The Supreme Court of India has appointed Justice Sanjay Kishan Kaul as the new arbitrator in the legal dispute between Parsa Kente Collieries Limited (PKCL), associated with Adani, and the Rajasthan Rajya Vidyut Utpadan Nigam Limited (RRVUNL). This decision was made following the replacement of former Justice Arun Mishra, who was initially appointed by the Rajasthan High Court.
Background of the Case
The case involves a joint venture between Adani Enterprises Limited and RRVUNL, where Adani holds a 74% stake and RRVUNL holds 26%. The dispute concerns issues related to development, mining, and coal transportation. The Rajasthan High Court had appointed Justice Mishra as the arbitrator; however, RRVUNL challenged this appointment due to Justice Mishra’s previous involvement in a related case.
In the previous dispute, which revolved around price escalation, fixed costs, and an escrow account, the Supreme Court, in 2019, partially upheld an arbitral award while dismissing PKCL’s claims for ₹78 crore in fixed costs. This judgment, authored by Justice MR Shah, involved both Justice Mishra and Justice Shah, leading to concerns of bias if Justice Mishra were to serve as arbitrator again.
Supreme Court’s Decision
Chief Justice of India Surya Kant, along with Justices Joymalya Bagchi and V Mohana, presided over the matter. During the hearing, the Bench expressed its intent to avoid any potential embarrassment to Justice Mishra due to objections that might arise during arbitration proceedings under Section 34 of the Arbitration and Conciliation Act.
“Our problem is that we don’t want any embarrassment to a former judge. Unnecessarily, they will raise an objection time and again in Section 34,” the Bench remarked. Despite not finding RRVUNL’s objection to be legally sustainable, the parties mutually agreed to appoint Justice Kaul as the arbitrator.
More Read
Advocates’ Arguments
Senior Advocate Shyam Divan, representing RRVUNL, highlighted the significance of the previous proceedings involving the same contract and parties. On the other hand, Senior Advocate Gourab Banerjee, representing PKCL, initially opposed the change, arguing that replacing Justice Mishra based on the objection would be unfair as he was not present to defend himself.
However, the Supreme Court urged both parties to agree on a new arbitrator to prevent future controversies. Following discussions, they proposed two names, leaving the final decision to the Court. Consequently, Justice Kaul was appointed to arbitrate the dispute.
Conclusion
The Supreme Court’s formal order dated August 3 clarified that it did not consider RRVUNL’s grounds for changing the arbitrator legally sustainable, yet it modified the Rajasthan High Court’s order to appoint Justice Kaul. Senior Advocate Shyam Divan led the representation for RRVUNL, while Senior Advocate Gourab Banerjee represented PKCL.
