Delhi HC seeks response from Reliance Infra, Shanghai Sinofinn New Energy Investment on Aravali Power's petition
Delhi High Court
on Tuesday sought a response from
Reliance Infrastructure
and Shanghai Sinofinn New Energy Investment on a petition by
Aravali Power Company
, seeking enforcement of the Rs 600-crore arbitral award that it had won against the
Anil Ambani
firm in December last year.
Aravali Power, a joint venture between
NTPC
, Haryana Power Generation Company Ltd and Indraprastha Power Generation Company, said that Rs 572.62 crore plus interest at the rate of 10% have fallen due as on May 26 and the same may be 'realized by the court' from RInfra and its Chinese associate and released to it.
Aravali Power, which operates the
Indira Gandhi Super Thermal Power Project
in Jhajjar district, Haryana, argued that since no interim stay was granted by the HC and the requisite period for RInfra to make an application to set aside the arbitral award under Section 34 of the Arbitration and Conciliation Act has also 'elapsed', there is no impediment in the enforcement now. 'In spite of this crystal-clear position, the judgment debtor (RInfra) has not honoured the said arbitral award,' the Aravali Power counsel Adarsh Tripathi and Vikram Singh Baid told the HC.
The HC posted Aravali Power's enforcement petition along with the RInfra and the Chinese firm's petition for further hearing on July 28.
In March, RInfra had also challenged the December 18 majority arbitral award and sought its quashing on multiple grounds, including denial of natural justice, violation of basic fundamental policy of Indian Law and fundamental principles of justice and denial of proper opportunity to present the case. It alleged that the tribunal had wrongly upheld the termination of the contracts as justified and lawful while awarding various claims in favour of Aravali Power. 'The arbitral tribunal infracted the most fundamental notions or principles of justice by unilaterally altering the contract granted in violation of the contract and without any evidence,' the joint petition by RInfra and its Chinese collaborator had stated.
The dispute arises due to the alleged damages suffered by Aravali Power as a direct result of RInfra's and Shanghai Sinofinn's breach of contract relating to the installation of a flue-gas desulfurization system package for the coal-based Jhajjar power plant having a capacity of 3X500 megawatt.
In 2016, a memorandum of understanding was entered into between RInfra and Shanghai Sinofinn to provide a framework to develop, undertake and deliver world class environmental protection retrofit projects for control of environmental pollution. Thereafter, licences were granted by Shanghai Sinofinn to RInfra for the non-exclusive right to design, construct, manufacture, use and sell the process and plant for limestone-based flue gas desulfurization systems in India.
Aravali Power had issued notification of awards to the Ambani firm and its associate for supply of limestone-based flue gas desulfurization systems package for the Jhajjar project and inland transportation, insurance, installation, testing and commissioning, and conducting guarantee tests for the limestone-based flue gas desulfurization systems package. However, Aravali Power in 2018 served a show cause Notice to RInfra and the Chinese company for alleged incomplete drawings, incomplete bought-out-items ordering, and non-submission of bank guarantee.
Alleging breach of contract against RInfra and Chinese company, Aravali Power then issued notice of termination and invoked arbitration in 2018.
The Supreme Court appointed three-member arbitral tribunal in a majority award granted a principal amount of Rs 419 crore with Rs 5 crore cost and an interest of Rs 149 crore on the principal amount and future interest on the principal amount till actual date of payment.
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