Supreme Court of India

M/S HINDUSTAN CONSTRUCTION COMPANY LIMITEDversusM/S NATIONAL HIGHWAYS AUTHORITY OF INDIA

Citation: 2023 INSC 768
Decided: 24 August 2023
Disposal: Appeal(s) allowed
Bench: S RAVINDRA BHAT

Holding

An arbitral award that contains a reasoned interpretation of contractual terms must not be interfered with under Sections 34 or 37 of the Arbitration and Conciliation Act, 1996 unless it is perverse or patently illegal, and a dissenting opinion does not constitute an award.

Summary

Hindustan Construction Company Ltd (the contractor) executed embankment work for the National Highways Authority of India (NHAI) under the Allahabad bypass project and disputed how quantities should be measured for payment—whether soil and pond‑ash embankments should be measured as a single composite cross‑section or separately. The dispute was referred to a three‑member technical arbitration tribunal which gave a majority award interpreting the contract to allow composite measurement, while one arbitrator issued a dissenting opinion favouring separate measurement. The contractor challenged the award under Sections 34 and 37 of the Arbitration and Conciliation Act, 1996; a single judge of the Delhi High Court upheld the award, but a Division Bench set it aside, deeming the majority view implausible. The Supreme Court held that judicial interference under Sections 34/37 is limited to cases of patent illegality or perversity and that a reasoned award interpreting contractual terms should not be disturbed. It further ruled that a dissenting opinion does not become an award and cannot replace the majority award even if the latter is set aside. Accordingly, the Court allowed all the appeals, set aside the High Court judgments, restored the original arbitral awards, and modified the interest direction.

Issues considered

The correct method of measuring quantities for embankment construction under the contract – composite versus separate measurement for soil and pond ash.
Whether the Division Bench of the Delhi High Court exceeded its jurisdiction under Sections 34 and 37 of the Arbitration and Conciliation Act, 1996 in setting aside the arbitral award.
The legal effect and admissibility of a dissenting opinion of an arbitrator when the majority award is challenged.
The standard of judicial scrutiny applicable to arbitral awards that contain a reasoned interpretation of contractual terms.

Legislation cited

Arbitration and Conciliation Act, 1996s. 34, s. 37

Subjects

ArbitrationSection 34Section 37Contract interpretationDissenting opinionMeasurement of embankmentTechnical specificationsAward interferenceArbitral awardNHAIConstruction contract

Judgment

[2023] 11 S.C.R. 623 : 2023 INSC 768

CASE DETAILS

M/S HINDUSTAN CONSTRUCTION COMPANY LIMITED
v.
M/S NATIONAL HIGHWAYS AUTHORITY OF INDIA
(Civil Appeal No(s). 4658 of 2023)
AUGUST 24, 2023
[S. RAVINDRA BHAT AND ARAVIND KUMAR, JJ.]

HEADNOTES

Issue for consideration: The issue is with respect to the
interpretation of a contract condition, which required the measurement
of quantities used for payment for embankment construction with soil or
with pond; and the relevance of the dissenting opinion of the arbitrators.
Arbitration and Conciliation Act, 1996 – ss. 34, 37 – Arbitral
award – Scope of intereference u/ss. 34 and 37 – On facts, three
technical member arbitration passed an award which was unanimous
on most questions while, on others, there was a dissenting view –
Single Judge of the High Court held that the tribunal’s majority
opinion reﬂ ected a plausible and reasonable view, however, the
Division Bench holding that the tribunal’s majority opinion, and
award, were based on an implausible interpretation of the contract,
set aside the award – Correctness:
Held: Awards which contain reasons, especially when they interpret
contractual terms, ought not to be interfered with, lightly – Prevailing
view about the standard of scrutiny- not judicial review, of an award, by
persons of the disputants’ choice being that of their decisions to stand-
and not interfered with, save a small area where it is established that such
a view is premised on patent illegality or their interpretation of the facts
or terms, perverse, as to qualify for interference – Judges tend to adopt a
corrective lens; usually, commended for appellate review, however, it is
unavailable when exercising jurisdiction u/s. 34 – Courts cannot, through
process of primary contract interpretation, thus, create pathways to the
623
624 SUPREME COURT REPORTS [2023] 11 S.C.R.

kind of review which is forbidden u/s. 34 – So viewed, the Division
Bench’s approach, of appellate review, u/s. 37, and conclusions drawn
by it, resulted in displacing the majority view of the tribunal, as also
the unanimous view – As long as the view adopted by the majority was
plausible and there is no reason to hold otherwise, such a substitution
was impermissible – Judgments passed by the High Court are set aside
– Awards, which were the subject matter of challenge, and to the extent
they were set aside, are upheld and restored. [Paras 22, 23, 28]
Arbitration – Arbitral award – Dissenting opinion of the
arbitrator – Relevance of:
Held: Dissenting opinion cannot be treated as an award if the
majority award is set aside – It might provide useful clues in case there
is a procedural issue which becomes critical during the challenge – When
a majority award is challenged by the aggrieved party, the focus of the
court and the aggrieved party is to point out the errors or illegalities in
the majority award – Minority award or dissenting opinion only embodies
the views of the arbitrator disagreeing with the majority – There is no
occasion for the party aggrieved by the majority award, or, more crucially,
the party who succeeds in the majority award, to challenge the soundness,
plausibility, illegality or perversity in the approach or conclusions in the
dissenting opinion – Dissenting opinion would not receive the level and
standard of scrutiny which the majority award is subjected to – Thus, the
so-called conversion of the dissenting opinion, into a tribunal’s ﬁ ndings,
in the event a majority award is set aside and elevation of that opinion
as an award, would, be inappropriate and improper. [Para 27]

