THE HIGH COURT OF DELHI AT NEW DELHI

%

Judgment delivered on: 16.09.2016

+

EX.P. 443/2014

GEA EGI CONTRACTING / ENGINEERING

CO LTD

..... Decree Holder

versus

BHARAT HEAVY ELECTRICALS LIMITED ..... Judgment Debtor

Advocates who appeared in this case:

For the Decree Holder

: Mr Sandeep Sethi, Senior Advocate with

Mr Puneet Singh Bindra, Mr Aslam

Ahmed, Mr Babit Singh Jamwal, Mr

Rohan Kaushal, & Mr Sharad Kharra.

For the Judgment Debtor

: Mr Neeraj Kishan Kaul, Additional

Solicitor General with Mr Samar

Kachwaha, Ms Manvi Adlakha and

Mr Basudeb Biswas.

CORAM:-

HON’BLE MR JUSTICE VIBHU BAKHRU

JUDGMENT

VIBHU BAKHRU, J

EA(OS) 713/2015

1.

GEA EGI Contracting Engineering Co. Ltd. (hereafter 'GEA'), a

company incorporated under the laws of Hungary and having its principal

office at Hungary, has filed the present petition to enforce an arbitration

award dated 21.08.2014 (hereafter 'the impugned award') rendered by an

Arbitral Tribunal in respect of the disputes between GEA and Bharat Heavy

Electricals Limited (BHEL), a Government company incorporated under the

laws of India. The seat of arbitration was in Zurich, Switzerland and the

arbitration was conducted in accordance with the UNCITRAL Rules.

2.

BHEL has filed the aforementioned application (being EA (OS)

713/2015) under Section 48 of the Arbitration and Conciliation Act, 1996

(hereafter 'the Act'), inter alia, objecting to the enforcement of the

impugned award principally for two reasons. First, that BHEL has instituted

a suit - Suit No. 878/2014 (hereafter 'Noida Suit') - before the Civil Judge,

Senior Division, Gautam Budh Nagar, inter alia, praying for a mandatory

injunction restraining GEA to enforce the compliance of the impugned

award; and second, that the impugned award is contrary to the public policy

of India as, according to BHEL, the performance of the contract between the

parties was rendered impossible because of civil war like situation in the

Syrian Arab Republic (Syria).

3.

Thus, the only controversy to be addressed is whether the impugned

award is enforceable under Part II of the Act as a decree of this Court?

4.

Briefly stated, the necessary facts relevant to address the aforesaid

controversy are as under:-

4.1

Public Establishment of Electricity for Generation and Transmission

(PEEGT) is the main shareholder of Tishreen Power Public Corporation

which in turn operates the Tishreen Power Plant. PEEGT and BHEL

entered into a contract on 29.10.2009 (hereafter 'the PEEGT Contract')

whereby BHEL undertook to design, manufacture, transport, erect and

commission necessary equipment for extension of the Tishreen Power Plant

by addition of two units of 200 MW each to the existing capacity of the

Tishreen Power Plant (hereafter ‘theTishreen Project’).

4.2

On 01.12.2010, BHEL entered into an agreement (hereafter 'the

Agreement') with GEA for supply and erection of Dry Cooling Heller

System (hereafter 'the Equipment') for the Tishreen Project. In terms of the

Agreement, GEA was to supply equipment, materials and spare parts, CIF

Syrian Port of entry/CIP other modes of transportation. GEA also agreed to

provide design/ data for erection and commissioning procedures; supervise

the erection and commissioning of the equipment as well as the performance

test procedures; completion of performance test; and training of operating

and maintenance personnel. BHEL was obliged to pay for the Equipment in

the manner as provided under the Agreement.

4.3

On 21.05.2012, BHEL requested GEA to defer dispatches of certain

material, which were required at the later stage of the Tishreen Project.

During the period, 23.05.2012 to 06.06.2012, GEA issued pre-shipment

notices indicating their readiness to dispatch certain equipment as

contracted.

4.4

Thereafter, on 13.06.2012, BHEL sent a letter requesting GEA to

“stop dispatches against the subject contract with immediate effect