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IN THE HIGH COURT OF JUDICATURE AT MADRAS (ORDINARY ORIGINAL CIVIL JURISDICTION) THURSDAY, THE 19TH DAY OF AUGUST 2021 THE HON'BLE MR. JUSTICE N. SATHISH KUMAR O.P. No.709 of 2016 In the matter of Section 34 of the Arbitration & Conciliation Act, 1996.
And In the matter of Arbitration Award dated 12th February 2016 received by the Petitioners on 15th February 2016 passed by the Arbitral Tribunal in the disputes arising out of the four Contracts dated 10th December 1998.
1. Ansaldo Energia S.P.A. duly organised and existing under the Laws of Italy with its Principal Office at Via N.Lorenzi, 8, 16152 Genova, Italy. Represented by its authorized signatory Mr.Lorenzo Pesenti 2. Asia Power Projects Private Limited, [formerly Known as Ansaldo Services Private Limited], a Company incorporated under the Companies Act, 1956, and having Registered Office at 6, Lakeside Residency, 4, Annaswamy Mudaliar Road, Bangalore – 560 042.
Represented by its Director Mr.Lorenzo Pesenti ... Petitioners -Vs-
M/s. Neyveli Lignite Corporation Ltd., a Company incorporated under the Companies Act, 1956, and having its Registered Office at Neyveli House, 135, Periyar EVK High Road, Kilpauk, Chennai – 600 010. ... Respondent Original Petition praying that this Hon'ble Court be pleased to (a) set aside the Impugned Award dated 12th February, 2016; and (b) stay the effect and operation of the Impugned Award dated
12th February, 2016, pending the hearing and final disposal of the present petition.
This Original Petition having been heard on 29/07/2021 in the presence of Dr.Veerendran Tulzapurkar with Mr.Nikhil Sakhardane Nahush Shah for Mr.M.N.Balaji, advocates for the petitioners herein and Mr.T.R.Rajagopalan, Senior Counsel for Mr.N.Nithianandan, advocates for the respndent herein and upon the reading the petition and the award dated 12/02/2016 filed herein and having stood over for consideration till this date and coming on this day before this court for orders in the presence of the said advocates for the parties hereto and this court having observed that this court is unable to persuade itself to countenance the submissions made by the learned Senior Counsel to hold that the award is vitiated and violates the fundamental policy of India and Conflict to the public policy and none of the grounds contemplated in Section 34 of the Arbitration and Conciliation Act is made out to interfere the detailed award passed by the Arbitral Tribunal and, it is ordered as follows:-
That the O.P.No.709 of 2016 be and is hereby dismissed.
WITNESS THE HON'BLE MR. JUSTICE SANJIB BANERJEE, CHIEF JUSTICE, HIGH COURT AT MADRAS AFORESAID, THIS THE
19TH DAY OF AUGUST 2021.
Sd/-
ASSISTANT REGISTRAR (O.S-II)
//Certified to be true copy//
Dated at Madras this the day of 2021.
COURT OFFICER(O.S.)
From 25th Day of September 2008 the Registry is issuing certified copies of the Orders/Judgments/Decrees in this format.
ED
22.10.2021 O.P.No.709 of 2016 ORDER DATED :19.08.2021 THE HON'BLE MR.JUSTICE N.SATHISH KUMAR FOR APPROVAL: 27.10.2021 APPROVED ON : 27.10.2021 IN THE HIGH COURT OF JUDICATURE AT MADRAS Reserved on Delivered on
29~07~2021 19 ~08~2021 C O R A M:
THE HONOURABLE Mr.JUSTICE N.SATHISH KUMAR Original Petition No.709 of 2016
1. Ansaldo Energia S.P.A. duly organised and existing under the Laws of Italy with its Principal Office at Via N.Lorenzi, 8, 16152 Genova, Italy.