LIST OF CITATIONS AND OTHER REFERENCES

Associate Builders v. Delhi Development Corporation [2014] 13
SCR 895; BOC India Ltd. v. Bhagwati Oxygen Ltd. [2007] 3 SCR 915;
Indian Oil Corporation v. Shree Ganesh Petroleum Rajgurunagar [2022]
16 SCR 450; PSA SICAL Terminals Pvt. Ltd. v. Board of Trustees of V.O.
Chidambranar Port Trust [2021] 5 SCR 408; South East Asia Marine
Engineering and Constructions Limited (SEAMEC Ltd) v. Oil India Ltd.
[2020] 4 SCR 254; M/s. Voestalpine Schienen GmbH v. DMRC [2017]
1 SCR 798; Delhi Airport Metro Express (P) Ltd v. DMRC [2021] 5
M/S HINDUSTAN CONSTRUCTION COMPANY LIMITED v. 625
M/S NATIONAL HIGHWAYS AUTHORITY OF INDIA

SCR 984; State of UP v. Allied Constructions [2003] Supp 2 SCR 55;
McDermott International Inc. v. Burn Standard Co. Ltd. [2006] Suppl. 2
SCR 409; MSK Projects (I) (JV) Ltd v. State of Rajasthan [2011] 9 SCR
402; Dakshin Haryana Bijli Vitran Nigam Ltd. v. Navigant Technologies
(P) Ltd. [2021] 1 SCR 1135; Ssangyong Engg. & Construction Co. Ltd.
v. NHAI [2019] 7 SCR 522 – referred to.
David St. John Sutton, Judith Gill and Matthew Gearing QC,
Russel on Arbitration, 24th Edn. (Sweet & Maxwell), p. 313; Gary Born,
International Commercial Arbitration, Wolters Kluwer, Edn. 2009, Vol.
II, p. 2466 & 2469 – referred to.

OTHER CASE DETAILS INCLUDING IMPUGNED
ORDER AND APPEARANCES

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4658 of
2023.

From the Judgment and Order dated 08.11.2012 of the High Court
of Delhi at New Delhi in FAO No. 48 of 2012.

With

Civil Appeal Nos. 4659, 4660, 4661 and 4662 of 2023.

Appearances:

Ms. Aishwarya Bhati, A.S.G., Anil Airi, Dr. A.M. Singhvi, V. Giri,
Sr. Advs., Mohit D. Ram, Ravi Krishan Chandna, Ms. Monisha Handa,
Ms. Bindiya Logawney, Anubhav Sharma, Mudit Ruhella, Sameer
Parekh, Sumit Goel, Ms. Sreeparna Basak, Prateek Khandelwal, Jayant
Bajaj, M/s. Parekh & Co., Mahesh Agarwal, Rishi Agrawala, Ms. Shruti
Arora, Anirudh Bhatia, Devansh Srivastava, Nidhi Ram, Rahul Narang,
Ms. Vidisha Swarup, E. C. Agrawala, George Thomas, Dr. Swaroop
George, R. Sathish, Rajesh Kumar, Mohan Das Kk, Mathen Joseph, Mrs.
S. Geetha, M/s. M. V. Kini & Associates, Ms. Neetica Sharma, Tavinder
Sidhu, Ms. Padma Priya, Ms. Manisha, Shreyansh Rathi, Advs. for the
appearing parties.
626 SUPREME COURT REPORTS [2023] 11 S.C.R.

JUDGMENT / ORDER OF THE SUPREME COURT

JUDGMENT
S. RAVINDRA BHAT, J.
1. All these appeals involve decision on a common question, with
respect to the interpretation of a contract condition, which required the
measurement of quantities used for payment for embankment construction
with soil or with pond ash. The claimants (hereafter “the contractors”)
contended that the measure is one and the same, which is by taking a
composite cross section as a whole of the embankment and determining the
volume by the average end area method. However, the supervising engineer
(hereafter “EE”) adopted a method, whereby the area of the cross section
was bifurcated to account for the area occupied by soil and pond ash for
the determination of quantum of the embankment in two diﬀerent items.
The contractor urged that this was contrary to the technical speciﬁcation
(hereafter “TS”) clause 305.8; the National Highways Authority of India
(hereafter “NHAI”) justiﬁed the EE’s interpretation. Since there have been
diﬀerent outcomes in all these appeals, and the impugned judgments in some
of them have relied upon the judgment of the Division Bench of the Delhi
High Court, in CA 4658/20231 (hereafter referred to as “the main judgment”)
the facts and decisions, in that appeal would be alluded to.
2. NHAI awarded, to the contractor the work of construction of the
Allahabad by-pass project in U.P. by agreement dated 02.06.2004. The
project was completed. However, certain disputes arose inter se the parties
with reference to diﬀerent areas of the contract; these were referred to
arbitration. NHAI has an inbuilt resolution mechanism, i.e., a Dispute
Resolution Board (“DRB”) consisting of technical experts in the ﬁeld, to
which matters are ﬁrst referred to. Since the contractor was not satisﬁed with
the opinion of the DRB, in terms of the agreement, it could and, did invoke
the arbitration. The disputes in the present case culminated in a reference
to the arbitration of three technical persons, who after considering the rival
viewpoints and the materials before them, made the award2. The award was
unanimous on most questions while, on others, there was a dissenting view
of one of the arbitrators.

