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Informist, Tuesday, Jun. 9, 2026

MUMBAI – The Bombay High Court has rejected Paharpur Cooling Towers Ltd.'s petition seeking an additional entitlement of INR 664.90 from Siemens Ltd., thereby upholding an arbitral award delivered in 2019. The judgment does not result in any additional financial liability on the company as it has already paid the amount payable pursuant to the arbitral award, said Siemens Energy India Ltd., to which the litigation had been transferred pursuant to the demerger of Siemens Ltd.'s energy business.

The arbitral award pertained to a dispute about the invocation by Siemens of bank guarantees furnished by Paharpur Cooling Towers for a construction project at Torrent Energy Ltd.'s plant at Dahej in Gujarat. The dispute arose from contracts executed in December 2010 for construction of three natural draft cooling towers at Torrent Energy's Dahej power project. Siemens, which had secured the project on a turnkey basis, had subcontracted works to Paharpur Cooling Towers. The arbitration centred on delays in execution, liquidated damages, risk-purchase costs incurred by Siemens in engaging third-party contractors, and the invocation of bank guarantees worth INR 347.30 billion furnished by Paharpur Cooling Towers.

In February 2019, a three-member arbitral tribunal had partly allowed Siemens's claim and Paharpur Cooling's counterclaim. The tribunal had awarded Siemens's claim of about INR 535.30 billion while allowing Paharpur Cooling's counterclaim to the extent of INR 225 million. After adjustments, Siemens was directed to pay the subcontractor a net amount of INR 208.4 million along with interest at 6% annually. Siemens subsequently paid the awarded amount, which Paharpur Cooling accepted while continuing its legal challenge. 

Before the court, Paharpur Cooling challenged three key findings of the tribunal. It argued that Siemens had failed to prove risk-purchase expenses for engaging substitute contractors and said the tribunal had arbitrarily awarded about INR 82 million by allowing 50% of disputed claims. It also challenged findings attributing at least 100 days of delay to Paharpur Cooling and the consequent levy of liquidated damages of INR 236 million. Further, it questioned Siemens's invocation of bank guarantees aggregating to INR 347 million and sought a refund of those amounts with interest. Justice Somasekhar Sundaresan rejected all three arguments.

 

Tuesday, shares of Siemens Energy India closed at INR 3,547.50 on the National Stock Exchange, down 1.3% from Monday. For the March quarter, the company reported a net profit of INR 3.75 billion on revenues of INR 23.94 billion.  End

 

Reported by Prateem Rohanekar

Edited by Rajeev Pai

 

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