Summary
The Supreme Court held that the base rate, rather than current procurement cost, must be used to calculate the material percentage for bitumen under the disputed NHAI price-adjustment formula. Current-price escalation was already addressed by a separate factor; using current costs again distorted weightages and duplicated compensation. Faced with conflicting awards interpreting identical clauses, the Court resolved the issue uniformly for pending challenges, while preserving matters already finally concluded.
Issues
- Whether base or current rates should determine the material percentage under the contractual price-adjustment formula.
- Whether inconsistent payment practice established the parties’ intended interpretation.
- How conflicting arbitral interpretations and the plea of issue estoppel affected pending challenges.
Held
- The note’s reference to “actual” concerned the percentage of materials actually used in the monthly work. Because the work value in the denominator was based on BOQ rates, the material-cost numerator had to use the same base-rate datum. The current-price movement was compensated separately in the escalation factor. (¶¶ 25, 26, 27, 28, 29, 30, 31, 32, 33, 35)
- The contractors’ approach could make combined material percentages exceed their allotted share and turn “other materials” negative, producing unrealistic or duplicated compensation. The Court accepted the Dispute Review Board’s analysis and held that the base rate governed the disputed bitumen calculation. (¶¶ 28, 29, 30, 31, 32, 33, 34, 35)
- Past IPC payments did not establish a consistent shared intention to use current costs: practice varied, and the responsible authorities had directed use of base rates. The majority awards’ reliance on that practice was therefore misplaced. (¶ 34)
- Ordinarily a plausible arbitral interpretation would not be disturbed under Section 34. In the peculiar situation of conflicting awards on identical terms across NHAI contracts, the Court resolved the construction to secure uniformity and certainty. The awards under challenge were contrary to the contract as correctly interpreted. (¶¶ 12, 13, 36, 37)
- Issue estoppel protected matters that had attained finality with no judicial proceedings pending. This interpretation governed pending challenges on the particular price-adjustment issue, including these appeals; it did not reopen finally concluded awards. (¶¶ 24, 37)
Result
All appeals allowed without costs. Impugned judgments and arbitral awards on the bitumen price-adjustment claim set aside.