The High Court lacks jurisdiction to appoint an arbitrator in international commercial arbitration, as such powers lie exclusively with the Supreme Court, making any award from improperly appointed tribunals nullities.

ORDER :

Arb.O.P.(Com.Div.) No.141 of 2023 is a petition filed under Section 34 (2)(b)(iii) of the Arbitration and Conciliation Act, 1996 (for brevity, the Act) by one M/s.China Datang Technologies and Engineering Company Limited seeking to set aside an arbitral award dated 09.11.2022 and for a direction to M/s.NLC India Limited to restore the contract performance guarantee amounting to Rs.55.65 Crores encashed on 11.11.2022.

2. Arb.O.P.(Com.Div.) No.333 of 2023 is a petition filed under Section 34 (2) of the Act by the said M/s.NLC India Limited questioning the same award in so far as awarding claims IV and V in favour of the said M/s.China Datang Technologies and Engineering Company Limited and rejection of the counter claim made by said M/s.NLC India Limited were concerned.

3. For the sake of convenience, the parties will be referred to as per their respective rank before the Arbitral Tribunal.

4. The brief facts leading to filing of the above petitions are as follows:

(i) The respondent was required to develop a lignite based thermal power station called Neyveli New Thermal Power Project consisting of two units having the capacity of 500 MW each at Neyveli. The respondent issued a tender dated 19.12.2018 and invited bids for installation of the flue gas de-sulphurisation system. The claimant also submitted its bid on 27.5.2019.

(ii) The respondent issued a letter of award dated 31.8.2019 to the claimant for the works as described in the scope of work for an amount of Rs.556,50,00,000/-. The effective date of the contract was 31.8.2019. The periods stipulated for completion of trial operation and whole of the works for the first unit of 500 MW were 27 months and 30 months respectively from the date of the letter of award. With respect to the second unit of 500 MW, the periods stipulated for completion of trial operation and whole of the works were 33 months and 36 months respectively from the date of the letter of award.

(iii) There were delays in the execution of the works and ultimately, the respondent issued a show cause notice dated 07.7.2020 to the claimant granting 30 days time to them to take appropriate measures to the satisfaction of the respondent, failing which, it was made clear that the contract would be terminated in terms of Clauses 10.30(i) and 10.25 of the contract.

(iv) On receipt of the said show cause notice, a reply was given by the claimant explaining as to why they were not able to mobilise their resources owing to spread of novel corona virus in China and thereafter in India and the subsequent lock downs imposed by the Government of India. The claimant also pointed out certain delays, which were attributable to the respondent. The claimant was also corresponding with the respondent regularly and had commenced the procurement activities and kept the respondent updated.

(v) The claimant, through e-mail dated 25.7.2020, intimated the respondent that they had planned to commence the construction of their site office by 29.7.2020 and requested for gate passes from the respondent. But, the respondent was not convinced with various steps that were taken by the claimant. Further, the respondent issued a letter dated 07.9.2020 terminating the contract. The respondent also invoked the contract performance guarantee and encashed the amount deposited towards it.

(vi) Pursuant to that, the claimant filed O.A.No.493 of 2020 before this Court under Section 9 of the Act seeking to stay the invocation of the contract performance guarantee. The said original application was disposed of by a learned Single Judge of this Court on 12.10.2020. For proper appreciation, the relevant portions in the said order dated 12.10.2020 are extracted