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2022 Supreme(Del) 2161
IN THE HIGH COURT OF DELHI AT NEW DELHI
VIBHU BAKHRU, AMIT MAHAJAN, JJ.
Eastern Coalfields Limited - Appellant
Versus
India Power Corporation Ltd. (formerly known as DPSC limited) - Respondent
FAO(OS) (COMM) 143 of 2022 & CM APPL. 26216 of 2022, CM APPL. 26217 of 2022, CM APPL. 26218 of 2022, CM APPL. 26219 of 2022, CM APPL. 26220 of 2022.
Decided on : 06-07-2022
Advocate Appeared:
For the Appellant : Mr. Anupam Lal Das, Sr. Adv. With Mr. Parijat Kishore, Mr. Anirudh Singh, Mr. Krishanu Bavaru & Mr. Saurabh Tanwar, Advs.
For the Respondent: Mr. Anirban Bhattacharya and Mr. Rajeev Chowdhary, Advs.
The Arbitrator's findings on questions of fact are not amenable to judicial review unless virtually impossible to arrive at such findings based on the record, striking at the root of the disputes, and vitiating the award on the ground of patent illegality.
Headnote:
Arbitration - Eastern Coalfields Limited - Arbitration and Conciliation Act - Section 34
Fact of the Case:
ECL appealed under Section 37(1)(c) of the Arbitration and Conciliation Act to set aside an arbitral award. The dispute arose from an agreement between ECL and IPCL for a Thermal Power Plant lease. IPCL claimed WDV and additional expenditure, while ECL raised counter-claims. The Arbitral Tribunal allowed IPCL's claim and ECL challenged the award under Section 34 of the A&C Act.
Finding of the Court:
The court found ECL's challenges unmerited, as the impugned award was final, based on evaluation of available material, and not vitiated by patent illegality. ECL's appeal was dismissed.
Issues: Dispute over WDV quantification, rejection of ECL's application for amendment of counter-claims, and challenge to the impugned award's legality.
Ratio Decidendi: The Arbitrator's findings on questions of fact are not amenable to judicial review unless virtually impossible to arrive at such findings based on the record, striking at the root of the disputes, and vitiating the award on the ground of patent illegality.
Final Decision: ECL's appeal was unmerited and dismissed, with all pending applications also dismissed.
JUDGMENT :
VIBHU BAKHRU, J.
1. Eastern Coalfields Limited (hereinafter ‘ECL’) has filed the present appeal under Section 37(1)(c) of the Arbitration and Conciliation Act (hereinafter ‘the A&C Act’) impugning an order dated 29.10.2021 (hereinafter ‘the impugned order’) passed by the learned Single Judge, whereby ECL’s application under Section 34 of the A&C Act, seeking to set aside an arbitral award dated 15.02.2021 (hereinafter ‘the impugned award’), was rejected
FACTUAL BACKGROUND
2. On 30.03.1987, ECL entered into an agreement (hereinafter ‘the Agreement’) with the respondent (hereinafter ‘IPCL’), for construction, erection and successful commissioning of a 2x10 MW Thermal Power Plant at Chinakuri Mining Complex (hereinafter ‘the Power Plant’). Subsequently, on 31.03.1993, the parties entered into a lease deed (hereinafter ‘the Lease Deed’) for a period of twenty years commencing from 01.04.1991 for lease of the Power Plant along with land, buildings and quarters, plant and machinery. In terms of the Agreement, IPCL was entitled to the written down value (hereinafter ‘WDV’) of the assets upon handing over the Power Plant in a good running condition to ECL on expiry of the Lease Deed.
3. After execution of the Lease Deed, IPCL commissioned an additional power plant of 1x10 MW capacity.
4. On 31.03.2011, as the Lease Deed expired by efflux of time, IPCL made a request for renewal of the said Lease Deed for a further period of twenty years, however, ECL extended the Lease Deed for a period of one year, that is, till 31.03.2012.
5. On expiry of the Lease Deed on 31.03.2012, IPCL claimed that it was entitled to the WDV of the assets including additions and alterations made by it to the Power Plant, quantified at Rs,24.7256 crores. ECL requested IPCL for possession of the Power Plant and claimed that handing over possession of the Power Plant was not conditional upon payment of the WDV. Further, ECL also requested IPCL to supply corroborative material to substantiate its claim against the WDV.
6. Disputes arose between the parties in connection with the Agreement dated 30.03.1987. IPCL filed a Writ Petition under Article 226 of the Constitution of India seeking directions be passed to ECL to pay the WDV. The said petition was disposed of by the Calcutta High Court on 19.03.2013.
7. Thereafter, IPCL filed a Special Leave Petition before the Supreme Court against the aforesaid order. The Supreme Court, by an order dated 17.10.2014, appointed the learned Sole Arbitrator to adjudicate the said disputes between the parties.
ARBITRATION
8. Before the Arbitral Tribunal, IPCL claimed an amount of Rs,24.7256 crores on account of the WDV; and, an amount of Rs,25.81 crores towards additional expenditure for operating and maintaining the Power Plant. IPCL further claimed interest on the aforesaid amounts at the rate of 18% per annum from 01.04.2012 till the date of payment.
9. ECL contested the claims raised by IPCL. ECL claimed that payment of the WDV was not a pre-condition to deliver peaceful possession of the Power Plant. ECL further claimed that IPCL had not submitted sufficient proof for the WDV, as actual receipts regarding the purchase of plant and machinery were not produced. ECL also raised several counter-claims. It claimed an amount of Rs,26,11,94,323/- on account of the rent due; an amount of Rs,57.32 crores on account of illegal enhanced tariff towards the coal price; an amount of Rs,2,49,56,138.95/- towards the outstanding coal bill; an amount of Rs,305.38 crores towards compensation; and, an amount of Rs,9,18,76,046/- towards the security deposit.
10. By the impugned award, the Arbitral Tribunal allowed the claim of IPCL for an amount of Rs,24.7256 crores along with interest at the rate of 9% per annum from 06.10.2016 till the date of payment, on account of the WDV. The Arbitral Tribunal further allowed the counter-claim of ECL for an amount of Rs,18,66,86,521/- along with interest at the rate of 9% per annum from 06.10.2016 till the date
