Delhi High Court Delivers Split Verdict in Jindal-NTPC Arbitration Case
The Delhi High Court’s division bench has issued a split decision regarding the enforcement of an arbitral award requiring NTPC Limited to pay Jindal ITF Limited (JITF) over ₹1,889 crore. The bench, comprising Justice C Hari Shankar and Justice Om Prakash Shukla, delivered differing opinions on the validity of the award.
Justice C Hari Shankar supported the arbitral tribunal’s conclusions on several claims, whereas Justice Om Prakash Shukla disagreed, stating that the award on these claims could not be upheld. Consequently, the matter has been forwarded to the Chief Justice to assign it to a third judge or a larger bench for further consideration.
The court directed, “Accordingly, the point of difference is thus framed, for being placed before Hon’ble the Chief Justice for being placed before a learned Third Judge or a Larger Bench, as he would deem appropriate: ‘Whether the decision of the learned Single Judge, with respect to Claims 1, 3 and 3A, and 5A is sustainable in law?'”
Background of the Dispute
The dispute traces back to a 2011 tripartite agreement involving NTPC, the Inland Waterways Authority of India (IWAI), and JITF. The agreement focused on transporting imported coal via inland waterways to NTPC’s Farakka Thermal Power Plant. In January 2019, the arbitral tribunal ruled in favor of JITF, awarding them nearly ₹1,889.32 crore due to alleged delays and deviations, as well as shortfalls in NTPC’s minimum guaranteed quantity (MGQ) of coal.
Under claim 1, JITF was awarded ₹424.08 crore for delays and deviations attributed to NTPC. Claims 3 and 3A saw the tribunal awarding ₹158.50 crore and ₹197.81 crore, respectively, for shortfalls in the MGQ of coal. Additionally, the tribunal declared NTPC’s contract termination as illegal and considered future MGQ payments under the contract as compensation.
A single-judge of the High Court initially set aside the tribunal’s findings on these claims. Following the single-judge’s decision, the matter was brought before the division bench, leading to the current split verdict issued on September 2.
Legal Representation
Representing Jindal ITF Limited were Senior Advocates Dr. Abhishek Manu Singhvi and Jayant Mehta, accompanied by advocates Nilava Bandyopadhyay, Kumar Shashwat Singh Sawno, Yash Mittal, Surabhi Rana, and Om Shelat. NTPC was represented by Solicitor General Tushar Mehta and advocates Bani Dixit, Adarsh Tripathi, Vikram Singh Baid, and Ajitesh Garg.
Judicial Opinions
Justice Hari Shankar argued that the single-judge exceeded the limited scope of interference allowed under Sections 34 and 37 of the Arbitration and Conciliation Act, thus reinstating the arbitral award in its entirety. On the other hand, Justice Shukla concurred with the single judge’s view, citing a patent illegality by the tribunal on four claims.
As this significant arbitration case continues, it is now up to the Chief Justice to determine the next steps, potentially involving a third judge or a larger bench to resolve the dispute conclusively.
