Summary
The Supreme Court rejected a concessionaire’s claim to match the lowest tender without participating in the bidding process. The published, unchallenged tender terms expressly required participation, and the earlier arbitral order granting a right of first refusal contained no express exemption. The later interim direction and its High Court confirmation were set aside.
Issues
- Whether the concessionaire could exercise a right of first refusal without bidding despite the express tender conditions.
Provisions considered
- Section 17, Arbitration and Conciliation Act, 1996The later interim relief was tested against tender fairness and the absence of an express participation exemption. The validity of the unchallenged earlier order under section 17 was left undecided. (¶¶ 17, 18, 19, 20, 21, 24, 25)
Held
- The tender required technical and financial bids. Deemed satisfaction of eligibility requirements if the existing concessionaire participated did not exempt it from participation. Staying outside the process defeated its claim under those unchallenged terms. (¶ 18)
- An exemption from bidding could not be inferred from the earlier order’s silence. It had to be expressly sought, granted and disclosed in the tender. Failure to bid lost the opportunity to match the lowest offer. (¶¶ 19, 20)
- Tendering promotes transparency, competition, equal opportunity and value for money. Absence of prejudice to NHAI alone was insufficient; competing bidders’ rights also mattered. Prior investment and substantial completed work did not justify overriding the tender requirements. (¶¶ 18, 21, 22)
- The Court did not decide whether the earlier right-of-first-refusal direction itself could validly be made under section 17, because that order remained unchallenged. (¶ 20)
Result
Appeal allowed. Arbitral order dated 24 May 2017 and High Court order dated 21 August 2017 set aside; concessionaire’s section 17 application dated 25 April 2017 dismissed. No costs.