Marine Electricals India Ltd vs Ge Power Conversion India Pvt Ltd
2025 Latest Caselaw 6527 Bom

Bombay High Court

Marine Electricals India Ltd vs Ge Power Conversion India Pvt Ltd on 7 October, 2025

2025:BHC-OS:17923

                                                                              CARBPL-33283-2024-J - FINAL.doc


                                            IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                               ORDINARY ORIGINAL CIVIL JURISDICTION
                                                  IN ITS COMMERCIAL DIVISION
                                  COMMERCIAL ARBITRATION PETITION (L) NO. 33283 OF 2024
                                                       WITH
                                       INTERIM APPLICATION (L) NO. 33491 OF 2024

                          Marine Electricals (India) Ltd.                       ...Petitioner
                          Versus

          Digitally
          signed by
                          GE Power Conversion (India) Pvt. Ltd.                 ...Respondent
          SHRADDHA
 SHRADDHA KAMLESH
 KAMLESH TALEKAR
 TALEKAR  Date:
                          Mr. Darius Khambata, Senior Advocate a/w. Ms. Arti Raghavan,
          2025.10.07
          14:49:32
          +0530
                          Counsel, Mr. Pratik Pawar, Mr. Siddhesh S. Pradhan and Ms.
                          Meher Mistri i/b J. Sagar Associates, for Petitioner.

                          Mr. Shiraz Rustomjee, Senior Advocate a/w. Ms. Sita Kapadia, Mr.
                          Sulabh Rewari, Ms. Smriti Singh, Ms. Mansi Binjrajka, Ms.
                          Arunima Athavale i/b Keystone Partners, Advocates and Solicitors,
                          for Respondent.


                                              CORAM           : SOMASEKHAR SUNDARESAN, J.

RESERVED ON: FEBRUARY 4, 2025 PRONOUNCED ON: OCTOBER 7, 2025

Judgement:

Context and Factual Background:

1. This Petition is filed under Section 34 of the Arbitration and

Conciliation Act, 1996 ("the Act") challenging an award dated August 1,

2024 ("Impugned Award") passed by a Learned Arbitral Tribunal

allowing claims made by the Respondent, GE Power Conversion (India)

Pvt. Ltd. ("GE Power") against the Petitioner, Marine Electricals (India)

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Ltd. ("Marine") and correspondingly, rejecting the counter-claims by

Marine.

2. At the heart of the controversy between the parties lies the

question of whether the agreement between the parties was meant to be

an agreement for supply of equipment as contracted, or if it was an

agreement that involved supply of goods as well as provision of

services, with a discernible break-up of the consideration between the

goods and the services. The essence of the challenge in this Petition is

that the Impugned Award is contrary to the contract between the

parties, contrary to the evidence on the record, and contrary to the

provisions of the Sale of Goods Act, 1930 ("Sale of Goods Act").

3. A brief overview of the factual matrix would be appropriate and

the same is set out below:

a) Neyveli Lignite Corporation or NLC India Ltd. (" Neyveli")

commissioned Marine to set up a 50 MW (AC) Grid-

Interactive Solar PV Project at Ettankulam, Tirunelveli,

Tamil Nadu ("Project");

b) Marine sought supply of PV Modules and Inverters from

GE Power. Towards this end, Marine and GE Power

executed a Letter of Commitment dated September 14,

2017 for a full supply of all equipment necessary, which

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was modified and substituted by another Letter of

Commitment dated September 21, 2017 ("LOC") for a

reduced quantum of supply;

c) In furtherance of the LOC, the parties executed a sub-

contract dated December 22, 2017 (" Sub-Contract"). The

LOC and Sub-Contract are collectively termed as "the

Agreement";

d) GE Power had to provide, install and commission a set of

48 Inverters. GE Power also had to supply 29.796 MW of

PV Modules which were compliant with Neyveli's project.

An affiliate of GE Power, namely GE Transmission and

Distribution ("GE T&D") was involved, and GE Power and

GE T&D were to coordinate their activity. One of the claims

made by Marine in the proceedings was that GE Power

would be responsible for the obligations of GE T&D as

well;

e) The PV Modules were to be affixed with RFID tags to help

trace their location. The PV Modules were delivered by

March 2018, the RFID tags were to be affixed while

commissioning on site, and payment was to be made;

f) The PV Modules were installed only by June 2019 and

according to GE Power, the delay was not attributable to

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GE Power since the supply had been made and it was the

local installation issues that led to the delay; and that the

RFID tagging would be effected after installation;

g) By July 2018, disputes over payment broke out - GE

Power would contend that it had given an undertaking to

Neyveli that the RFID tags would indeed be affixed on the

PV Modules at the site, and installation would be

completed by August 2018. Neyveli is said to have agreed

to release payments but Marine did not pay GE Power for

the supply. Additionally GE Power suspended work on

installing the Inverters, which had also been supplied by

March 2018;

h) Disputes between the parties in the arbitration

proceedings, covered the scope of work to be performed

and the allegedly defective Inverters that had been

supplied by GE Power. Pursuant to discussions, work

resumed and payments were released but disputes had

persisted and GE Power stopped providing its services

purporting default by Marine in paying the consideration

due;

i) Marine claimed that the equipment supplied by GE Power

was defective and that Neyveli had complaints about their

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performance. Between November 2020 and December

