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IN THE HIGH COURT OF DELHI
Vibhu Bakhru, J.
Tata Projects Ltd. - Appellant
Versus
NTPC Limited - Respondent
O.M.P. (COMM) 139 of 2021 and O.M.P. (COMM) 171 of 2021 and IA Nos. 6288 of 2021 & 6289 of 2021
Decided On : 08-12-2021
| Table of Content |
|---|
| 1. factual context regarding the arbitration (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11) |
| 2. disputes and claims due to project delays (Para 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19) |
| 3. procedural aspects of arbitration initiation (Para 21 , 22 , 23 , 24) |
| 4. arbitral tribunal's findings on claims (Para 25 , 26 , 27 , 28 , 29 , 30) |
| 5. court's review and rationale for award dismissal (Para 41 , 42 , 43 , 44 , 45 , 46) |
| 6. legal interpretation regarding responsibility for delays (Para 47 , 48 , 49 , 50 , 51) |
| 7. ruling on service tax and reimbursement issues (Para 59 , 60 , 61 , 62) |
JUDGMENT
Vibhu Bakhru, J. The parties have filed these petitions under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter the `A&C Act') impugning an Arbitral Award dated 01.12.2020 (hereinafter the `impugned award') passed by the Arbitral Tribunal constituted of three members, Justice (Retd.) Badar Durrez Ahmed, Justice (Retd.) Mukul Mudgal and Justice (Retd.) Dr. Mukundakam Sharma as the Presiding Arbitrator (hereinafter `the Arbitral Tribunal').
2. The impugned award has been rendered in the context of disputes that have arisen between the parties in relation with the agreements dated 12.09.2014 for execution of certain works relating to the Lara Super Power Thermal Project.
Factual Context
3. On 05.06.2014, NTPC issued an Invitation for Bids (IFB) for the works regarding "Coal Handling Plant Package for Lara Super Power Thermal Project, Stage 1 (2 x 800 MW)" (hereinafter `the Project'), on the terms and conditions stipulated therein.
4. Pursuant to the said IFB, Tata Projects Ltd. (hereinafter `TPL') participated in the two stage bidding process. It submitted its bids for executing the Project works: Techno Commercial Bid dated 27.06.2014 (Stage I) and Price Bid dated 13.08.2014 (Stage II). TPL also submitted a discount letter dated 14.08.2014. TPL's bid was accepted and thereafter, NTPC issued three Notifications of Awards dated 26.08.2014 (hereinafter `NoA') in favour of TPL.
5. The effective date of commencement of the contract was 26.08.2014 and Unit No.1 was to be executed within a period of thirty months and Unit no.2 was to be executed within thirty-four months from the effective date of commencement of the contract.
6. Thereafter, on 12.09.2014, three `Contract Agreements' (hereinafter collectively referred as the `Agreements') were signed between the parties for a total consideration of EURO 5,10,000/- and Rs.321,95,59,742/-. The details of the three Agreements are tabulated below:
| Contract Agreement [CS-9548-155(R)-2-FC-COA-6200] for contract price of EUR 5,10,000/- (hereinafter referred to as `Foreign Supply Contract') | Design, engineering, manufacture, procure, shop fabrication, testing, inspection at manufacturers works, packing, supply, forwarding and dispatch of offshore plant arid equipment on CIF (Indian Port-of-Entry) basis for the Coal Handling Plant Package for Lara Super Power Thermal Project, Stage 1 (2 x 800 MW). |
| Contract Agreement [CS-9548-155(R)-2-FC-COA-6201] for contract price of Rs.195,38,42,140/- (hereinafter referred to as `Domestic Supply Contract') | Design, engineering, manufacture, procure, testing, inspection at manufacturers works, packing, supply, forwarding and dispatch of plant and equipment on Ex- Works (India) supply basis for the Coal Handling Plant Package for Lara Super Power Thermal Project, Stage 1 (2 x 800 MW) |
| Contract Agreement [CS-9548-155(R)-2-FC-COA-6202] for a contract price of Rs.126,57,17,602/- (hereinafter referred to as `Services Contract') | In-land Transportation, Inland Insurance, Erection, Testing, Commissioning and conducting guarantee tests of the Coal Handling Plant Package for Lara Super Power Thermal Project, Stage 1 (2 x 800 MW) |
7. The works under the aforesaid three Agreements were awarded on a lump sum basis. The Agreements for supply - the Domestic Supply Contract and Foreign Supply Contract - were exclusive of taxes and duties and, the Agreement
Arbitral tribunals have discretion over fact-finding, and courts should not re-evaluate evidence unless decisions violate public policy or involve patent illegality.
The Arbitral Tribunal's interpretation of reimbursement based on actual costs incurred due to statutory changes is valid, despite disputes over contract terms, reinforcing the principle of contractua....
Point of law: Scope of examination under Section 34 is limited. The decision of the Arbitral Tribunal regarding consideration and interpretation of the Contract is final and this Court cannot supplan....
Every error of law committed by an arbitral tribunal does not fall within the scope of the patent illegality. However, the Court had also clarified that illegality, which goes to the root of the matt....
The Arbitral Tribunal has considerable discretion in evaluating evidence and interpreting contract clauses, and its decision cannot be interfered with unless found to be patently illegal or in confli....
The Arbitral Tribunal's decision falls within its jurisdiction and does not amount to patent illegality, as it was based on a plausible interpretation of the exclusionary clause in the contracts and ....
The court upheld the tribunal's award, concluding that the claims did not fall under 'excepted matters' and corroborated the contractor's entitlement to claims based on inadequate adjudication by the....
The main legal point established in the judgment is that the decision of the arbitral Tribunal is entitled to substantial discretion in awarding interest, and the court does not sit as the first appe....
The main legal point established in the judgment is the correct interpretation and application of contractual provisions in arbitration disputes.
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