S.B. Sinha JUDGMENT
S.B. Sinha, J.
INTRODUCTION
1. Oil was discovered in the Bombay High Region in 1974 whereupon a plan of rapid development of off-shore oil and gas production was embarked by the Government of India through Oil and Natural Gas Commission (ONGC). With a view to achieve exploration of production programme, ONGC appointed contractors to fulfill substantial portions of its off-shore construction requirements. Burn Standard Company Limited (for short "BSCL") was interested in the second stage of platform construction of ONGC, i.e., structural and progress fabrication and material procurement. Four contracts were thereafter awarded in favour of BSCL for fabrication, transportation and installation of six platforms bearing No. ED, EE, WI-8, WI-9, WI-10 and N3 and associated pipelines. They were to be installed in ONGC's Bombay High Sea.
CONTRACT
2. The said contracts covered:
(i) Material procurement and fabrication of the ED and EE jackets, piles and decks.
(ii) Transportation and installation of the ED and EE jackets, piles and decks.
(iii) Material Procurement and fabrication of the WI-8, WI-9, WI-10 and N-3 Jackets, piles, temporary decks and decks (the "Four Platform Fabrication Main Contract") and
(iv) Transportation and installation of the WI-8, WI-9, WI-10 and N-3 jackets, piles, temporary decks and decks, and installation of four pipelines and eight risers (the "Four Platform Installation Main Contract").
3. The said contracts contained arbitration agreements. BSCL and McDermott International Inc. (for short "MII") entered into Technical Collaboration Agreement on 25thSeptember, 1984 in terms whereof the latter agreed to transfer technology to the former with regard to design, construction and operation of a fabrication yard. The said agreement contains a separate arbitration clause between the parties. However, with regard to the fabrication and installation of off-shore platforms, BSCL decided to give a sub-contract of the work to MII on a project by project basis. BSCL while retained the job of fabrication of the ED and EE decks, six helidecks and procurement of materials for the overall project other than pipeline materials and some process equipment which was issued by ONGC sub-contracted the remaining work.
4. In terms of a letter of intent dated 14th September, 1984 a contract was entered into by and between BSCL and ONGC for fabrication and installation of offshore platforms ED, EE, WI-8, WI-9, WI-10 and N-3 and laying of WI-8 to WI-9, WI-9 to WI-10, WI-9 to WI-8 and N-3 to NO pipelines and 8 associated risers as well as WI-7 to WI-8, WI-9 to SD, WI- 10 to SV, EB to SC1, EC to SHP, ED to SHP, EE to SHP pipelines and 11 associated risers. A part of the said contract work was assigned to MII in respect of fabrication, transportation and installation of structures, modules, platforms and pipeline components on or about 1st January, 1986. The work under the said agreement was to be completed within 24 months but in all respects it was completed in early 1989.
TERMS OF THE CONTRACT
5. The relevant covenants between the parties contained in the said agreement are as under:
Article 2.
MII shall unless inconsistent with the provisions of this Sub-contract perform fulfill and observe all the obligations, covenants and agreements required on the part of BSCL to be performed, fulfilled and observed in terms of the Main Contracts to the ........