2020, Marine is said to have replaced all of GE Power's

Inverters with those acquired from another Chinese

manufacturer. Neyveli is said to have given permission for

the replacement so long as Marine complied with the

obligations owed to Neyveli;

j) Marine is said to have completed the work on its own,

accused GE Power of breach, and encashed a Contract

Performance Bank Guarantee ("Bank Guarantee") supplied

by GE Power;

k) The disputes referred to arbitration relate to the claim for

payment of the balance of the contract price by Marine to

GE Power, and for refund of the amounts encashed by

invoking the Bank Guarantee;

l) The Learned Arbitral Tribunal held in favour of GE Power.

It was held that GE Power was entitled to receipt of the

balance consideration under the Agreement. Marine was

directed to pay a sum of Rs. 12.60 crores towards this end.

The invocation of the Bank Guarantee by Marine has been

held to be illegal. Payment of Rs. 7.87 crores towards

interest on the amount for which the Bank Guarantee was

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invoked has been directed. Costs in the sum of Rs. 1.37

crores were also awarded; and

m) The Impugned Award also allowed claims towards

variation in foreign exchange rates (Claim 2); return of

liquidated damages retained (Claim 5); and another claim

towards stamp duty, all payable with interest ( Claim 7).

Marine has accepted the rulings in relation to Claim 2,

Claim 5 and Claim 7 and is only impugning the other

findings and the consequential award referred to above.

Grounds of Challenge:

4. The multiple grounds of attack to the Impugned Award can be

summarised under the following two broad heads:

a) The Learned Arbitral Tribunal erred in equating the

contract price with the value of the equipment supplied.

This is purportedly contrary to the very definition of the

term "Contract Price" which covers both the goods and the

services that GE Power was obligated to provide.

Therefore, the Learned Arbitral Tribunal was wrong in

holding that GE Power had completed performance of its

obligations by May 8, 2019. As a result, the Learned

Arbitral Tribunal erred by not realising that the Bank

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Guarantee was validly invoked, which was necessary to

recoup the losses suffered due to non-performance of the

contract by GE Power; and

b) The Learned Arbitral Tribunal's reading of the Sale of

Goods Act is patently illegal and contrary to GE Power's

own pleaded case, thereby rendering the Impugned Award

patently illegal.

Analysis and Findings:

5. I have heard at length, the submissions by Mr. Darius Khambata,

Learned Senior Advocate for Marine and Mr. Shiraz Rustomjee,

Learned Senior Advocate for GE Power. With their assistance, I have

examined the voluminous record involved in the proceedings and the

rather lengthy Impugned Award (655 paragraphs spread over 221

pages, with 53 pages containing three annexed schedules).

Contract Price and break-up:

6. What lies at the heart of the consideration for purposes of

adjudicating this Petition is the issue of whether the Learned Arbitral

Tribunal took a plausible view in its consideration of the Agreement

and its sub-components - supply of goods and provision of services,

and the attribution of such consideration to the goods and to the

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services. If this issue is addressed squarely, the rest of the analysis

involved in this challenge, would stand answered one way or the other,

bearing in mind the scope of jurisdiction under Section 34 of the Act.

7. The Learned Arbitral Tribunal found that the solar plant for

Neyveli had been commissioned by April 2021 and it was in July 2021

that Marine informed GE Power that all its Inverters had been

replaced, calling upon GE Power to remove the equipment supplied by

it. GE Power protested and took a stance that the Inverters had been

used for two years and it would not pick them up.

8. As regards the Sale of Goods Act, GE Power would contend that

the goods had been supplied and accepted. The PV Modules were

actually deployed and are in use. The Inverters were said to have been

replaced but this was indicated only in July 2021, and therefore these

too had been accepted and used for two years. Marine would contend

that the services to be provided by GE Power were inextricably linked

to the supply of goods. Various services relating to installation,

operations and maintenance had not been provided and it was not open

to treat the goods as having been supplied with full consideration

becoming due, when GE Power stopped work on the ground of non-

payment for the goods supplied.

