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IN THE HIGH COURT OF JUDICDATURE FOR THE STATE OF TELANGANA AT HYDERABAD
A. RAJASHEKER REDDY, J.
M/s. PPS Enviro Power Private Limited (PPSE) - Applicant
Versus
M/s. Pantime Finance Company Pvt. Ltd. – Respondent
Arbitration Application Nos.142 & 143 of 2013
Decided On : 29-04-2020
Arbitration and Conciliation Act, 1996 - Sections 11 (5) & (6) – Appointment of Arbitrator, to adjudicate the claims & disputes between viz., M/s.Pantime Finance Company Private Limited, represented by its Company Secretary/Managing Director (respondent in Arb.Appl.No.142 of 2013) and M/s.Shri Mahavir Ferro Alloys Private Limited, represented by its Company Secretary/Managing Director - subject matter in both cases pertain to setting up of a Solar Photo Voltaic Plant on turnkey basis i.e., design, engineering, procurement, supply, construction, fabrication, erection, installation, testing and commissioning of 1MWp crystalline silicon based solar photo voltaic power plant at Benta (NH-5), PO-Champagarh, via Tangi, Chandpur, Nayagarh District, Odisha and at Tankajoda village block, Lahunipada, Sundergarh District, Odisha, respectively – Held, Under the Law of Arbitration, unlike the Code of Civil Procedure which applies to suits filed in courts, a reference to "seat" is a concept by which a neutral venue can be chosen by the parties to an arbitration clause - this Court for entertaining the application cannot be a ground for rejecting the instant applications. The decision in PATEL ROADWAYS LIMITED’s case (supra) has no application to the facts of the case as the lis in that case pertains to interpretation of provisions of C.P.C. without reference to the Arbitration Act, 1996 - this Court for entertaining the application cannot be a ground for rejecting the instant applications. The decision in PATEL ROADWAYS LIMITED’s case (supra) has no application to the facts of the case as the lis in that case pertains to interpretation of provisions of C.P.C. without reference to the Arbitration Act, 1996 - Territorial jurisdiction conferred on this Court as per the purchase/work orders does not stand excluded by EPC agreement as such, this Court has territorial jurisdiction to entertain this application. In the circumstances, the Arbitration Application no.142 of 2013 is allowed, as a necessary corollary Arbitration Application No.143 of 2013 is also allowed since the subject matter of dispute and the facts being same, in terms and for the reasons stated therein. Sri Justice Dilip Babasaheb Bhosale, former Chief Justice, is nominated as Arbitrator to resolve the dispute between the parties, and to pass two awards separately in these two matters by taking them up simultaneously, in accordance with law. Miscellaneous applications if any pending in these arbitration applications shall stand disposed of
Facts of the case:
Appoint an Arbitrator, to adjudicate the claims & disputes between viz., M/s.Pantime Finance Company Private Limited, represented by its Company Secretary/Managing Director (respondent in Arb.Appl.No.142 of 2013) and M/s.Shri Mahavir Ferro Alloys Private Limited, represented by its Company Secretary/Managing Director subject matter in both cases pertain to setting up of a Solar Photo Voltaic Plant on turnkey basis i.e., design, engineering, procurement, supply, construction, fabrication, erection, installation, testing and commissioning of 1MWp crystalline silicon based solar photo voltaic power plant at Benta (NH-5), PO-Champagarh, via Tangi, Chandpur, Nayagarh District, Odisha and at Tankajoda village block, Lahunipada, Sundergarh District, Odisha, respectively.
Finding of the Court:
This Court is of the view that territorial jurisdiction conferred on this Court as per the purchase/work orders dated 05-11- 2011 does not stand excluded by EPC agreement dated 08- 11-2011 as such, this Court has territorial jurisdiction to entertain this application. In the circumstances, the Arbitration Application no.142 of 2013 is allowed, as a necessary corollary Arbitration Application No.143 of 2013 is also allowed since the subject matter of dispute and the facts being same, in terms and for the reasons stated therein. Sri Justice Dilip Babasaheb Bhosale, former Chief Justice, is nominated as Arbitrator to resolve the dispute between the parties, and to pass two awards separately in these two matters by taking them up simultaneously, in accordance with law. Miscellaneous applications if any pending in these arbitration applications shall stand disposed of. No order as to costs.
