LANCO INFRATECH LTD. Vs. HINDUSTAN CONSTRUCTION COMPANY LTD.

JUDGEMENT

(1.) This appeal under Sec. 37(2)(b) of the Arbitration and Conciliation Act, 1996 filed by Lanco Infratech Ltd. ( Lanco ) is directed against an order dated 4th June, 2016 passed by the Arbitral Tribunal ( AT ) allowing the application filed by the Respondent Hindustan Construction Company Ltd. ( HCCL ) under Sec. 17 of the Act and directing Lanco to furnish a bank guarantee to the extent of 50% of the amount claimed by HCCL within 30 days in an approved RBI format for an initial period of 12 months and to be kept renewed from time to time upto 30 days from the date of pronouncing of the Arbitral Award.

(2.) The background to the present appeal is that Lanco is part of the Lanco conglomerate group known as the 'Lanco Group' which has various subsidiaries dealing with power infrastructure, construction, real estate etc. Lanco entered into two contracts for civil works of Power House, transformers and Butterfly Valve Caverns and switch yard of Teesta VI Hydroelectric Project, Sikkim and Contract No. LITC/Contract/Teesta-VI/4B i.e., LOT IV B and for civil works for various tunnels from RD 10370 upto junction with the bottom of Surge Tunnels including Adit Tunnels-IVA and IV near Subin Khore of Teesta-VI, Hydroelectric Project, LOT IV B on 25th June, 2008. Disputes that arose between the parties were unable to be resolved through mutual discussions. HCCL then invoked the arbitration clause and nominated its Arbitrator. The Institution of Engineers (India) appointed an Arbitrator on behalf of Lanco and in turn both the Arbitrators appointed the presiding Arbitrator and completed the AT.

(3.) The challenge to the constitution of the AT was disposed of by this Court by order dated 19th Jan., 2015 leaving it open to the Lanco to raise this challenge before the AT itself. Thereafter, a challenge was raised by Lanco in an application under Sec. 16 of the Act which was negatived by the AT by an order dated 4th April, 2015.