2019 Supreme(Bom) 542

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
R.D. DHANUKA, J.
VESTAS WIND TECHNOLOGY INDIA PRIVATE LIMITED - Appellant
Vs.
INOX RENEWABLES LIMITED - Respondent
Arbitration Petition No. 1088 of 2015, 599 of 2015
Decided On : 01-04-2019

Headnote:

Civil Procedure Code, 1908 – Section 809 - Arbitration and Conciliation Act, 1996 - Sections 34,9,11,11(14) - Indian Contract Act, 1872 – Sections 19,17 - Specific Relief Act, 1963 - Sections 27,29,73 - Claimant that business plan consisted of setting up around 1000 MW of capacity over the next three years. During the said period, the Claimant began the exercise of identifying an appropriate developer who could assist the Claimant in setting up Wind Farm Projects in accordance with the business plan of the claimant. The Respondent represented itself to be a part of the Respondent group which was a world leader in the wind energy business having extensive expertise and exposure in installation of WTGs across the globe - It is the case of the Claimant that the Respondent further represented that it would offer "Turnkey Solutions" for Wind Farm Projects and that the Respondent group had one of the best Research and Development Centers in the world and also had widest range in terms of both technology and capacity. The Claimant received proposals from other three major Wind Farm Project developers. The Respondent also submitted to the Claimant the indicative price of the Wind Farm Project, on a per WTG basis, and a statement of Cash Flow Projections, based on its offered price and claimed electricity generation to indicate the financial performance of the Wind Farm Project set up in accordance with the offer of the respondent - It is the case of the Claimant that the proposal of the Respondent was the obvious choice due to the claimed substantially higher efficiency of its WTG, projected energy generation and the attractive cash flow projections for a period of 20 years represented by the respondent. According to the claimant, the Respondent had claimed and represented that the higher generation was the result of better site selection, better micro-siting and use of the state of the art advanced technology, more efficient WTG and its vast expertise in the field of installation of WTGs worldwide. It is the case of the Claimant that though the price of WTG offered by the Respondent was the highest amongst all the offers received by the claimant, however in view of the specific representations regarding generation estimates coupled with repeated claims of being the provider of most advanced technology and having extensive R & D base worldwide, the Claimant was induced into believing that the proposal of the Respondent was the most attractive proposal vis-a-vis the proposals received from the other developers – Held, In Court view since the Respondent had committed fraud upon the Claimant, the Respondent could not have even otherwise placed reliance on Clause 9.3 or other provisions of the contract in support of the submission that the claim made by the Claimant was contrary to the said provisions. A party who commits a fraud on another party to the contract, cannot seek reliance on a provision so as to take legal undue advantage of such provision – Court view, it would be more appropriate if uniform fees can be introduced in the provisions of the Arbitration and Conciliation Act, 1996 in case of arbitral proceedings held without intervention of the Courts, appointment of arbitral Tribunal under Sections 9 or 11 of the Arbitration and Conciliation Act, 1996 or under Section 89 of the Code of Civil Procedure, 1908 or any other proceedings between the parties where an arbitration agreement is arrived at for the first time, or Arbitral Tribunal appointed by Institutions. Unless uniform fees in the aforesaid proceedings are prescribed and the Rules under Section 11(14) are framed, the problem of exorbitant fees and other charges in the arbitration proceedings, would continue. In my view, till arbitration Rules under Section 11(14) are framed by this Court, fee structure provided in Fourth Schedule would not be binding on the Arbitral Tribunal. In view of the Respondent not having raised any issue about the quantum of arbitral fees demanded by the Arbitral Tribunal, at the relevant time, I am not inclined to accept this objection at this stage - . I shall now deal with the submissions made by the parties in Arbitration Petition No.599/2015. The Claimant has impugned part of the Award rejecting part of the Claim made by the Claimant, thereby restricting the part for which it was entitled to compensation in terms of second part of Section 19 of the Indian Contract Act, 1872 till the date of Award. It was the case of the Claimant that the Claimant was entitled to such compensation for the entire period of 20 years and, thus, the Arbitral Tribunal having rendered various findings in favour of the Claimant, ought to have allowed the claim for the entire period of 20 years. The Claimant has impugned findings of the Arbitral Tribunal in paragraphs 55.7 and 55.8 of the majority Award - It was the case of the Claimant that the final offer letter which included the technical specifications and the cash flow statement, clearly indicated that the life time of WEGs would be 20 years and based on such representation made by the Respondent, the Claimant entered into the Supply Agreement dated 4.1.2007. The Claimant also placed reliance upon the fact that the Respondent was operating WEGs on behalf of the Claimant pursuant to agreements and had signed various Joint Meter Readings reports, acting as authorised representative of the Claimant, which was also countersigned by the authorised representatives of MSEDCL - Petitions dismissed