M/s.Neyveli Lignite Corporation Ltd.

(Presently known as M/s. NLC India Limited)

A Company incorporated under the Companies Act1956, and having its Registered Officer at Neyveli House, 135, Periyar EVK High Road, Kilpauk, Chennai-600 010...Petitioner

Vs

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. Lerenzo 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 Neyveli House, 135, Periyar EVK High Road, Kilpauk, Chennai-600 010...Respondents

OSA No. 140 of 2022

Prayer : Original Side Appeal is filed under Clause XV of the Letters Patent read with Section 37 of the Arbitration Conciliation Act, 1996, to set aside the Judgment and Decree, dated 19.08.2021, of the learned Single Judge made in O.P.No.709 of 2016.

A No. 3696 of 2023

Prayer: To order payment of the sum of Rs.66,16,458/- together with accrued interest thereon as on date, which was deposited in terms of order dated 03.10.2016 passed in Application No.5074 of 2016 in O.P.No.709/2016 to the Applicant / Respondent.

For Appellant in OSA

Dr. Veerendra Tulzapurkar, Senior Advocate

No.140/2022 and assisted by Mr. Yashesh Kamdar

Respondents in A.No.3696/2023: Mr. Nahush Shah for Mr.S. Vasudevan

For Respondent in OSA

Mr.AR.L.Sundaresan, Additional Solicitor General of India

No.140/2022 / for applicant in M/s. N. Nithianandam

A.No.3696/2023 : A. Jayaraman

For Sole Respondent

Judgment

(Judgment of the Court was delivered by K.Govindarajan Thilakavadi J.)

The present Original Side Appeal is directed against the order dated19.08.2021 made in O.P. No.709 of 2016, whereby the learned Single Judge dismissed the petition filed by the Appellants under section 34 of the Arbitration and Conciliation Act, 1996, challenging the Arbitral Award dated 12.02.2016.

2. Facts:

2.1. The Appellants are companies belonging to the Ansaldo group and are engaged in the business of Power Project Engineering and supply of power equipment. The Respondent, Neyveli Lignite Corporation Limited, invited global tenders for expansion of its First Thermal Power Station by installation of two units of 210 MW each. The project was divided into several packages. The Appellants were awarded Package - A-01relating to erection of the boiler and a furnace and allied works. The Letter of Award was issued on 10.08.1988. The contracts became effective from 10.12.1988. Under the contracts, the Provisional Take Over (PTO) for unit I was stipulated on 10.10.2001 and for Unit-II on 10.04.2002. The Respondent subsequently granted extension on three occasions, namely, 31.01.2002, 29.04.2002 and 26.09.2002, ultimately extending the period upto 31.03.2003, while expressly reserving its right to levy liquidated damages.

2.2. Disputes arose between the parties concerning delay in completion of the project and the Appellants’ liability for liquidated damages. An Arbitral Tribunal consisting of three members, was constituted.

2.3. The Appellants raised claims seeking, inter alia, extension of time, a declaration that liquidated damages were not leviable and payment of substantial amounts alleged to be due under the contract.

2.4. The Tribunal, by majority award dated 12.02.2016, rejected the claims. Aggrieved by the Award, the Appellants filed O.P. No.709 of 2016 under Section 34 of the Arbitration and Conciliation Act, 1996 (in short “A&C Act, 1996”). The learned Single Judge, by order dated 19.08.2021, dismissed the petition. Hence, the present appeal.

2.5. Dr. Veerendra Tulzapurkar, learned Senior Advocate appearing for the Appellants submitted that the learned Single Judge failed to appreciate that the Tribunal had committed patent illegality in its interpretation of Section 55 of the Indian Contract Act, 1872. According to the learned counsel for the Appellants, time wa