ARKAY ENERGY (RAMESWARM) LIMITED Vs. TIDEL PARK LIMITED

JUDGEMENT

(1.) The petitioner, Arkay Energy (Rameswarm) Limited (Arkay), was the respondent before the Arbitral Tribunal. Arkay is a gas based electricity generation company. After obtaining permission from the Tamil Nadu Electricity Board (TNEB) for supply of electricity to third party consumers, Arkay entered into two separate agreements [a shareholders agreement (SHA) and a power supply agreement(PSA)] with the respondent, TIDEL Park Limited (TIDEL Park), on 10/11/2005. Pursuant thereto, disputes arose between Arkay and TIDEL Park with regard to alleged breach of the PSA. Eventually, the PSA was terminated by TIDEL Park on 19/1/2011.

(2.) After such termination, initially, TIDEL Park initiated civil proceedings before this Court (C.S.No.389 of 2011) in relation to disputes arising both under the SHA and PSA. Arkay filed an application under Sec. 8 of the Arbitration and Conciliation Act, 1996 (the Arbitration Act) for reference of disputes to arbitration in view of the arbitration clause in the PSA. The application under Sec. 8 was allowed. The order was carried in appeal by TIDEL Park before the Division Bench but the Division Bench dismissed the appeal. In these circumstances, after issuing a notice under Sec. 21 of the Arbitration Act, the Arbitral Tribunal was constituted.

(3.) Before the Arbitral Tribunal, TIDEL Park claimed a sum of Rs.4,85,32,773.00 towards short supply and non-supply of power by Arkay. The said claim was made by computing the difference between the TNEB tariff and the rate at which Arkay was required to supply power. Interest was claimed on the above amount at the rate of 13% per annum. Arkay made a counter claim for a sum of Rs.23,66,140.00 towards unpaid dues and interest thereon at the rate of 13% per annum from the date the amount became payable until realization. Upon examining the pleadings and material documents, the Arbitral Tribunal framed 11 issues. TIDEL Park adduced evidence by examining Mr.N.R.S.Ganesh Babu, General Manager (Finance) as CW-1 and by exhibiting 60 documents as Exs.C1-C60. Arkay examined Mr.T.S.Das, Vice-President (Commercial), as RW-1 and exhibited 57 documents as Exs.R1-R57. By a majority award dtd. 7/1/2021 and additional award dtd. 5/3/2021, the principal claim of Rs.4,85,32,773.00 was allowed with interest thereon at the rate of 13% per annum from 11/9/2017 until realization. In addition, the petitioner was directed to pay a sum of Rs.66,10,000.00 as costs. By the minority award, all the claims and counter claims were held to be barred by limitation. By this petition, Arkay challenges the above mentioned awards under Sec. 34 of the Arbitration Act. For ease of reference, the majority award, including the additional award, is referred to as the Award in this order.