1 Arising out of SLP No. 38162/2012, which was directed against the judgment of the
Division Bench of the Delhi High Court dated 08.11.2012 in FAO (OS) No. 48/ 2012.
2 Award dated 30.03.2010
M/S HINDUSTAN CONSTRUCTION COMPANY LIMITED v. 627
M/S NATIONAL HIGHWAYS AUTHORITY OF INDIA [S. RAVINDRA BHAT, J.]

3. The contractor, aggrieved by both the unanimous view and the
majority view preferred objections under Section 34 of the Arbitration
and Conciliation Act, 1996 (“the Act”). A learned single judge rejected
the petition3. The single judge was of the considered opinion that as far
as measurement aspects were concerned, the tribunal’s majority opinion
reﬂected a plausible and reasonable view that did not call for interference:
“26. As regards non-payment for, executed work of embankment which
forms the subject matter of Disputes 2 and 4, this is purely a question
of fact based on the measurement. There is no dispute in relation to the
construction of the embankment that is covered under item 2. 02 (a) of
the BOQ. In fact, NHAI has already paid HCC for the said construction.
Clause 305.8 of the MORTHTS provides for measurement of the cross
section of the embankment as one whole composite section and paid
under item No.2.02(b). The decision of the majority members of the
Arbitral Tribunal based on an analysis of the material before them
was a possible view to take. Merely because another view as evidenced
by the dissenting opinion is possible interference by this Court under
Section 34 of the Act is not warranted.”
4. NHAI appealed to the Division Bench, which set aside the decision
of the learned single judge, and held that the tribunal’s majority view, and
award, were based on an implausible interpretation of the contract. It was
held, in the impugned order that:
“[..] On a conjoint reading of BOQ item No.2.02 and clause 305.8
of the technical speciﬁcation, to us, it is clear that the cross sections
have to be taken in respect of the diﬀerent materials used, i.e. soil
and pond ash. Pertinently, it is not the case of the respondents that
the two are mixed into a mixture and then used. Soil and pond ash are
used separately. Thus, the cross sections are to be taken at intervals.
We cannot permit the respondent to contend that it is not possible to
compute the volumes of the two materials in the cross section, when for
30 months both the appellant and the respondent were actually making
measurements accordingly. The respondent itself made the IPCs and
submitted for payments which were duly paid by the appellant. Such

3 By the order dated 30.11.2011
628 SUPREME COURT REPORTS [2023] 11 S.C.R.

measurements were made on the basis of actual utilization of the two
materials. We fail to appreciate how the arbitral tribunal could have
come to a conclusion that the mode of measurement of the two items
separately was not in accordance with the contract. The majority
view, after having noticed the principles of consensus ad idem, seems
to have failed to appreciate this vital issue.[..]”
Contentions of parties
5. On behalf of the appellant/contractors, Dr. Abhishek Manu Singhvi,
Mr. V. Giri, and Mr. Anil Airi, learned senior counsels, Mr. Sameer Parekh
and Mr. George Thomas learned counsel made submissions. It was argued
that the impugned judgment goes far beyond the scope of the jurisdiction
under Section 34 /Section 37 of the Act. The Division Bench while interfering
with the award on the grounds that it did, transgressed the extremely narrow
scope of interference under Section 37 of the Act. It was argued that this
court in a plethora of cases has held that the intent of the Act is to restrict
the grounds of challenge to an arbitral award to the barest minimum. It is
submitted that this court has time and again held that the general approach
of the courts should be to uphold the award and the arbitral award and not to
sit with a meticulous legal eye endeavouring to pick holes, inconsistencies
and faults in the award.
6. It was argued that contractual conditions relating to a method of
measurement are dependent heavily on technical understanding and cannot
be read and interpreted like the general provision of a contract. They have
meanings developed over time based on the views and the courts should defer
to the ﬁnding by the technical experts. It was argued that the speciﬁc point of
dispute was whether any outstanding amount “on account of ‘construction
of embankment’ with pond ash in accordance with BOQ Item No. 2.02 (b)
read with clause 305.2.2.3 of the Technical Speciﬁcations” was payable to
the contractor. This was a pure question of fact, over which the ﬁndings in
the award had to be left alone. Counsel also highlighted that in many appeals,
the DRB constituted an internal mechanism by NHAI, comprised entirely of
technical personnel, nominated by it (NHAI) had also endorsed the opinion,
which favoured the contractors’ interpretation. Given this background and
the further like interpretation given in arbitration, by the tribunal, which
again comprised of experts, there was no scope for interference.
M/S HINDUSTAN CONSTRUCTION COMPANY LIMITED v. 629
M/S NATIONAL HIGHWAYS AUTHORITY OF INDIA [S. RAVINDRA BHAT, J.]

