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Informist, Friday, Mar. 7, 2025

 

--HC upholds interim arbitral award to BHEL, junks RattanIndia Power's plea 

--CONTEXT: In 2017, arbitral tribunal awarded INR 1.15 bln to BHEL 

 

NEW DELHI – The Delhi High Court has upheld a 2017 interim arbitral award directing RattanIndia Power Ltd. to pay INR 1.15 billion to Bharat Heavy Electricals Ltd. The high court said that RattanIndia Power had failed to make out a case for interference, as provided under Section 34 of the Arbitration and Conciliation Act, 1996. The high court said that the proceedings for enforcement of the interim arbitral award should be listed before the roster bench on Mar. 25, subject to orders of the judge in charge.

 

In 2010, through a letter of award, Bharat Heavy Electricals was entrusted with designing, engineering, manufacturing, inspection, and testing of a boiler turbine generator for RattanIndia Power's 5x270 MW thermal power plant in Amravati, Maharashtra. Pursuant to the letter, a supply contract and a services contract were signed by the parties in 2011, which provided for the supply of material and scope of services, respectively. 

 

In terms of the two contracts, RattanIndia Power paid an advance amount of INR 1.43 billion to Bharat Heavy Electricals, secured by an advance bank guarantee of the latter. The amount paid by way of advance was to be adjusted against supplies. Thereafter, disputes arose between the parties because Bharat Heavy Electricals claimed that RattanIndia Power had failed to discharge its payment obligations for plant, machinery, equipment and services supplied by the former, and became apprehensive of the petitioner's financial position.

 

In 2013, RattanIndia Power unilaterally suspended supplies, which was not accepted by Bharat Heavy Electricals. Ultimately, the contract was terminated by a communication of Bharat Heavy Electricals in 2015. RattanIndia Power said Bharat Heavy Electricals had breached the terms of the contract by failing to supply plant and equipment sequentially. RattanIndia Power characterised such non-sequential supply as "dumping" and, therefore, contended that Bharat Heavy Electricals was not entitled to payment. 

 

Consequently, the matter went to arbitration, and both the parties made claims and counterclaims. The current interim award arises out of applications filed by both parties for interim awards. Bharat Heavy Electricals relied on minutes of meetings between the parties and said its dues of INR 1.15 billion pertaining to the Amravati project, and INR 630 million in respect of another project at Nashik, were admitted by RattanIndia Power. 

 

At 1108 IST, shares of Bharat Heavy Electricals were up 0.7% at INR 199.85 on the National Stock Exchange, while those of RattanIndia Power were up 7.3% at INR 10.13.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Surya Tripathi

Edited by Avishek Dutta

 

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