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9. The Learned Arbitral Tribunal found that Marine was conflating

two separate and independent aspects. The Learned Arbitral Tribunal

found that the Agreement indeed entailed provision of further services

after supply, but it cannot be held that despite non-payment for the

goods supplied, services would need to be provided. The contract price

had been designated and denominated for supply of the goods and was

broken up in that manner. Indeed, there was to be a provision of

services, but such services would be provided only if the supply of

goods were paid for, the Learned Arbitral Tribunal ruled. In other

words, the contract price was held to be attributable to the goods

supplied, and installation and other related services were to come in as

being an incidental part of the contract. In a nutshell, it was found that

the contract price had been attributed to the goods and unless the

goods were paid for, non-provision of services due to default in

payment for the goods, was justified.

10. Therefore, the Learned Arbitral Tribunal repelled Marine's

contention that 40% of the consideration in the Agreement was meant

to be attributed to the services component. The Learned Arbitral

Tribunal has also done an empirical analysis to indicate that Marine's

contentions in this regard would be commercially absurd and inflict

violence on a commonsensical commercial approach to the Agreement.

The Learned Arbitral Tribunal also found that the milestones indicated

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for payment were milestones for marking instalments and these

milestones could not be conflated into expecting GE Power to wait

indefinitely for events completely outside its scope of work and power

to transpire, in order to get paid the contracted consideration.

11. Each and every argument and sub-argument presented by the

parties has been analysed in acute detail by the Learned Arbitral

Tribunal, which is what has lent significant length to the Impugned

Award. Analysing Sections 42, 55 and 59 of the Sale of Goods Act, the

Learned Arbitral Tribunal has returned clear and specific findings that

cannot be regarded as being patently illegal. Dealing with case law in

the context of services accompanying the sale of goods, the Learned

Arbitral Tribunal has found that Marine could have set up a claim of

diminution for breach of warranty but could not contend that the

contract price had an attributable component of the consideration for

services. It was fond that Marine originally claimed such attribution at

15% and later at an escalated component of 40% - in itself undermining

whether the parties could be said to have been ad idem about the

break-up between goods and services.

12. Moreover, seeking diminution would point to the goods having

been accepted in the first place. Having held that the contract price

could not have been broken up into any component for services, the

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Learned Arbitral Tribunal ruled that it would follow that the goods had

been accepted and ought to have been paid for. Even a reading of the

provisions of the Agreement would indicate that the findings and

outcome are not implausible. The parties had agreed to a billing break

up ("BBU") and payment terms in the LOC, and when the parties

moved to executing the Sub-Contract, the BBU is seen to have been

linked specifically to the equipment alone. This is a clearly plausible

finding and cannot be substituted with a view of the Section 34 Court,

unless the view adopted by the Learned Arbitral Tribunal can be

regarded as a view that no reasonable person could ever take.

13. I have examined the various other facets of evidence on

deficiencies raised by Marine in the proceedings and the manner in

which the Learned Arbitral Tribunal has dealt with them.

14. Suffice it to say that as the master of the evidence and the sole

judge of the quality and quantity of evidence, the Impugned Award

represents a meticulous even if a somewhat excessively laborious

analysis of the evidence, with credible and plausible conclusions having

been rendered, after hearing the parties in over a hundred sittings. It is

not as if the length of hearings or the length of the judgement could

justify the Impugned Award as being unassailable, but clearly, the

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Impugned Award presents a rational and logical reasoning that cannot

be set aside lightly.

Invocation of Bank Guarantee:

15. As regards the invocation of the Bank Guarantee by Marine, the

Learned Arbitral Tribunal has considered the contention of Marine that

each of the Inverters had failed for some material issue or the other,

and that Marine had been constrained to replace them with Inverters

by another Chinese manufacturer. Going by the evidence led, including

registers such as the site log-book, the breakdown register and failure

logs, and other documentary evidence such as contemporaneous

written correspondence, the claim that all Inverters malfunctioned has

been rejected. The Learned Arbitral Tribunal found that a majority of

them performed perfectly well. No evidence was found about the

precise reasons for the need to replace the Inverters. Here again, the

findings do not meet the standard of being implausible for Marine to

convince this Court to displace them.

16. Noticing that the Clause 8 of the Sub-Contract explicitly provided

for a procedure of a 30-day notice that would enable specific clarity on

the cause for an intended invocation of the Bank Guarantee, it was

found that Marine had not followed the agreed due process, and on this

ground too (apart from the analysis referred to above) it was held that

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the Bank Guarantee ought not to have been invoked. This led to the

award of refund of the Bank Guarantee amount invoked with interest at

the same rate as agreed to by the parties in the Agreement, at 12% per

annum. This again, is an eminently plausible decision that is not

susceptible to being second-guessed within the scope of intervention

permissible under Section 34 of the Act.

Scope of Review:

17. It is now trite law that the Supreme Court has repeatedly iterated

that Courts must not lightly interfere with arbitral awards. The scope

of review by the Section 34 Court is also well covered in multiple

judgements of the Supreme Court including Dyna Technologies1,

Associate Builders2, Ssyangyong3, Konkan Railway4 and OPG Power5.