7. Learned counsel submitted that the impugned judgment failed to
or overlooked that there are two kinds of embankments- one with soil and
the other, with ﬂy ash and soil. Therefore, the contractor had quoted rates
for these two kinds of embankment.
8. It was highlighted that Clause 305 of MoRTH 4 technical
speciﬁcations read together with the project speciﬁc amendments contained
in additional technical speciﬁcations provides the formation of embankment
with two types, viz. embankment with soil and embankment with pond
ash, the material requirements for each of the above two types have been
speciﬁed in clauses 305.2.2.2 (for soil) and 305.2.2.3 (for pond ash) of
additional technical speciﬁcations.
9. Counsel submitted, that furthermore, the impugned judgment
overlooked that the TS clause 305 of MoRTH dealt only with embankment
with soil; therefore a project specific sub-clause 305.2.2.3.2 of the
construction operations, was included in the contract which speciﬁes
the various operations (viz., setting out, stripping and storing of top
soil, compacting ground supporting embankment, spreading material,
compaction, ﬁnishing, quality control, a measurement for payment etc)
to be followed by the contractor for embankment with pond ash. It was
submitted that clause 305.2.2.3.2 further provides, “the work shall conform
to clause 4.7.l of IRC SP:58 - 2001”. It was highlighted that the contract
contemplated payment for ‘construction of earth embankment with soil’ in
BOQ5 item 2.02(a) and ‘construction of Pond ash embankment with pond
ash’ in BOQ item No. 2.02. It was also contended that BOQ pertains to the
execution and completion of the entire item of work in compliance with the
contract requirements and does not relate only to any individual material/
consumables used in the execution of the work.
10. It was argued that the contract conditions and stipulations are
to be read as a whole; thus, technical speciﬁcations, drawings and other
documents form part of the contract which cannot be considered in
isolation. The counsel also emphasized that the preamble to the BOQ and
the technical speciﬁcations read together also mandate that the rates given

4 Ministry of Road Transport and Highways
5 Bill of Quantities
630 SUPREME COURT REPORTS [2023] 11 S.C.R.

in BOQ item 2.02 (a) and (b) are for the construction of embankment
i.e., soil embankment and pond ash embankment and not for the usage of
materials in an embankment. It was highlighted that the applicable test for
interference with awards was clearly enunciated in Associate Builders v
Delhi Development Corporation (“hereafter, “Associate Builders”)6 and
was ignored by the impugned judgment. Counsel also relied on BOC India
Ltd. vs. Bhagwati Oxygen Ltd7 and urged that since the tribunal had relied
on a plausible view on interpretation of the contract, it was not open to the
court to set aside the award.
11. Ms. Aishwarya Bhati learned Additional Solicitor General (ASG)
appeared for NHAI and urged the court not to interfere with the impugned
judgment of the High Court and other decisions which followed it, which
are the subject matter of all these appeals. She contended that the Division
Bench’s interference with the award was justiﬁed and warranted. Learned
counsel highlighted the diﬀerence in the stipulations as they existed in the
contract as opposed to what was cited in the majority award which is the
subject matter of appeal in the impugned judgment. It was contended that
the clause was wrongly reproduced and consequently, not only vitiated
by incorrect interpretation but rather a case of rewriting the terms of the
contract by the tribunal. This meant that the tribunal acted beyond the
terms of the contract. Learned counsel, emphasized that such rewriting
was suﬃcient justiﬁcation for the Division Bench to interfere with the
award. This aspect had been lost sight of – even overlooked by the learned
Single Judge.
12. It was argued next that the interpretation by the contractors and
the tribunal, if accepted, will lead to absurd results so far as the ratio of
soil and pond ash used in an embankment is concerned. These components
or materials vary from case to case. Therefore, it would be illogical and
rather unfair to cast a liability upon the NHAI to pay at one rate regardless
of the soil and pond ash used for the work. Learned counsel highlighted
that embankment construction can involve varied ratios of such materials
– ranging from 9:1 to 3:2 at diﬀerent locations. Therefore, the Division

6 2014 [13] SCR 895
7 2007 [3] SCR 915
M/S HINDUSTAN CONSTRUCTION COMPANY LIMITED v. 631
M/S NATIONAL HIGHWAYS AUTHORITY OF INDIA [S. RAVINDRA BHAT, J.]

Bench correctly held that it would not be justiﬁed to cast this liability upon
the NHAI.
13. It was also highlighted that the tribunal and the learned Single
Judge erred in improperly analyzing the stipulations and conditions
in the contract. Clauses 2.02(a) and (b) reveal that there is only BOQ
Item, i.e., embankment. The separate treatment in the stipulation only
meant that the embankment could be constructed one way, where the
soil was used and second, where both soil and pond ash was used.
Learned counsel submitted that in terms of clause 305.8 of the technical
speciﬁcations, cross-sections had to be quantiﬁed proportionately. The
ASG further highlighted that for two years, separate measurements
were taken and consequently it was incorrect to contend that separate
measurements for both the materials were not possible. It was further
argued that embankment work with pond ash and soil is completed by
layering wherever concerned materials are necessary and easily capable
of measurement. Further, she argued that separate quantities were
expressly notiﬁed and mentioned in the concerned conditions which the
parties at the relevant time intended to give meaning to. This aspect was
highlighted by the dissenting award of one member of the tribunal, who
upheld the EE’s decision to reject the claim based on such interpretation.
Therefore, wherever soil was used it had to be paid as per Clause 2.02(a)
and wherever pond ash was used, payment had to be as per Clause 2.02
(b) read with TS 305.2.2.3. Lastly, it was contended that the intention
of the draftsman was clear as any reference to technical speciﬁcation
was avoided but a mention was made of IRC:SP:58.201 and instead it
was only TS 305 and TS 305.2.2.3 were used. These did not deal with
or describe embankments to be constructed with ﬂy ash or even they
ought to be designed in a composite manner.
14. The ASG relied on Indian Oil Corporation v Shree Ganesh
Petroleum Rajgurunagar8; PSA SICAL Terminals Pvt. Ltd. v. Board of
Trustees of V.O. Chidambranar Port Trust9; South East Asia Marine

8 2022 (16) SCR 450
9 2021 (5) SCR. 408
632 SUPREME COURT REPORTS [2023] 11 S.C.R.

