OMP No.429/2004 Page 1 of 6

* IN THE HIGH COURT OF DELHI AT NEW DELHI

Date of Reserve: April 30, 2009

Date of Order: July 14, 2009

+ OMP No.429/2004

%

14.07.2009

POWER GRID CORPN. OF INDIA .... Petitioner

Through : Mr. S.B. Upadhyay, Sr. Adv. with

Ms. Anisha Upadhyay & Mr. Pawan Upadhyay, Advs.

Versus

SIEMENS

.... Respondent

Through: Mr. C. Mukund with Mr. Avneesh Garg, Advs.

JUSTICE SHIV NARAYAN DHINGRA

1. Whether reporters of local papers may be allowed to see the

judgment?

2. To be referred to the reporter or not?

3. Whether judgment should be reported in Digest?

JUDGMENT

1.

By this petition under Section 34 of the Arbitration and

Conciliation Act, petitioner has assailed an award dated 15^th August,

2004 passed by the Arbitral Tribunal.

2.

Brief facts relevant for deciding this petition are that the

petitioner accepted tender/bid of the respondent for purpose of laying

down transmission lines. Three contracts were entered into between

the parties on 14^th March, 2000 for the purpose; one was called as off-

shore supply contract and two were called as on-shore supply and

service contracts. Under contract no.C51513-S656-2/672 dated 14^th

March, 2002, the claimant had supplied power equipments/goods as

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OMP No.429/2004 Page 2 of 6

per contract to the respondent and when the equipments and material

entered into State of Orissa where project was to materialize an entry

tax was imposed by State of Orissa under the Entry Tax Act, 1999.

This tax was paid by the petitioner and later on was deducted from the

bills of the respondent. The respondent raised a dispute with the

petitioner that the liability to pay the entry tax was not that of the

respondent and it was that of the petitioner. The deduction made of

an amount of Rs. 91,75,389/- was contrary to the contract and should

be refunded back to it. Since the petitioner took a stand that the

payment of entry tax was the liability of the respondent, it refused to

refund the amount. The Arbitration Clause was invoked by the

respondent and the claim of the respondent for refund of this amount

was referred to the Arbitral Tribunal consisting of three members.

Before the Arbitral Tribunal the only issue to be decided was as to who

was liable to bear the burden of entry tax under Orissa Entry Tax.

3.

The Arbitral Tribunal after considering the terms of the

contract and the rival contentions came to conclusion that the liability

to pay entry tax under Orissa Entry Tax was that of the petitioner and

not of the respondent and the petitioner could not have deducted the

amount of entry tax paid by it from the bills of the respondent. It

therefore directed the petitioner to refund the amount along with 11%

interest.

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OMP No.429/2004 Page 3 of 6

4.

The petitioner, aggrieved by the award, has assailed the

award on the ground that the Tribunal wrongly decided the contractual

liability of the parties and wrongly fixed the burden of the entry tax

upon the petitioner. The Tribunal did not appreciate that the bid price

was a lumpsum price inclusive of all Indian taxes, dues and levies on

the bought out materials, components, equipments, etc. and in view of

the lumpsum bid price the liability of payment of all the taxes including

Orissa Entry Tax was that of the respondent and the petitioner had

been wrongly burdened by the Tribunal with this amount and the

award was contrary to the terms of the contract. It is submitted that

the tribunal ignored that in the summary price proposal vide Clause 1,

Siemens as a foreign bidde