2. Asia Power Projects Private Limited, [formerly Known as Ansaldo Services Private Limited], a Company incorporated under the Companies Act, 1956, and having registered Office at Neyveli House, 135, Periyar EVK High Road, Kilpauk, Chennai – 600 010. ... Petitioners Vs M/s.Neyveli Lignite Corporation Ltd., a Company incorporated under the Companies Act, 1956, and having its Registered Officer at Neyveli House, 135, Periyar EVK High Road, Kilpauk, Chennai – 600 010. ... Respondent Petition filed under Section 34 of the Arbitration and Conciliation Act, 1996, to set aside the impugned award dated 12.02.2016.
For petitioners ... Dr.Veerendran Tulzapurkar with Mr.Nikhil Sakhardane Nahush Shah for M.N.Balaji For respondent ... Mr.T.R.Rajagopalan, SC for Mr.N.Nithianandan - - - - -
O R D E R
Challenge has been made to the Arbitral Award passed by the Three Member Tribunal consisting of the former Judges of the Honourable Supreme Court. The parties are arrayed as per their own rankings before the Tribunal.
2. The Claimants Companies are the members of the Ansaldo Group of Companies and carry on business as power project engineers and power equipment suppliers. The Respondent is the Public Limited Company, invited global tenders for expansion of its First Thermal Power Station (TPS-I) at Neyveli by installation of two unites viz., Unit-1 and Unit-2, each of 210 MW capacity for generation of Electricity. NLC, the Respondent invited global tender for the project which was huge work so the entire project was divided into 23 packages and divide among several contractors. The subject matter of the Contract under dispute in respect of the package called A-01 which involved erection of a Boiler encased in a furnace. Accordingly, tenders invited from global tenderers called for A1 main plan package on 02.04.1997. The claimants become successful bidders. Accordingly, Letter of Award (LOA) was issued on 10.08.1998. The work covered by the letter of award was divided into four contracts. Contract Nos.1 and 2 between the 1st Claimant and 1st Respondent i.e., Ansaldo and NLC; and the Contract No.3 and 4 between the 2nd Claimant and Respondent i.e., Asia Power Projects vs. NLC. Contract No.1was in respect of design engineering, fabrication, manufacturing, procurement and supply of offshore equipment. Contract No.2 was in respect of Foreign Supervisory services related to supervision of erection, testing and commissioning and demonstration of performance parameters. Contract No.3 was in respect of design engineering, fabrication, manufacturing, procurement and supply of onshore equipment and Contract No.4 relating to construction of services, site engineering, civil engineering construction works and supply at site of all material and fabrication of building steel structures, erection, testing, commissioning, customs clearance in inland transportation of the equipment and material.
3. Effective date of contract was 10.12.1998. The commissioning of Unit-I was to be 39 months and Unit-II was to be 45 months from the effective date of the Contracts. The successful commissioning of units were determined in two stages. The first was the date of Provisional Take Over (PTO) which followed on the successful completion of the trial operation of the respective unit evidenced by a certificate signed by NLC, its consultant MECON and the concerned contractor. The second was the formal acceptance by NLC of the unit on its successful commissioning evidenced by a similar certificate as the one above. As per the contract the dates for the PTOs of the two Units were 10.10.2001 for Unit No.1 and 10.04.2002 for Unit No.2 respectively. However, NLC granted extension three times on 31.01.2002, 29.04.2002 and 26.09.2002 upto 31.3.2003. These extensions were granted `reserving NLC’s right to levy Liquidated Damages as per the terms contained in 4.9 in the contract. Hence, the main contention of the Claimant is that as a contract provides for extension of time for both the units the levy of Liquidated Damages by NLC was not justified and it is also contended by the claimant that the delay for completion of works only attributatble to the respondent. The completion of work depends upon the work of the other 22 projects. Hence it is the contention of the claimant that reciprocal obligations has not been complied completion of other work in other packages has not been done. The claimant prayed the following relief for award ordering the extension of time for Provisional Take Over for Unit- I upto 05.06.2003 and for Unit No.2 up to 23.10.2003 or upto such further or other dates as the Tribunal may consider proper; to direct NLC not to levy any LD against the Claimants and to direct the NLC to pay the claimants amount of Rs.46,50,91,655 alleged to be