Engineering and Constructions Limited (SEAMEC Ltd) v Oil India Ltd10
and other decisions, in support of NHAI’s argument that if the interpretation
adopted by a tribunal is unsupported by law, or wholly incorrect, in the given
facts of a case, the award can be interfered with. It was submitted that so
long as the interpretation of contractual terms is reasonable and possible,
awards should not be interfered with. However, if awards do not adopt such
an interpretation, and adopt one, which results in unreasonable expansion
of any express contractual term, they can and should be interfered with.
Learned counsel submitted that the occasion for exercise of such discretion
was exercised rightly, by the impugned judgment.
Analysis and Conclusions
15. Before dealing with the merits, it is essential to extract the relevant
contract stipulations. The main judgment which involved the contract for
works Allahabad Bypass Project of a road from KM 158 to KM 198 (except
Ganga Bridge) was concerned with the following clauses:
Item Description Unit Est. Qty. Units Rate Amount INR
(INR)
In words In In words In ﬁgures
ﬁgu
res

2.02 Construction
of embankment
with approved
material complete
as per Technical
Speciﬁcations
Clause 305 with all
leads and lifts
a) With Soil CuM 1198000 Rs. One 102 R u p e e s 122,196,000
hundred and twelve crore,
two only. twenty one
lakhs ninety
six thousand
only
b) With Pond Ash CuM 3252000 Rs. Two 252 R u p e e s 819,504,000
hundred and e i g h t y
ﬁfty two only one crore
ninety ﬁve
lakhs four
thousand
only

10 2020 (4) SCR 254
M/S HINDUSTAN CONSTRUCTION COMPANY LIMITED v. 633
M/S NATIONAL HIGHWAYS AUTHORITY OF INDIA [S. RAVINDRA BHAT, J.]

16. For pond ash embankment under BOQ item No. 2.02(b), the
relevant stipulation for measurement and payment are Clause 305.8 and
Clause 305.2.2.3.3 of additional technical speciﬁcations, respectively. The
said clauses are extracted below. The MoRTH speciﬁcation reads as follows:
“305.8 Measurements of Payment
Earth embankment/subgrade construction shall be measured
separately by taking cross sections at intervals in the original
position before the work starts and after its completion and
computing the volumes of earthworks in cubic metres by the
method of average end areas…….”
Clause 305.2.2.3.3- relatable to Item No. 2.02(b) reads as under:
“Measurement for payment: Same as Clause 305.8 of MoRTH
speciﬁcations.”
The relevant stipulation for contract rate units for diﬀerent items in
rate contracts is clause 114.1; it reads as follows:
“114.1. - For item rate contracts, the contract unit rates for
diﬀerent items of work shall be payment in full for completing
the work to the requirements of the speciﬁcations including full
compensation for all the operations detailed in the relevant
sections of these speciﬁcations under “Rates”. In the absence of
any directions to the contrary, the rates are to be considered as
full inclusive rate for ﬁnished work covering all labour, materials,
wastage.... Arising out of General Conditions of Contract.”.
17. The majority award, in the main judgment (from which CA
4658/2023 arises) listed why the members in the majority found for the
contractor:
“i) It is contemplated in the contract to construct two types of
embankments. One with the soil alone, and the second one with the
combination of soil pond ash.
ii) The embankment with pond ash alone cannot be constructed, as the
pond ash is susceptible for erosion. Hence, the soil cover is provided
for protection of the embankment.
634 SUPREME COURT REPORTS [2023] 11 S.C.R.

iii) The composite cross section of the embankment comprising of
soil and pond ash together is as the collectively termed embankment
construction with pond ash under BOQ item No. 2.02(b)
iv) The method of measurement to be adopted for payment for the
embankment construction with soil or with pond ash is one and
the same, which is by taking composite cross section as a whole of
the embankment and determining the volume by average end area
method.
v) The method of measurement adopted by the Engineer, where in,
the area of the cross section has been bifurcated to account for area
occupied by the soil and pond ash for determination of quantum of
the embankment in two diﬀerent items if contrary to the technical
speciﬁcation Clause 305.8.
vi) Clause 114.1 of MORTH speciﬁcation speciﬁcally states that
the rates are for the ﬁnished work in all respects. The pond ash
embankment comprising of soil and pond ash is composite and
complete ﬁnished item of work. It cannot be separated into two
diﬀerent items as having been done by the Engineer.
vii) The contention of the claimant that the whole cross section of
the pond ash embankment shall be measured as one cross section for
determination of the work under Item No. 2.02 (b) is fully supported
by the contract conditions.”
The member of the tribunal, who dissented, inter alia, recorded that
a reading of the speciﬁcations:
“clearly shows that wherever soil is used it will be measured 2.02
(a) with whenever pond ash is used it will be measured under 2.02(b)
with TS 305.2.2.3.
13.3.7 I agree with the view taken by the Engineer while rejecting
claim, as the view of the Engineer is strictly as per contract/BOQ
provision as in this particular Contract embankment with soil
and pond ash appear under one item and are · very conspicuously
bifurcated for diﬀerent materials.
M/S HINDUSTAN CONSTRUCTION COMPANY LIMITED v. 635
M/S NATIONAL HIGHWAYS AUTHORITY OF INDIA [S. RAVINDRA BHAT, J.]

