidence or substitute the view of the Court for a plausible interpretation adopted by the Arbitral Tribunal. 

Finding no perversity or patent illegality, the Court refused to interfere. The appeal was dismissed without any order as to costs.

Case Reference :- ITD-ITD CEM Joint Venture Vs. Kolkata Metro Rail Corporation Ltd. APOT/103/2026 (DB, Before Debangsu Basak and Md. Shabbar Rashidi, JJ., Delivered by Debangsu Basak, J.)