Ntpc Limited v. Thiess Minecs India Pvt. Ltd. & Anr

NAVIN CHAWLA, J NOVEMBER 28, 2018/rv

Page 1 * IN THE HIGH COURT OF DELHI AT NEW DELHI + Reserved on: 06.08.2018 Date of decision : 28.11.2018 NTPC LIMITED ..... Petitioner Through: Mr.Vikas Singh, Sr. Adv. with Ms.Bani Dixit, Ms.Deepika, Mr.Kapish Seth, Ms.Srishti Bannerjee, Advs. versus THIESS MINECS INDIA PVT. LTD. & ANR. ..... Respondents Through: Mr.P.Chidambaram, Sr. Adv. with Mr.Dhruv Dewan, Mr.Rohan Batra, Ms.Harshita Choubey, Advs. CORAM: HON'BLE MR. JUSTICE NAVIN CHAWLA 1. This petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the "Act") has been filed by the petitioner challenging the Arbitral Award dated 24.07.2017 passed by the Arbitral Tribunal consisting of three Arbitrators. The Arbitral Tribunal has culled out the majority Award in the following words:- ―1) The Claim Petition filed by the Claimants is partly allowed. 2) The Counter Claim lodged by the Respondent is also partly allowed. 3) The Claimant No.1 is held entitled to a declaration as prayed for that Respondent NTPC has unlawfully and illegally terminated the Project Agreement on 7th May 2014. Page 2 4) The prayer made by Claimant No. 1 for specific performance of Project Agreement against Respondent is rejected. 5) The Claimant No.1 is held entitled to recover from Respondent an amount of Rs. 123.66 crores towards damages for illegally and unlawfully terminating the Project Agreement. 6) The Respondent is held entitled to set off an amount of Rs. 56 crores paid by it to the Claimant No. 1 towards Development Stage Expenditure. 7) The Claimant No. 1 is thus held entitled to recover and the Respondent is held liable to pay to the Claimant No. 1, an amount of Rs. 67.66 crores (Rs. 123.66 crores minus Rs. 56 crores) towards damages for illegally terminating the Project Agreement. 8) The Respondent - NTPC is directed to pay the aforesaid amount of Rs. 67.66 crores to Claimant no. 1 within 30 days from the date of the Award; 9) If the aforesaid payment is not made by the Respondent to Claimant No. 1 as directed, the Respondent shall pay interest on the said amount of Rs. 67.66 crores at the rate of 10 per cent per annum with effect from the date of award, till the date of payment. 10) The Respondent - NTPC shall refund the amounts of three Bank Guarantees amounting to Rs. 91 crores (Rs. 21 crore + Rs. 35 crore + Rs. 35 crore) along with interest accrued thereon in favour of Claimant No. 1 – Thiess Minecs Pvt. Ltd. 11) The Respondent – NTPC shall refund the amount of one Bank guarantee amounting to Rs. 7 crore along with interest accrued thereon in favour of Claimant No. 2 - Thiess Pty. Ltd. 12) The Respondent – NTPC shall also pay interest on the aforesaid four Bank Guarantees at the rate of 10 per cent annum to the Claimants with effect from 08 May 2014 till the date of payment. 13) Rest of the reliefs claimed by the Claimants in the Statement of Claims as also the reliefs sought by the Respondent in the Counter- claim are refused/rejected. 14) The prayer of the parties for payment of costs incurred in various legal proceedings in different courts is rejected. 15) The Parties are directed to bear their own costs in the present arbitral proceedings.‖ Page 3 2. A reading of the Award would show that the Arbitrators were unanimous in their finding that the petitioner had unlawfully and illegally terminated the Project Agreement on 07.05.2014 and that though the respondent no. 1 was not entitled to seek Specific Performance of the Project Agreement, it was entitled to recover damages for such illegal and unlawful termination of the Project Agreement. The difference of opinion was on the quantum of such damages. The Arbitral Tribunal was also unanimous in its opinion that the petitioner was liable to refund the amounts of the three bank guarantees wrongfully encashed by it. 3. The disputes between the parties arose in relation to the Project Agreement for development and operation of Pakri Barwadih Coal Block (hereinafter referred to as the PB coal