13.3.8 I analyse that claimant has ﬂawed under and after thought to
claim even soil as ﬂy ash under item No.2.02 (b). of BOQ.
13.3.9 Thus I draw ﬁrm conclusion that the provision made in the
BOQ item 2.02 (a) and 2.02 (b) are for diﬀerent material i.e. 2.02
(a) is for soil and 2.02 (b)is for pond ash and is for type of material
to be used in the respective items.”
18. A reasoning similar to the majority award, which was in issue
in the main judgment, was adopted in awards, rendered by tribunals of
other contractors, such as CEC -HCC(JV)11; Sunway Construction12; Patel
KNR JV13; and Oriental Structural Engineers (P) Ltd (hereafter, “Oriental
Structures”)14. In some cases, the stipulation was for the construction of
an “embankment with approved materials from borrow areas” in terms
of TS clause 305, and also the construction of an embankment “with ﬂy
ash obtained from coal or lignite burning thermal power station” (CA
4659/2023); likewise, ﬂy ash or lignite burning thermal station as waste
material (CA 4660/2020); “all types of soil” and “with ﬂy ash obtained
from coal or lignite burning thermal power station” (CA 4661/2023) and
pond ash (CA 4662/2023).
19. In some cases, the DRP (or DRB) set up departmentally, with
three experts (in CA 4659/2023) expressed its view in the following terms:
“4.1.5...The above contract stipulation clearly means that the
Embankment 6 or Subgrade, as the case may be, shall be measured
separately by taking cross sections at intervals before the Embankment
work starts and after its completion. The use of phrase ‘taking
cross sections ....... before the Embankment work starts and after
its completion’ means nothing but measurement of embankment as
o whole. In other words what is to be measured is an embankment
and such measurement shall be by taking cross sections at suitable
intervals before the start of Embankment work and after completion
of Embankment of work. In other words the volume of the

11 The appellant in CA 4659/2023;
12 Appellant in CA 4660/2023
13 Appellant in CA 4661/2023
14 Appellant in CA 4662/2023
636 SUPREME COURT REPORTS [2023] 11 S.C.R.

entire embankment formed by ﬂyash and Soil as per Additional
Technical Speciﬁcations Clause A-14 is to be measured. Had the
intention of the contract been measuring soil separately then it would
be necessary to take cross sections repeatedly of every intermediate
layer at the junction of the core ﬂy ash with soil side cover and also at
top of ﬂy ash layer before covering it with 1m soil layer, which is not
stipulated so in the mode of measurement for payment in the Contract.
[…]
4.1.8 The item is for construction of embankment with fly ash.
The words “with Fly Ash” are the adjective qualifying the type of
Embankment. Thus, if is necessary to measure embankment as a
whole and not the individual materials comprising embankment.
Had the item been described as “Providing ﬂy ash for embankment”
then it would have been appropriate to measure ﬂy ash material only.
The intention of contract is to measure the embankment. This is also
corroborated from the description of BoQ item no.2.02(a), which is
only in one type of material i.e. approved material; the phrase used in
description is “construction of embankment with approved materials”.
Here too embankment as an item and the words approved material is
the adjective qualifying the type of embankment.”
In other appeals too, the DRP gave similar directions and instructions.
In Oriental Structures’ (supra) appeal (CA 4662/2023), the DRB’s decision,
inter alia, was that:
“The decision of DRB is to measure the soil cover & Pond Ash together
for Pond Ash embankment& be paid under BOQ item 2.02 (b). The
ﬁnal quantity under BOQ item 2.02(b) are with Engineer & shall be
submitted to Employer & to be paid at the rates approved after the
Arbitration in vogue as on the days after allowing the rebate provided
by Contractor in his oﬀer.”
20. It is quite evident that in most cases, the view of DRPs and tribunals,
and in two cases, majority awards of tribunals, favoured the arguments of
contractors, that composite embankment construction took place, as a result
of which measurement was to be done in a composite, or uniﬁed manner.
Dissenting or minority views, wherever expressed, were premised on
M/S HINDUSTAN CONSTRUCTION COMPANY LIMITED v. 637
M/S NATIONAL HIGHWAYS AUTHORITY OF INDIA [S. RAVINDRA BHAT, J.]

separate measurements. This opinion was of technical experts constituted as
arbitrators, who were versed in contractual interpretation of the type of work
involved; they also had ﬁrst hand experience as engineers who supervised
such contracts. When the predominant view of these experts pointed to one
direction, i.e., a composite measurement, the question is what really is the
role of the court under Section 34 the Act.
21. This court, in M/s. Voestalpine Schienen GmbH v DMRC15
commenting on the value of having expert personnel as arbitrators,
emphasized that “technical aspects of the dispute are suitably resolved by
utilising their expertise when they act as arbitrators.” Such an approach
was commended also in Delhi Airport Metro Express (P) Ltd v DMRC16
wherein this court held that:
“The members of the Arbitral Tribunal, nominated in accordance
with the agreed procedure between the parties, are engineers and
their award is not meant to be scrutinized in the same manner as one
prepared by legally trained minds. In any event, it cannot be said that
the view of the Tribunal is perverse. Therefore, we do not concur with
the High Court’s opinion that the award of the Tribunal on the legality
of the termination notice is vitiated due to the vice of perversity.”
22. The prevailing view about the standard of scrutiny- not judicial
review, of an award, by persons of the disputants’ choice being that of
their decisions to stand- and not interfered with, [save a small area where
it is established that such a view is premised on patent illegality or their
interpretation of the facts or terms, perverse, as to qualify for interference,
courts have to necessarily chose the path of least interference, except
when absolutely necessary]. By training, inclination and experience,
judges tend to adopt a corrective lens; usually, commended for appellate
review. However, that lens is unavailable when exercising jurisdiction
under Section 34 of the Act. Courts cannot, through process of primary
contract interpretation, thus, create pathways to the kind of review which
is forbidden under Section 34. So viewed, the Division Bench’s approach,
of appellate review, twice removed, so to say [under Section 37], and

