Delhi High Court
Haryana Vidyut Prasaran Nigam ... vs Cobra Instalaciones Y Services Sa ... on 6 May, 2022
$~115 to 118
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 06.05.2022
+ O.M.P. (COMM) 4/2021 and IA Nos. 35/2021 & 36/2021
HARYANA VIDYUT PRASARAN NIGAM
LIMITED HVPNL ..... Petitioner
Through: Mr Samir Malik, Ms Iti
Agarwal and Mr Praful Shukla,
Advocates.
versus
COBRA INSTALACIONES Y SERVICES SA AND
SHYAM INDUS POWER SOLUTION
PVT LTD JV ..... Respondent
Through: Mr Pankaj Kumar Singh,
Advocate.
AND
+ O.M.P. (COMM) 5/2021 and IA No. 41/2021
HARYANA VIDYUT PRASARAN NIGAM
LIMITED HVPNL ..... Petitioner
Through: Mr Samir Malik, Ms Iti
Agarwal and Mr Praful Shukla,
Advocates.
versus
COBRA INSTALACIONES Y SERVICES SA AND
SHYAM INDUS POWER SOLUTION PVT
LTD JV ..... Respondent
Through: Mr Pankaj Kumar Singh,
Advocate.
AND
+ O.M.P. (COMM) 6/2021 and IA No. 47/2021
HARYANA VIDYUT PRASARAN NIGAM
LIMITED HVPNL ..... Petitioner
Through: Mr Samir Malik, Ms Iti
Agarwal and Mr Praful Shukla,
Advocates.
versus
Signature Not Verified
Digitally Signed
By:Dushyant Rawal
Signing Date:10.05.2022 O.M.P. (COMM) 4/2021 and Other Connected Matters Page 1 of 6
COBRA INSTALACIONES Y SERVICES SA AND
SHYAM INDUS POWER SOLUTION PVT
LTD JV ..... Respondent
Through: Mr Pankaj Kumar Singh,
Advocate.
AND
+ O.M.P. (COMM) 7/2021 and IA No. 50/2021
HARYANA VIDYUT PRASARAN NIGAM
LIMITED HVPNL ..... Petitioner
Through: Mr Samir Malik, Ms Iti
Agarwal and Mr Praful Shukla,
Advocates.
versus
COBRA INSTALACIONES Y SERVICES SA AND
SHYAM INDUS POWER SOLUTION PVT
LTD JV ..... Respondent
Through: Mr Pankaj Kumar Singh,
Advocate.
CORAM:
HON'BLE MR. JUSTICE VIBHU BAKHRU
VIBHU BAKHRU, J. (ORAL)
1. The petitioner (hereafter 'HVPNL') has filed these petitions
under Section 34 of the Arbitration and Conciliation Act, 1996
(hereafter 'the A&C Act') impugning a common arbitral award dated
29.07.2020 (hereafter 'the impugned award') rendered by an Arbitral
Tribunal comprising of a former Judge of this Court as the Sole
Arbitrator (hereafter 'the Arbitral Tribunal').
2. The impugned award was delivered in the context of disputes
that had arisen between the parties in relation with two contracts each
in respect of Packages G-14A, G-17, G-19A, and G-19B. The works
stipulated under the contracts were not finished by the respondent
Signature Not Verified
Digitally Signed
By:Dushyant Rawal
(hereafter 'Cobra') as per the scheduled completion dates.
