IA No. 4177/2016 (Seeking waiver of deposit)

1. GE T&D India Limited [earlier known as Alstom T & D India Limited (hereafter 'Alstom')] has filed this petition under Section 34 of the Arbitration and Conciliation Act, 1996 (‘Act’) challenging an Award dated 22nd November, 2015 passed by the Facilitation Council, Facilitation Cell, Kanpur (‘hereinafter ‘FC’) in the disputes between Alstom and the Respondent, Reliable Engineering Projects and Marketing (‘REPM’).

2. It is pointed out at the outset by the Petitioner that the impugned Award comprises of two awards passed by the FC, one pursuant to the order dated 29th June, 2015 (Award Part-I) and the other pursuant to the order dated 13th August, 2015 (Award Part-II).

Background facts

3. REPM is a sole proprietorship concern of which Mr. Vijendra Kumar Verma is the Sole Proprietor. It has its office in Ghaziabad, Uttar Pradesh. The Government of India awarded the work of the installation of the Jhajjhar Power Plant to Aravali Power Company Pvt. Ltd. ('Aravali'), a joint venture of NTPC Ltd., Haryana Power Generation Company Ltd and Indraprastha Power Generation Company Ltd. Aravali by a contract dated 15th January, 2008 awarded Alstom a turnkey project for erection and commissioning of Power Transformer Package for Indira Gandhi Super Thermal Power Project (IGSTPP), Jhajjhar in the Aravalli Super Thermal Power Project.

4. On 6th January, 2009, REPM sent a letter to Alstom along with a brief introduction of the Respondent seeking its enlisting as an approved sub-contractor for the Principal Project. Alstom is stated to have engaged REPM for the receipt, unloading, storage, handling at site, installation, in plant transportation at site, insurance, installation testing and commissioning, including carrying out guarantee tests for the complete power package for IGSTPP (‘hereafter referred to as ‘Works’).

5. REPM submitted a quotation for the Works to Alstom on 2nd June, 2009. In response thereto, on 23rd July, 2009, Alstom issued a Letter of Intent to REPM. On 8th September, 2009, Alstom issued a purchase order (‘PO’) bearing reference no. PTI/T-6748/48-52/SEC-II (‘First PO’) for a sum of Rs. 1.2 crores. According to the terms and conditions of the First PO, the completion period was 24 months from the date of site mobilisation. However, Alstom was not to pay the overrun charges. The other terms and conditions were contained in Annexure-B to the PO. Admittedly, the said conditions did not incorporate any clause for referral of disputes between the parties arising out of the First PO to arbitration.

6. Alstom states that due to a change in its SAP system, the First PO was re-issued against the balance/remaining works by a Second PO dated 27th November, 2012. REPM states that it never received the Second PO. What is significant about the Second PO is that it contains an arbitration clause (Clause 25) which reads as under:

“All or any of the disputes/differences arising between the parties with respect to the Contract shall be referred to arbitration by a sole arbitrator mutually agreed by the parties. The arbitration shall be conducted as per the Arbitration and Conciliation Act 1996, as may be amended from time to time. The venue of the arbitration shall be Delhi and the courts in Delhi shall have exclusive jurisdiction.”

7. A meeting took place between the parties on 1st May, 2013 for sorting out the issues concerning the aforementioned PO. The Minutes of the Meeting (‘MoM’) dated 1st May, 2013, a copy of which has been placed on record, states in para 6 that “claim for overrun charges shall be submitted jointly by REPM and Alstom to NTPC after completion of the work.” Annexure-1 to the said MoM listed out the documents required to be submitted by REPM. According to Alstom, the additional works of the value of Rs. 3,30,000 were agreed upon thereafter. The Second PO was amended to incorporate the said additional works on 31st May, 2013 wherein Line Item No. 20 was added. According to