15 2017 (1) SCR 798
16 2021 (5) SCR 984
638 SUPREME COURT REPORTS [2023] 11 S.C.R.

conclusions drawn by it, resulted in displacing the majority view of the
tribunal, and in many cases, the unanimous view, of other tribunals, and
substitution of another view. As long as the view adopted by the majority
was plausible- and this court ﬁnds no reason to hold otherwise (because
concededly the work was completed and the ﬁnished embankment was
made of composite, compacted matter, comprising both soil and ﬂy ash),
such a substitution was impermissible.
23. For a long time, it is the settled jurisprudence of the courts in the
country that awards which contain reasons, especially when they interpret
contractual terms, ought not to be interfered with, lightly. The proposition
was placed in State of UP v Allied Constructions17:
“[..] It was within his jurisdiction to interpret Clause 47 of the
Agreement having regard to the fact-situation obtaining therein. It is
submitted that an award made by an arbitrator may be wrong either
on law or on fact and error of law on the face of it could not nullify
an award. The award is a speaking one. The arbitrator has assigned
suﬃcient and cogent reasons in support thereof. Interpretation of a
contract, it is trite, is a matter for arbitrator to determine (see M/s.
Sudarsan Trading Co. v. The Government of Kerala, AIR (1989) SC
890). Section 30 of the Arbitration Act, 1940 providing for setting
aside an award is restrictive in its operation. Unless one or the other
condition contained in Section 30 is satisﬁed, an award cannot be set
aside. The arbitrator is a Judge chosen by the parties and his decision
is ﬁnal. The Court is precluded from reappraising the evidence. Even
in a case where the award contains reasons, the. interference therewith
would still be not available within the jurisdiction of the Court unless,
of course, the reasons are totally perverse or the judgment is based
on a wrong proposition of law”
24. This enunciation has been endorsed in several cases (Ref
McDermott International Inc. v. Burn Standard Co. Ltd18). In MSK Projects
(I) (JV) Ltd v State of Rajasthan19 it was held that an error in interpretation

17 2003 Supp (2) SCR 55
18 2006 Suppl. (2) SCR 409
19 2011 (9) SCR 402
M/S HINDUSTAN CONSTRUCTION COMPANY LIMITED v. 639
M/S NATIONAL HIGHWAYS AUTHORITY OF INDIA [S. RAVINDRA BHAT, J.]

of a contract by an arbitrator is “an error within his jurisdiction”. The
position was spelt out even more clearly in Associate Builders (supra),
where the court said that:
“[..] if an arbitrator construes a term of the contract in a reasonable
manner, it will not mean that the award can be set aside on this ground.
Construction of the terms of a contract is primarily for an arbitrator
to decide unless the arbitrator construes the contract in such a way
that it could be said to be something that no fair minded or reasonable
person could do.”
25. Before ending the discussion, it would be also necessary to
highlight one aspect which is likely to arise in some arbitration proceedings,
especially when it involves adjudication by multi-member tribunals. This
aspect was highlighted in Russel on Arbitration, where the relevance of a
dissenting opinion was explained as follows [as quoted in Dakshin Haryana
Bijli Vitran Nigam Ltd. v. Navigant Technologies (P) Ltd (hereafter, “Dakshin
Haryana Bijli Vitran Nigam Ltd”)20]:
“6-058. Dissenting opinions.—Any member of the Tribunal who
does not assent to an award need not sign it but may set out his own
views of the case, either within the award document or in a separate
“dissenting opinion”. The arbitrator should consider carefully whether
there is good reason for expressing his dissent, because a dissenting
opinion may encourage a challenge to the award. This is for the
parties’ information only and does not form part of the award, but it
may be admissible as evidence in relation to the procedural matters
in the event of a challenge or may add weight to the arguments of a
party wishing to appeal against the award.”.21
This court also quoted Gary B. Born’s commentary on International
Commercial Arbitration22 opinion:

20 2021 (1) SCR 1135
21 David St. John Sutton, Judith Gill and Matthew Gearing QC, Russel on Arbitration,
24th Edn. (Sweet & Maxwell), p. 313.
22 Gary Born, International Commercial Arbitration, Wolters Kluwer, Edn. 2009, Vol. II,
p. 2466 & 2469.
640 SUPREME COURT REPORTS [2023] 11 S.C.R.

