The KMRCL Arbitral Award Upheld ruling saw the Calcutta High Court dismiss an appeal filed by ITD-ITD CEM Joint Venture against Kolkata Metro Rail Corporation Ltd. (KMRCL). The Division Bench found no reason to interfere with the arbitral award that rejected claims worth about ₹205.70 crore. The Court also upheld the Single Judge’s order dated May 8, 2026, and reaffirmed the limited scope of judicial review under Section 34 of the Arbitration and Conciliation Act.
Background of the Dispute
The dispute arose from a contract executed on March 10, 2010, for constructing the underground metro section between Central Station and Subhas Sarovar as part of the Kolkata East-West Metro project.
The contract was originally valued at ₹908.63 crore. Later, the parties revised it to ₹1,279.81 crore after changes to the project alignment. They formalized the revised value through an amendment issued on November 8, 2016.
Claims Raised by the Contractor
The arbitral tribunal rejected two major claims in November 2019.
The contractor sought approximately ₹177.77 crore towards additional establishment costs and ₹27.93 crore as interest on retention money. After the tribunal rejected both claims, the joint venture challenged the award before a Single Judge. When that challenge failed, it filed the present appeal before the Division Bench.
Arguments Before the High Court
The joint venture argued that the arbitral tribunal had incorrectly interpreted the contract and wrongly rejected both claims.
Kolkata Metro Rail Corporation Ltd. contended that the tribunal adopted a reasonable interpretation of the agreement. It argued that the award did not justify judicial interference.
Court’s Findings on Establishment Costs
The Division Bench closely examined the arbitral award and found no error in the tribunal’s reasoning.
The Court held that the tribunal’s interpretation was neither perverse nor patently unreasonable. It also found that the tribunal had considered the relevant contractual provisions before reaching its conclusion.
Findings on Interest on Retention Money
The Court also rejected the challenge relating to interest on retention money.
It observed that the tribunal carefully examined the contractual clauses, the recovery made, the contract notifications, and the eventual release of the retention amount. Since the tribunal adopted a plausible view, the High Court refused to substitute its own interpretation.
Appeal Dismissed
The KMRCL Arbitral Award Upheld judgment dismissed the appeal in its entirety. The Court held that appellate courts cannot re-evaluate evidence or reinterpret contractual terms merely because another interpretation is possible.
The ruling reinforces the settled principle that courts exercising powers under the Arbitration and Conciliation Act will interfere with arbitral awards only in limited circumstances. It also highlights the judiciary’s consistent approach of respecting arbitral findings when tribunals have properly examined the contract and the evidence.
