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IN THE HIGH COURT OF DELHI
Vibhu Bakhru, J.
NTPC Ltd. - Appellant
Versus
Tecpro Systems Ltd. - Respondent
Arb. A. (COMM.) 58 of 2021
Decided On : 29-10-2021




The scope of interim relief under Section 17 of the Arbitration and Conciliation Act is strictly limited to matters directly aiding the final relief sought in arbitration.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 37(2)(b) - Appeal against orders of Arbitral Tribunal - NTPC alleges that TSL's claims arise from NTPC's breach of contract, including delays and termination thereof - TSL claims entitlement to damages and specific performance - Arbitral Tribunal ordered maintenance of status quo, which NTPC contested. (Paras 1-2, 24-30)

(B) Scope of interim measures under Section 17 of A&C Act - The power of an Arbitral Tribunal to issue interim measures is confined to matters directly in aid of the final relief sought. (Paras 25-28)

(C) Substantive disputes in arbitration - TSL's petitions concerning termination of contracts fall outside the immediate jurisdiction of the Arbitral Tribunal. (Paras 27-29)

Facts of the case:
The dispute revolves around NTPC's alleged failures under supply contracts for a coal handling project, leading TSL to invoke arbitration for damages exceeding INR 422 crores. The contracts were subsequently terminated by NTPC, prompting TSL's application for interim reliefs.

Findings of Court:
The Court ruled that the Arbitral Tribunal exceeded its authority in granting TSL's application under Section 17, hence set aside the orders for status quo and joint measurements.

Issues: The core issues addressed include whether the Arbitral Tribunal has jurisdiction to grant substantive relief on contract termination and the scope of interim measures it can issue.

Ratio Decidendi: The court reasoned that orders under Section 17 must directly relate to aiding the final relief sought in arbitration; thus, TSL's requests for preservation of contracts were outside the tribunal's jurisdiction in the present context.

Result: Appeal allowed and impugned orders set aside.

Table of Content
1. background on arbitration related to contracts. (Para 1 , 2 , 3 , 4 , 5 , 6)
2. claims and counterclaims of ntpc and tsl. (Para 7 , 8 , 9 , 10 , 11 , 12 , 13)
3. legal arguments regarding arbitration proceedings. (Para 14 , 15 , 16 , 17 , 18)
4. court's analysis on interim orders relevance. (Para 19 , 20 , 21 , 22 , 23)
5. limits of arbitral power under section 17 of the a&c act. (Para 24 , 25 , 26 , 27 , 28 , 29)
6. court's decision on the appeal and orders. (Para 30 , 31 , 32)
7. final directions and reservation of rights. (Para 33 , 34)

JUDGMENT

[Hearing held through video conferencing]

Vibhu Bakhru, J. (Oral)--The appellant (hereafter `NTPC') has filed the present appeal under Section 37 (2)(b) of the Arbitration and Conciliation Act, 1996 (hereafter `the A&C Act'), inter alia, impugning the orders dated 14.09.2021 and 29.09.2021 passed by the learned Arbitral Tribunal. Insofar as the order dated 14.09.2021 is concerned, NTPC assails the same to the limited extent that it directs maintenance of status quo with respect to the subject Projects.

2. The Arbitral Tribunal is in seisin of the dispute between the parties relating to Supply and Services Contracts dated 17.05.2011 for Coal Handling Plant Package for Pakri Barwadih Coal Mining Project (main CHP Contracts); and the Supply and Services Contracts dated 20.10.2011 for the Extended Coal Handling Plant Package for Pakri Barwadih Coal Mining Project Block (extended CHP Contracts).

3. The respondent (hereafter `TSL') claims that it is an established Engineering Procurement and Construction (EPC) Contractor and is engaged in providing turnkey solutions, inter alia, in respect of bulk material handling systems for cement, power and steels sectors.

4. NTPC is a public sector undertaking and was allocated the Pakri Barwadih Coal Block in Hazaribagh District of Jharkhand.

5. On 01.02.2010, NTPC issued invitation for bids for supply of installation of Coal Handling Plants Package Pakri Barwadih Coal Mining Block. The petitioner applied for the tender documents and on 20.02.2010 submitted its proposal for executing the works relating to the said Project. Thereafter, on 31.03.2011, NTPC issued the Notification of Award awarding the said contracts to TSL. Thereafter, NTPC issued another invitation for the extended supply and installation of the Coal Handling Plants package for Pakri Barwadih Coal Mining Block. TSL submitted its proposal pursuant to the said invitation. NTPC accepted the same and issued a Notification of Award dated 05.10.2011 for the extended supply and installation of CHP Package for Pakri Barwadih Coal Mining Block.

6. In the meantime, on 17.05.2011, NTPC and TSL entered into two separate Contracts for the Supply and Services respectively for setting up the facilities. Thereafter, on 20.10.2011, the parties entered into two further Contracts referred to as `extended First Contract' and `extended Second Contract'.

7. TSL claims that NTPC has failed and neglected to perform its obligations for due performance of the contracts in question including failure to timely hand over of encumbrance free work front; interfering extensively in execution of the project, which disrupted the works and inordinately delayed their completion; and, failure to make timely payments, amongst other breaches.

8. TSL claims that in view of the above, the execution of the contracts in question were delayed entirely for the reasons attributable to NTPC. TSL claims that since it was understood that NTPC was responsible for the delays, it also granted repeated extensions for completion of the contracts in question.

9. TSL claims that it is entitled to recover all costs incurred by it in carrying out the works for setting up the facilities and in addition, is entitled to be compensated for all loss and damages suffered as a consequence of breach on the part of NTPC in performing its obligations in a timely manner. TSL has also made a claim in respect of wrongful inv

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