“Even absent express authorization in national law or applicable
institutional rules (or otherwise), the right to provide a dissenting or
separate opinion is an appropriate concomitant of the arbitrator’s
adjudicative function and the Tribunal’s related obligation to make a
reasoned award. Although there are legal systems where dissenting
or separate opinions are either not permitted, or not customary, these
domestic rules have little application in the context of party-nominated
co-arbitrators, and diverse Tribunals. Indeed, the right of an arbitrator
to deliver a dissenting opinion is properly considered as an element of
his/her adjudicative mandate, particularly in circumstances where a
reasoned award is required. Only clear an explicit prohibition should
preclude the making and publication to the parties of a dissenting
opinion, which serves an important role in the deliberative process,
and can provide a valuable check on arbitrary or indefensible decision
making. [.]
[…]
There is nothing objectionable at all about an arbitrator “systematically
drawing up a dissenting opinion, and insisting that it be communicated
to the parties”. If an arbitrator believes that the Tribunal is making
a seriously wrong decision, which cannot fairly be reconciled with
the law and the evidentiary record, then he/she may express that
view. There is nothing wrong — and on the contrary, much that is
right — with such a course as part of the adjudicatory process in
which the Tribunal’s conclusion is expressed in a reasoned manner.
And, if the arbitrator considers that the award’s conclusions require
a “systematic” discussion, that is also entirely appropriate; indeed,
it is implied in the adjudicative process, and the requirement of a
reasoned award.”
[…]
… the very concept of a reasoned award by a multi-member Tribunal
permits a statement of diﬀerent reasons — if diﬀerent members of the
Tribunal in fact hold diﬀerent views. This is an essential aspect of the
process by which the parties have an opportunity to both, present their
case, and hear the reasons for the Tribunal’s decision; not hearing the
dissent deprives the parties of an important aspect of this process.”
M/S HINDUSTAN CONSTRUCTION COMPANY LIMITED v. 641
M/S NATIONAL HIGHWAYS AUTHORITY OF INDIA [S. RAVINDRA BHAT, J.]

26. In Dakshin Haryana Bijli Vitran Nigam Ltd, the court recollected
the previous holding in Ssangyong Engg. & Construction Co. Ltd. v. NHAI
(hereafter, “Ssangyong Engg. & Construction Co. Ltd.”)23, wherein the
court had set aside the majority award, but issued consequential directions
in the peculiar facts of the case:
“In Ssangyong [Ssangyong Engg. & Construction Co. Ltd. v. NHAI,
(2019) 7 SCR 522], this Court upheld the view taken by the
dissenting arbitrator in exercise of its powers under Article 142 of
the Constitution, in order to do complete justice between the parties.
The reason for doing so is mentioned in para 77 i.e. the considerable
delay which would be caused if another arbitration was to be held.
This Court exercised its extraordinary power in Ssangyong [Ssangyong
Engg. & Construction Co. Ltd. v. NHAI,] keeping in mind the facts
of the case, and the object of expeditious resolution of disputes under
the Arbitration Act.”
However, the court did not, in Dakshin Haryana Bijli Vitran Nigam
Ltd (supra) direct the dissenting opinion to be treated as an award. In the
opinion of this court, that approach is correct, because there appears to
be a slight divergence in thinking between Russel and Gary Born. The
former, Russel is careful to point out that a dissenting opinion is not per
se an award, but “is for the parties’ information only and does not form
part of the award, but it may be admissible as evidence in relation to the
procedural matters in the event of a challenge.” However, Gary Born does
not expressly say that the opinion is not a part of the award. That author yet
clariﬁes that “This is an essential aspect of the process by which the parties
have an opportunity to both, present their case, and hear the reasons for
the Tribunal’s decision; not hearing the dissent deprives the parties of an
important aspect of this process.”
27. It is, therefore, evident that a dissenting opinion cannot be treated as
an award if the majority award is set aside. It might provide useful clues in
case there is a procedural issue which becomes critical during the challenge
hearings. This court is of the opinion that there is another dimension to
the matter. When a majority award is challenged by the aggrieved party,

23 2019 [7] SCR 522
642 SUPREME COURT REPORTS [2023] 11 S.C.R.

the focus of the court and the aggrieved party is to point out the errors or
illegalities in the majority award. The minority award (or dissenting opinion,
as the learned authors point out) only embodies the views of the arbitrator
disagreeing with the majority. There is no occasion for anyone- such as the
party aggrieved by the majority award, or, more crucially, the party who
succeeds in the majority award, to challenge the soundness, plausibility,
illegality or perversity in the approach or conclusions in the dissenting
opinion. That dissenting opinion would not receive the level and standard of
scrutiny which the majority award (which is under challenge) is subjected to.
Therefore, the so-called conversion of the dissenting opinion, into a tribunal’s
ﬁndings, [in the event a majority award is set aside] and elevation of that
opinion as an award, would, with respect, be inappropriate and improper.
28. In view of the ﬁndings recorded earlier, this court is of the opinion
that all the appeals have to succeed. Therefore, C. A. No. 4658/2023, C. A.
No. 4659/2023; C. A. No. 4660/2023; C. A. No. 4661/2023 and C. A. No.
4662/2023 are allowed; all judgments of the Delhi High Court, which were
the subject matter of challenge in those appeals are set aside. The awards,
which were the subject matter of challenge, and to the extent they were set
aside, are hereby upheld and restored. The direction in the awards, to the
extent they required compounded monthly interest payments, are modiﬁed.
Instead, the NHAI shall pay uniform interest on the amounts due, on the
head concerned, i.e., construction of embankment, to the extent of 12%
from the date of award to the date of payment, within eight weeks from
today. All the above appeals are allowed in these terms. There shall be no
direction to pay costs.

Headnotes prepared by: Appeals allowed.
Nidhi Jain

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