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February 04, 2019

Jindal ITF Ltd. wins INR 2015 Crores plus interest and applicable taxes in Arbitration against NTPC


Singh-&-Associates

The Final Award dated 27.01.2019 has now been pronounced by the Hon’ble Arbitral Tribunal, which was constituted of three Hon’ble Members [Justice Vikramajit Sen (Retd.), Justice B.P. Singh (Retd.) and Justice Anil Kumar (Retd.)]. The Arbitral Tribunal passed the Award in favour of M/s. Jindal ITF Ltd. (“JITF”) (a PR Jindal Group Company) against NTPC Ltd. (“NTPC”).

The S&A Team led by Mr. Manoj K Singh, Founding Partner, Ms. Gunita Pahwa, Joint Managing Partner, Mr. Nilava Bandyopadhyay, Sr Partner and Mr. Rajdutt Shekhar Singh, Partner advised and represented JITF in the arbitration.

The arbitration was relating to the dispute arising out of transhipment of coal in high-seas, deep draft locations (Sandheads and Kanika Sands) from Ocean Going Vessels to Transhipper/barges and transportation of such unloaded coal through barges via National Waterway No.1 to NTPC’s Farakka Power plant situated at Farakka, West Bengal. This project was an avant garde project and a unique project of its kind introduced for the first time in India.

The Hon’ble Arbitral Tribunal, after perusal of the pleadings, documents and evidence of the parties, hold that it is NTPC which has contributed majorly towards the delay in construction of Phase I and Phase II. Due to this delay of NTPC, JITF could not complete the Phase I and Phase II on time and therefore, NTPC is liable to compensate JITF accordingly. The Hon’ble Tribunal was also pleased to award minimum guaranteed amount for the entire period of Agreement including interest and cost to JITF. Further, the Hon’ble Tribunal was pleased to dismiss the counter claim of NTPC in its entirety. Accordingly, the Hon’ble Tribunal awarded an amount of Rs. 2015 Crores plus interest and applicable taxes to JITF.

Also, while arbitral proceedings were in place, Singh & Associates (on behalf of JITF) filed two interim applications under Section 17 of the Arbitration and Conciliation Act, 1996, praying that NTPC be directed to make payment of the MGQ Amount of Rs 158.5 Crore (for the first year of Operation Period) and Rs. 197.81 Crore (for the second year operation period) as NTPC failed to provide minimum guaranteed coal to JITF at transfer points (deep draft locations in mid-sea).

The Hon’ble Arbitral Tribunal was pleased to allow the interim applications filed by JITF and directed NTPC to pay MGQ Amount of Rs. 158.50 Crore and Rs. 197.81 Crore. The orders passed by Arbitral Tribunal were upheld by the Hon’ble High Court of Delhi and the Hon’ble Supreme Court of India.

This Award is a first of its kind. Award will boost the contractors working in infrastructure and shipping industry. Also, for matters relating to unlawful termination and adherence to the terms of the contract.

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