SC to hear cross-appeals by Reliance Infra, Damodar Valley Corp next week

Challenging the HC’s order, RInfra said that the HC had illegally, and wrongfully entertained the DVC’s appeal and granted a stay when the statute does not provide it for an order passed under Section 36(2) of the Arbitration Act.

The apex court in the meantime directed the Calcutta High Court to decide the maintainability of DVC’s appeal pending before it.
The apex court in the meantime directed the Calcutta High Court to decide the maintainability of DVC’s appeal pending before it.

The Supreme Court on Friday said that it will hear next week cross-appeals by Reliance Infrastructure and Damodar Valley Corporation (DVC) in a case related to the Rs 1500-crore arbitration award (including interest) that the Anil Ambani firm won against the government undertaking.

A bench led by Justice LN Rao posted the case for hearing on Friday after Solicitor General Tushar Mehta submitted that DVC has also filed an appeal. On Friday, only RInfra’s appeal was listed.

The apex court in the meantime directed the Calcutta High Court to decide the maintainability of DVC’s appeal pending before it.

The case pertains to DVC’s 2 x 600 MW Raghunathpur thermal power project in West Bengal which was commissioned in 2012, for which Reliance Infrastructure was an engineering and construction contractor. The contract value of the project was Rs 3,750 crore and the two units of 600 MW each were to be commissioned in a period of 35 and 38 months. Dispute arose over levy of liquidated damages for delay in completion of one of the units and Reliance had invoked arbitration.

A three-member arbitration tribunal on December 21, 2019, had unanimously directed DVC to pay Rs 896 crore and return the bank guarantees of Rs 354 crore within four weeks or pay additional interest, at the rate of 15% per annum, for any delay in payment beyond four weeks.

Challenging the HC’s order, RInfra said that the HC had illegally, and wrongfully entertained the DVC’s appeal and granted a stay when the statute does not provide it for an order passed under Section 36(2) of the Arbitration Act.

While ruling in favour of Reliance, the tribunal had rejected the counter claim for damages by DVC and asked the government company to release all the bank guarantees within a month from the date of the award, senior counsel Harish Salve, appearing for RInfra argued.

“The impugned order clearly ignores that even if the award of December 21, 2019, was to be set aside, the same could never have resulted in grant of the counter claim of the DVC and hence the question of securing the latter did not arise. The HC order is therefore, patently, illegal and untenable in law,” the appeal stated.

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