The main legal point established is that the force majeure condition did not discharge the petitioner's obligation as per the terms of the Purchase Order, and Section 56 of the Indian Contract Act did not apply to the supply of materials under the Purchase Order.

1. This petition has been filed under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the ‘Act’) challenging the Interim Award dated 31.10.2017 passed by the Arbitral Tribunal appointed by the parties in terms of Clause 16 of the Purchase Order No.B3V6474 dated 03.01.2014. The Arbitral Tribunal by its Impugned Award has inter-alia held as under :

“194. For the foregoing reasons, the Tribunal renders the following decisions :

(a) the Purchase Order is subject to Indian law;

(b) the Purchase Order was frustrated with effect from 27 March 2015;

(c) Claimant is entitled to rely upon, and Respondent is in breach of, the provisions of Clause 25 of the Purchase Order;

(d) the jurisdiction of the Tribunal to hear the Parties on damages arising from the said breach is expressly reserved, as is the Tribunal's jurisdiction as to costs.”

2. The facts giving rise to the disputes between the parties can be summarised as under :

(a) The petitioner was charged with the construction of a power plant in Marib, Yemen by the Public Electric Company of Yemen(PEC);

(b) On 29.04.2013, the petitioner commenced an internal process to identify the potential vendors for delivery of four identical Exhaust Gas Systems (EGS) for a gas turbine used in the Marib Project, to be supplied in two lots of two systems each;

(c) On 03.01.2014 the petitioner issued a Purchase Order in favour of the respondent for supply of four identical Exhaust Gas Systems along with supervision for Erection and Commissioning of the same for the Marib Project in Yemen. The EGS was to be delivered by the respondent in two lots that is Lot-1 (Unit 1 and 2) and Lot-2 (Unit 3 and 4). The total value of the contract was EUR 7,901,710.12;

(d) On 04.12.2014 an amendment was agreed between the parties by which the delivery of the Lot-1 was changed from 03.11.2014 to 11.01.2015, whereas for Lot-2 it was revised from 03.02.2015 to 13.04.2015. Certain supplies were made by the respondent to the petitioner in terms of the Purchase Order and payments thereof were also made by the petitioner to the respondent and there is no dispute between the parties in relation to such supplies. The disputes between the parties relates only to the delivery of Indian Components of Unit 3 and 4 of Lot-2;

(e) It is the case of the petitioner that on 21.01.2015, the Government of India had put a travel advisory asking the Indians to leave Yemen and to avoid all travel to Yemen due to deterioration of the political situation in Yemen;

(f) The petitioner, on 20.02.2015 wrote to the respondent to put on hold with immediate effect the Purchase Order till further communication. The relevant extracts from this letter are as under :-

“Due to current political turmoil in Yemen, our customer has put hold on accepting further supplies for Marib Ph-II Project till further communication. The matter is being discussed with our customer.

However, in view of the above extra-ordinary situation, hold is being placed with immediate effect on BHEL's above mentioned purchase order till further communication. Accordingly, hold may be placed by you on all activities including dispatch/shipment related to this purchase order till further communication from BHEL.

We regret for the situation and thank in advance for your understanding.”

(g) The respondent by its letter dated 20.02.2015 inter-alia informed the petitioner that Unit 3 was complete and had been successfully inspected by Llyods, the Inspecting Agency, while Unit 4 was in a very final stage of completion and recommended that the work of Unit 4 should be completed and then stored in accordance with Clause 25 of the Purchase Order until further notice from the petitioner. The contents of this letter are important and reproduced herein below :

“Reference is made to your notification of hold for further supplies which we have received today.

From your notification it is understood that all activities including dispatch are to be put on hold which would