Even implied reasons are discernible and may be inferred to support

the just and fair outcome arrived at in arbitral awards.

18. To avoid prolixity, I do not think it necessary to burden this

judgement with quotations from these judgements. Suffice it to say (to

Dyna Technologies Private Limited v. Crompton Greaves Ltd - (2019) 20 SCC 1

Associate Builders vs. Delhi Development Authority - (2015) 3 SCC 49

Ssangyong Engineering & Construction Co. Ltd. v. National Highways Authority of India - (2019) 15 SCC 131

Konkan Railways v. Chenab Bridge Project Undertaking - 2023 INSC 742

OPG Power vs. Enoxio - (2025) 2 SCC 417

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extract from just one of the foregoing), in Dyna Technologies6, the

Supreme Court held thus:

"24. There is no dispute that Section 34 of the Arbitration Act limits a challenge to an award only on the grounds provided therein or as interpreted by various courts. We need to be cognizant of the fact that arbitral awards should not be interfered with in a casual and cavalier manner, unless the court comes to a conclusion that the perversity of the award goes to the root of the matter without there being a possibility of alternative interpretation which may sustain the arbitral award. Section 34 is different in its approach and cannot be equated with a normal appellate jurisdiction. The mandate under Section 34 is to respect the finality of the arbitral award and the party autonomy to get their dispute adjudicated by an alternative forum as provided under the law. If the courts were to interfere with the arbitral award in the usual course on factual aspects, then the commercial wisdom behind opting for alternate dispute resolution would stand frustrated.

25. Moreover, umpteen number of judgments of this Court have categorically held that the courts should not interfere with an award merely because an alternative view on facts and interpretation of contract exists. The courts need to be cautious and should defer to the view taken by the Arbitral Tribunal even if the reasoning provided in the award is implied unless such award portrays perversity unpardonable under Section 34 of the Arbitration Act."

[Emphasis Supplied]

19. Applying the aforesaid standard, I find it difficult to hold that the

Impugned Award is perverse in a manner that goes to the root of the

Dyna Technologies Private Limited v. Crompton Greaves Limited - (2019) 20 SCC

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matter, where no other view would be possible. It would not be

possible to accept the submissions made by Marine in furtherance of its

challenge to the Impugned Award inasmuch as they canvas an alternate

view which can at best be a competing plausible view. An arbitral award

is not to be reviewed through an appellate lens, but from the standpoint

of whether it falls foul of any of the limited grounds of challenge under

Section 34 of the Act. The findings in the Impugned Award represent

an eminently plausible view and for the aforesaid reasons, I am not

persuaded to set aside the Impugned Award.

Conclusion:

20. Applying the aforesaid standard of review to the Impugned

Award and the record examined by the Learned Arbitral Tribunal, I

note that the the clearly plausible finding that while services were

indeed meant to be provided along with the equipment, the parties did

not intend to conflate the facet of provision of services with the supply

of goods for purposes of determining the consideration amount. The

Learned Arbitral Tribunal cannot be faulted for likening the services

contracted being akin to servicing of electronic goods that may be

purchased in the market. The parties agreed to a BBU that was linked

directly to the equipment and was not linked to provision of services.

The Learned Arbitral Tribunal's view that neither 40% nor 15% of the

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contract price (as varyingly contended by Marine) is attributable to the

services is not an unreasonable, perverse or arbitrary finding,

warranting interference.

21. Once it is held that the contract price was reasonably linked to

the supply of equipment, and it is seen that the equipment was indeed

supplied, it would follow that there was no scope to hold that the

contract price for the equipment was not payable. The PV Modules had

indeed been accepted and deployed. The Inverters too were deployed

and although replaced later, it cannot be said that they were not

accepted. The findings of the Learned Arbitral Tribunal even in terms

of applying the Sale of Goods Act, are well-reasoned and do not lend

themselves to be patently illegal. No case is made out for holding them

to be perverse. Therefore, it would follow that the direction to refund

the amount received on invocation of the Bank Guarantee too cannot

be faulted.

22. The outcome in the arbitration proceedings may not have been

palatable to Marine, which could hold a view that another reading of

the same evidence and contract documentation is possible. However,

that conviction alone would not enable Marine to make out a case that

the Impugned Award is infirm when seen from the prism of Section 34

of the Act.

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23. For the aforesaid reasons, the Petition is dismissed, along with

attendant interim applications, if any, making no interference with the

Impugned Award. Deposits of the amount awarded, if any have been

made, shall be released in four weeks of the upload of this judgement

on the website of this Court.

24. All actions required to be taken pursuant to this order shall be

taken upon receipt of a downloaded copy as available on this Court's

website.

[SOMASEKHAR SUNDARESAN, J.]

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