3. A tabular statement indicating the amounts awarded by the
Arbitral Tribunal with respect to the aforesaid packages, in favour of
Cobra, is set out below: -
Packages/ G-14A G-17 G-19A G-19B
Claims
Interest on the ₹21,57,511 ₹33,46,165/- ₹35,29,154 ₹60,59,966
Liquidated /- /- /-
Damages
Amount
Refund of ₹65,59,914 ₹1,41,97,027 ₹25,11,423 ₹34,45,686
deferment /- /- [including /- /-
charges [including interest at the [including [including
interest at rate of 13% interest at interest at
the rate of per annum the rate of the rate of
13% per from the 13% per 13% per
annum period it was annum annum
from the charged till from the from the
period it 26.12.2018] period it period it
was was was
charged till charged till charged till
26.12.2018 26.12.2018 26.12.2018
] ] ]
Reimburseme Nil Nil Nil Nil
nt of tax
component of
the contract
price
Signature Not Verified
Digitally Signed
By:Dushyant Rawal
Pendente lite 9% per 9% per 9% per 9% per
Interest annum on annum on annum on annum on
the the aforesaid the the
aforesaid amounts aforesaid aforesaid
amounts from amounts amounts
from 26.12.2018 from from
26.12.2018 till date of 26.12.2018 26.12.2018
till date of award till date of till date of
award award award
Future 9% per 9% per 9% per 9% per
Interest annum on annum on annum on annum on
the sum the sum the sum the sum
awarded awarded awarded awarded
from the from the date from the from the
date of the of the award date of the date of the
award till till the date award till award till
the date of of payment the date of the date of
payment payment payment
4. The learned counsel appearing for HVPNL has assailed the
impugned award, essentially, on two grounds. First, he submits that
the Arbitral Tribunal has grossly erred in allowing Cobra's claim for
refund of the deferment charges levied on the liquidated damages
imposed by HVPNL. He states that HVPNL was entitled to levy
liquidated damages at the material time. However, at the request of
Cobra, it had deferred deducting the said charges on an understanding
that Cobra would pay deferment charges on the liquidated damages,
which HVPNL had refrained from recovering at that stage.
Signature Not Verified
Digitally Signed
By:Dushyant Rawal
5. Concededly, part of the liquidated damages, as claimed by
HVPNL, were found to be not leviable and were not charged by
HVPNL. He submits that notwithstanding that HVPNL had not levied
the liquidated damages, nonetheless, it is entitled to recover the
deferment charges.
6. He submits that the deferment charges are a separate charge as
agreed between the parties for deferring the collection of liquidated
damages and irrespective of whether the liquidated damages are
finally levied or not, HVPNL would be entitled to recover the
deferment charges.
7. The said contention is unmerited and was rightly rejected by the
Arbitral Tribunal. Cobra had agreed to pay charges for deferment of
liquidated damages at State Bank of India's base rate of interest plus
3% (that is, 13% per annum). The Arbitral Tribunal had found that this
was in the nature of interest on the liquidated damages. Since HVPNL
had agreed to defer the collection of the liquidated damages, it had
also stipulated that Cobra would pay interest on the same. The said
interest was referred to as deferment charges. However, in this case, it
was found that certain liquidated damages were not leviable.
Concededly, HVPNL had not levied the same. In these circumstances,
there is no question of recovery of interest or the deferment charges
where there is no liability to pay the principal amount (that is, the
liquidated damages). No interference with the impugned award is
warranted on this ground.
Signature Not Verified
Digitally Signed
By:Dushyant Rawal
8. Second, the learned counsel submits that the Arbitral Tribunal
had grossly erred in awarding interest on the amounts withheld by
HVPNL on account of deferment charges and liquidated damages that
were refunded. He submits that award of such interest runs contrary to
Clause 30.1 of the General Conditions of the Contract (GCC). The
Arbitral Tribunal interpreted Clause 30.1 of the GCC to be confined to
interest, which may have been suffered by Cobra and did not prohibit
award of interest on the amounts withheld by HVPNL. The Arbitral
Tribunal had also referred to Clause 12.3 of the GCC, which expressly
provided for payment of interest on the amounts withheld.
9. Concededly, this issue is also covered by the decision of this
Court in Haryana Vidyut Prasaran Nigam Limited (HVPNL) v. M/s
Cobra Instalaciones Y. Services, S.A. & M/s Shyam Indus Power
Solution Pvt. Ltd. (JV): O.M.P. (COMM) 8/2021, decided on
25.04.2022. In that case, this Court had held that the question as to
interpretation of the aforementioned relevant clauses was within the
jurisdiction of the Arbitral Tribunal and warranted no interference in
these proceedings.
10. In view of the above, the petitions are unmerited and are,
accordingly, dismissed. All pending applications are also disposed of.
VIBHU BAKHRU, J
MAY 6, 2022
RK Click here to check corrigendum, if any
Signature Not Verified
Digitally Signed
By:Dushyant Rawal