Result: disposed.
ORDER :
The applicant in both these applications i.e. M/s.PPS Enviro Power Private Limited (PPSE), represented by its Director filed arbitration applications under Section 11 (5) & (6) of the Arbitration and Conciliation Act, 1996 (for short, ‘the Act’) to appoint an Arbitrator, to adjudicate the claims & disputes between viz., M/s.Pantime Finance Company Private Limited, represented by its Company Secretary/Managing Director (respondent in Arb.Appl.No.142 of 2013) and M/s.Shri Mahavir Ferro Alloys Private Limited, represented by its Company Secretary/Managing Director (respondent in Arb.Appl.No.143 of 2013).
2. The subject matter in both cases pertain to setting up of a Solar Photo Voltaic Plant on turnkey basis i.e., design, engineering, procurement, supply, construction, fabrication, erection, installation, testing and commissioning of 1MWp crystalline silicon based solar photo voltaic power plant at Benta (NH-5), PO-Champagarh, via Tangi, Chandpur, Nayagarh District, Odisha and at Tankajoda village block, Lahunipada, Sundergarh District, Odisha, respectively. Since the nature of work and the agreements in question are also executed on the same dates with the respondents in both the cases by the applicant, they are taken up for hearing together and suffice it to advert to the facts in Arbitration Application No.142 of 2013.
3. The facts stated are:-the applicant-company is engaged in the business of renewable energy space with focus on creating and sustaining a balance portfolio of product, services and assets across wind and energy space since 2002. The respondent-company is a company incorporated under the Companies Act, 1956, engaged in business of renewable energy. In the month of September 2011, the respondent-company represented by its chief operating officer Mr. Sudhanshu Pati, and Mr. Vicky Jain were introduced to the applicant by Delta Energy Systems India Pvt. Ltd. (hereinafter referred to as “Delta”). Pursuant thereto, the respondent proposed setting up of a Solar Photo Voltaic Plant on turnkey basis. i.e., design, engineering, procurement, supply, construction, fabrication, erection, installation, testing and commissioning of 1MW Crystalline Silicon based Solar Photo Voltaic power plant at Benta (NH- 5), PO-Champagarh, Chandpur, Nayagarh District, Odisha. Subsequently, the parties entered into an Engineering, Procurement and Construction Agreement (“EPC Agreement”) on 08-11-2011. The applicant submits that it gave the quote on 27-09-2011 and in pursuance of the quote, the respondent issued 2 work orders (PTFCPL/11-12/Slr/8, dated 05-11-2011 and PTFCPL/11-12/6, dated 05-11-2011) and 1 purchase order (PTFCPL/11-12/7, dated 05-11-2011); executed on 22-11-2011. The applicant submits that Advance Bank Guarantees (ABG) for three months period for payment of mobilization advance of Rs.2.12 crores was furnished to the respondent. The respondent had paid only a sum of Rs.1.7 crore against the advance amount in parts during the contract period, and the balance amount was still not been paid to the applicant leaving a substantial balance towards mobilization advance. The applicant proceeded to mobilize materials, resources by ordering out material paying advances, opening letters of credit (LC), carrying on civil works at site, etc., the letter of credit of the applicant with its vendor Delta was encashed by Delta. That the respondent cited financial incapability and had requested the applicant to complete the project on time else this might cause irreparable loss to it and would result in loss of the generation based incentive announced by the Government of India through their Rooftop PV & Small Solar Power Generation Programme (RPSSGP). That the applicant completed the project and synchronized the same with the State utility grid facility though the respondent could not release the advance amounts, payments against Inland Letters of Credit despite several reminders by the applicant.
4. On 21-02-2012, when the Advance Bank Gu
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