NTPC LIMITED Vs. VOITH HYDRO JOINT VENTURE

JUDGEMENT

(1.) The petitioner (hereafter 'NTPC') has filed the present petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereafter 'the A&C Act') impugning the arbitral award dated 23.08.2016 (hereafter 'the impugned award') rendered by the Arbitral Tribunal (by majority) comprising of Professor Dr. Albert Jan Van Den Berg (Presiding Arbitrator), Mr Michael Black, QC (Co-Arbitrator) and Justice (Retd.) G. N. Ray (Co-Arbitrator). The arbitral award was rendered by Professor Dr. Albert Jan Van Den Berg and Mr Michael Black, QC with Justice G.N. Ray returning a contrary opinion. The Arbitral Tribunal partly allowed the claims made by the claimants and rejected the counter claim made by NTPC. Justice (Retd.) G. N. Ray rendered a contrary opinion accepting the NTPC's claim that the contract between the parties stood frustrated. He further concluded that the claim made by the claimants were barred by limitation. However, he concurred with the majority in holding that NTPC's counter claim was time barred and deserved to be rejected.

(2.) Ntpc assails the impugned award, essentially, on three fronts. First, it claims that the claims made by the claimant are barred by limitation. Second, it claims that performance of the contract between the parties was rendered impossible and, therefore, had become void by virtue of Section 56 of the Indian Contract Act, 1872 (hereafter 'the Contract Act'). It is contended that in the circumstances, NTPC was liable to restore the advantage under the Contract but was not liable to make any payment on account of damages. Third, it is contended that the impugned award is contrary to public policy inasmuch as the Arbitral Tribunal has awarded damages without the claimants establishing the cost and expenses incurred by it.

(3.) On 23.06.2004, NTPC and Government of Uttarakhand entered into an agreement for execution of a Hydro Electric Project to be constructed on the river Bhagirathi known as Loharinag Pala Hydro Electric Power Project (4x150MW) (hereafter referred to as 'the Project'). The Ministry of Environment and Forests accorded clearance for the project on 08.02.2005 and the infrastructure work commenced during the year 2005. On 30.06.2006, the Ministry of Power, Government of India conveyed its approval for granting the status of a 'Mega Power Project', to the Project.