Jindal - NTPC dispute: Delhi High Court delivers split verdict on validity of ₹1,889 crore arbitral award

A division bench of the Delhi High Court on Wednesday delivered a split verdict on whether an arbitral award directing NTPC Limited to pay over ₹1800 crore to Jindal ITF Limited (JITF) should be sustained [M/s Jindal ITF Limited v NTPC Limited & Anr]. .Justice C Hari Shankar upheld the arbitral tribunal’s findings on certain claims while Justice Om Prakash Shukla disagreed and held that the award on these claims could not be sustained.The case has now been referred to the Chief Justice to be placed before a third judge or a larger bench. “Accordingly, the point of difference is thus framed, for being placed before Hon’ble the Chief Justice for being placed before a learned Third Judge or a Larger Bench, as he would deem appropriate: 'Whether the decision of the learned Single Judge, with respect to Claims 1, 3 and 3A and 5A is sustainable in law?',” the Court ordered. .The dispute arose from a 2011 tripartite agreement between NTPC, the Inland Waterways Authority of India (IWAI) and JITF for transportation of imported coal through inland waterways to NTPC’s Farakka Thermal Power Plant.In an order passed in January 2019, the arbitral tribunal awarded a total of nearly ₹1,889.32 to JITF for alleged delays and deviations and shortfalls in NTPC’s minimum guaranteed quantity (MGQ) of coal.JITF was awarded ₹424.08 crore under claim 1 towards delays and deviations attributable to NTPC. The tribunal further awarded ₹158.50 crore and ₹197.81 crore under claims 3 and 3A towards shortfalls in NTPC’s minimum guaranteed quantity (MGQ) of coal. The tribunal also said that NTPC’s termination of the agreement was illegal. It treated the future MGQ payable under the contract as compensation.The single-judge of the High Court set aside the tribunal’s findings on these claims.The matter then came before the division bench..The division bench delivered a split verdict on September 2 (Wednesday). Justice Hari Shankar held that the single-judge had exceeded the limited scope of interference permissible under Sections 34 and 37 of the Arbitration and Conciliation Act, and restored the arbitral award in its entirety. However, Justice Shukla dissented on four of the claims. He agreed with the single judge that the tribunal had committed patent illegality. .Senior Advocates Dr Abhishek Manu Singhvi and Jayant Mehta along with advocates Nilava Bandyopadhyay, Kumar Shashwat Singh Sawno, Yash Mittal, Surabhi Rana and Om Shelat appeared for Jindal ITF Limited. .Solicitor General Tushar Mehta along with advocates Bani Dixit, Adarsh Tripathi, Vikram Singh Baid and Ajitesh Garg represented NTPC. .[Read Judgment]