Back
IN THE HIGH COURT OF DELHI AT NEW DELHI
VIBHU BAKHRU, J.
Satluj Jal Vidyut Nigam Ltd - Petitioner
Versus
Jaiprakash Hyundai Consortium (JHC) - Respondent
O.M.P. (Comm.) 95 of 2020 and IA No. 11175 of 2020
Decided On : 24-12-2021
Arbitration and Conciliation Act, 1996 - Section 34 - Contract and Agreement - Construction Power Supply - Bids - Execution of Civil Works - Arbitral award - Whether impugned award is contrary to terms of the Agreement and is thus, vitiated by patent illegality - Impugned award has been rendered in the context of Contract No.3 under Agreement for execution of Civil Works of Pressure Shaft and Power House Complex of Agreement - Petitioner invited bids for various works including civil works of pressure shafts and power house complex relating to ‘Project’ - JHC submitted its bid and SJVNL awarded the contract for executing Project to JHC by a Letter of Award - Thereafter Agreement was signed between parties for a total value of Rs.475.01 crores. In terms of Agreement, date of commencement of Project and JHC was expected to complete pressure shafts within a period of fifty-seven months, and power complex within a period of sixty-three months from date of commencement of the Project. Resultantly, scheduled date of completion of pressure shafts and power complex.
Finding of the Court: A plain reading SJVNL’s response indicates that it had merely indicated possibility of supplying construction power at 22 KV. It is important to note that minutes records that one of the bidders had expressed a desire for power to be supplied at a higher tension. SJVNL claims that the said query was raised by JHC but, JHC disputes same. This controversy is not material - Court finds no flaw in the decision of Arbitral Tribunal in this regard. First of all, the response of SJVNL at pre-bid meeting is not unambiguous. Second, it is admitted that no amendment was carried out to Clause 4.5(i) of ACC, which clearly provided that construction power would be provided at various sites at 400/440 V. The contention that Arbitral Tribunal had ignored the provisions of pre-bid meeting and this was contrary to a judicial approach, is clearly unmerited. Arbitral Tribunal had examined the controversy and had found SJVNL’s contentions to be unmerited - According to SJVNL, impugned award is contrary to Clause 2.3.8.1 of Technical Specifications. It is also contended that Clause 4.5(i) of ACC cannot be read to mean that SJVNL was required to supply construction power at 400/440 V - Court finds no infirmity with aforesaid view. Plainly, contention that impugned award runs contrary to the terms of Agreement is unmerited and accordingly, rejected - SJVNL had contended before Arbitral Tribunal that disputes had arisen once JHC had accepted the power supply. The said contention was rejected and, in view of this Court, rightly so. JHC had to lay supply lines to install transformers and other equipment. The Arbitral Tribunal had found that process commenced in the month of February 1994 and JHC continued to incur cost for operation and maintenance throughout the period of the contract.
Result: Petition dismissed.
JUDGMENT :
Vibhu Bakhru, J.
1. The petitioner has filed the present petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereafter ‘the A&C Act’) impugning an arbitral award dated 07.11.2007 (hereafter ‘the impugned award’) passed by an Arbitral Tribunal comprising of Shri H.C. Bharadvaj, Shri V.K. Tyagi and Shri R.S. Prasad as the Presiding Arbitrator (hereafter ‘the Arbitral Tribunal’).
2. The impugned award has been rendered in the context of Contract No.3 under Agreement No. 04/93 dated 24.06.1993 for execution of Civil Works of Pressure Shaft and Power House Complex of Naptha Jhakri Hydroelectric Project (hereafter ‘the Agreement’).
Factual Context:
3. The respondent, Jaiprakash Hyundai Consortium (hereafter ‘JHC’), is a consortium between M/s Jaiprakash Associates Limited, a company registered under the Companies Act, 1956 and M/s Hyundai Engineering & Construction Co. Ltd, a company registered under the laws of South Korea. The consortium came into existence by an agreement dated 30.07.1992.
4. In 1992, the petitioner, (hereafter ‘SJVNL’) invited bids for various works including civil works of pressure shafts and power house complex relating to the Naptha Jhakri Hydroelectric Project (hereafter the ‘Project’). JHC submitted its bid and SJVNL awarded the contract for executing the Project to JHC by a Letter of Award (hereafter ‘LOA’) dated 26.05.1993. Thereafter, the Agreement was signed between the parties on 24.06.1993 for a total value of Rs.475.01 crores. In terms of the Agreement, the date of commencement of the Project was 01.07.1993 and JHC was expected to complete the pressure shafts within a period of fifty-seven months, and the power complex within a period of sixty-three months from the date of commencement of the Project. Resultantly, the scheduled date of completion of the pressure shafts and power complex was 31.03.1998 and 30.09.1998, respectively.
5. Admittedly, disputes arose between the parties regarding SJVNL’s failure to perform its obligations under the Agreement. JHC claims that in terms of Sub-clause 4.5(i) of Chapter IV of the Additional Conditions of Contract (ACC) included as an integral part of the Agreement, SJVNL was obligated to provide JHC with AC 3 phase 50 cycle, 440/400 V construction power at various work sites, colonies and offices. However, SJVNL had failed to provide the requisite construction power at 440/400 V, as contracted; therefore, JHC had to incur additional expenses for stepping down and stepping up the power for distribution and consumption at the site.
6. In view of the dispute between the parties, a meeting was held on 09.07.1993 between SJVNL and JHC wherein, SJVNL stated that it would provide 22 KV construction power at various sites while power supply at JHC’s camp would be provided on Low Tension supply (LT Supply), that is, at 440/400 V. By its letter dated 03.09.1993, JHC disputed that the same was in conformity with their contract and it claimed that the relevant clauses of the Agreement imposed an obligation on SJVNL to provide construction power at 440/400 V instead of 22 KV. Subsequently, various meetings were held between the parties between the period 09.10.1993 to 12.10.1993 wherein SJVNL reiterated its stand that the construction power would be provided to JHC at 22 KV only.
7. JHC, by its letter dated 23.12.1993, communicated to SJVNL that it required construction power at 440/400 V at five points – (i) the Main Access Tunnel; (ii) Tail Race Tunnel (TRT) Adit; (iii) Butter Valve House; (iv) Camp and Office; and (v) Fabrication Shop. JHC’s power requirements were also communicated to the General Manager, SJVNL and Deputy General Manager, CD-III Power House to the SE (E E & C) by letters dated 30.12.1993 and 11.01.1994 respectively. Admittedly, the construction power was provided only at one point in the Power House Complex and at one point near the Butterfly Valve House.
8. In view of the above, JHC claimed that it had incurred additional expenditu
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
