Gopal Jain, Karanjawala win for TATA Motors in 326 cr arbitration dispute with DTC

TATA Motors has successfully contested an arbitration against Delhi Transport Corporation (DTC) in a dispute relating to supply of CNG-propelled buses used during the 2010 Commonwealth Games held in the capital..An Arbitral Tribunal comprising Justices AP Shah, RC Chopra and Rekha Sharma allowed the claim of TATA Motors by a majority of 2:1. The Tribunal awarded approximately Rs. 326 crores under various reliefs claimed by TATA..Senior Advocate Gopal Jain, along with advocates Meera Mathur and Vidur Bhatia and a team from Karanjawala & Co. comprising Partner Nandini Gore, Principal Associates Abhishek Roy and Kartik Bhatnagar, Senior Associates Tahira Karanjawala and Natasha Sehrawat, and Associates Khushboo Bari, Neha Khandelwal and and ex-associates Aditi Bhatt and Ashlesha Shrivastava represented TATA..DTC was represented by advocates Avnish Ahlawat, Nitesh Kumar Singh, Uday Singh Ahlawat, Latika Choudhary and Mansi Pathak..In the year 2008, DTC had invited bids from manufacturers for supply of CNG-propelled AC and Non-AC buses to be used during the Commonwealth Games. The scope of work under the contract was Design, Manufacture, Supply, Testing and Commissioning of the buses. TATA Motors was a successful bidder and it entered into contract with the DTC for supply of 650 AC and 975 Non-AC buses..Subsequently, in the year 2011, disputes arose between the parties as DTC allegedly overlooked the suggestions and proposals made by TATA for appropriate standards required to be applied, which affected the overall implementation of the contract..DTC modified and deviated from the prescribed specifications, approvals and testing methodology at various stages and also asked for compliance with new standards. Thereafter, DTC levied liquidated damages upon TATA for alleged delay in supply of buses..TATA, therefore, initiated arbitration proceedings against DTC on account of breach of contract, delays and wrongful imposition of liquidated damages by DTC. It sought compensation for loss and damage caused to it due to constant changing the conditions and increase in the scope of the work..It was TATA’s contention that the same had resulted in escalation in prices of buses due to hike in excise and Value Added Tax (“VAT”) component, increased cost of maintaining the inventory of sealed and non-sealed component and the cost of idle manpower etc..The majority award was given by Justices AP Shah and RC Chopra, who allowed the claim of TATA Motors and awarded approximately Rs. 326 crores under various reliefs claimed by TML. The counter claim of DTC has been rejected..Image taken from here.