Rashtriya Chemicals and Fertilizer’s Contractor to Pay Rs. 173.72 Crore for Breakdown of Two GTGs

Rashtriya Chemicals and Fertilizer’s Contractor to Pay Rs. 173.72 Crore for Breakdown of Two GTGs

The Arbitral Tribunal has ruled in favor of Rashtriya Chemicals and Fertilizer (RCF) a Government of India Undertaking and has further awarded Rs. 173.72 crores from one of its contractors for the breakdown of two Gas Turbo Generators (GTGs).

The award was passed by a single-member Arbitral Tribunal.

Furthermore, the Arbitral Tribunal has directed Thermax (contractor) to repair and reinstate both the GTGs at the company's plant at their own cost under the defect liability clause.

The Arbitrator has also allowed the company’s claim on additional expenditure incurred on power and directed the contractor to pay Rs. 173.72 crores with interest at the rate of 10% from the date of claim and a sum of Rs. 95 lakhs as arbitration cost to the company.

The Arbitrator dismissed other claims and counter claims made in the matter. Thus, the award would have an estimated total financial impact of approximately Rs. 250 crores on Thermax.

Thermax has been advised that the order is not based on proper appreciation of facts and is currently in the process of challenging the award before the appropriate Appellate Authority.