MOHAMMAD RAFIQ,J. - (1.) This appeal under Section 37 of the Arbitration and Conciliation Act, 1996, filed by Rajasthan Rajya Vidyut Utpadan Nigam Limited, seeks to challenge the judgment of the Commercial Court (Additional District and Sessions Judge No.1), Jaipur Metropolitan, dated 13.04.2017 in Arbitration Objection Case No.51/2016, thereby dismissing the objections filed by the appellant under Section 34 of the Arbitration and Conciliation Act, 1996, to the Arbitral Award dated 27.05.2015.
(2.) Rajasthan Rajya Vidyut Utpadan Nigam Limited (for short, 'the RVUNL'), the appellant herein, is a power generating company within the meaning of Section 2(8) of the Electricity Act, 2003. It is owned by the State of Rajasthan. The appellant floated a tender in March, 2006 to select firms/consortium of firms/collaborator firms for entering into with a Joint Venture Agreement so as to form a joint venture company for undertaking the coal block development, mining of coal and arranging its transportation and delivery to the appellant's Thermal Power Stations at Chhabra Phase-II and Kalisindh in the State of Rajasthan. Pursuant thereto, one Adani Enterprises Limited submitted its bid on 12.05.2006 and emerged as the L1 bidder. A Letter of Intent was resultantly issued to it on 23.10.2006. It was thereafter that the Government of India, vide their letter dated 19/25.06.2007 allocated Parsa East and Kanta Basan coal blocks located in the State of Chhattisgarh to the appellant to enable it to meet the coal requirement for its thermal power projects. A joint venture agreement was executed between the appellant and Adani Enterprises Limited, pursuant to which the respondent-company, namely, Parsa Kente Collieries Limited (for short, 'the PKCL') was incorporated as a joint venture company. While the appellant had 26% share in that company, the majority share holding being at 74%, was retained by Adani Enterprises Limited. The appellant and the respondent thereupon executed an agreement on 16.07.2008 for development of coal block, mining of coal and arranging for transportation and delivery of coal. In June, 2009, the Central Government formulated a policy of 'Go' and 'No Go' and declared the Parsa Kente and Kanta Basan coal blocks as a 'No Go' area. On 29.07.2009, the respondent entered a Coal Mining Services Agreement with Adani Mining Private Limited (for short, 'AMPL'). It may be significant to note that the appellant-company is not a party thereto. The Ministry of Coal, Government of India, issued guidelines for preparation of a Mine Closure Plan. The said guidelines required, inter alia, the mining company to open an Escrow Account with any Scheduled Bank. The appellant under intimation to the respondent and its acceptance opened an Escrow Account on 12.07.2012 in conformity with the guidelines of Ministry of Coal dated 27.08.2009 with the Coal Controller Organization and United Bank of India as the beneficiary. As per the Coal Mining and Delivery Agreement (for short, 'CMDA') between the appellant and the respondent, the coal supply was to commence at the earliest within 42 months, or within forty-eight months from the date of allotment of coal blocks i.e. by or on 25.06.2011-a clause for extending the commencement was however provided for. The Chhattisgarh Environment Conservation Board, while approving the consent to operate on 31.12.2012, allowed the respondent to commence mining activities and supply of coal. The Respondent commenced coal supply to the appellant on 25.03.2013. The respondent on 30.8.2011 informed the appellant of the delay in the commencement of coal supply, inter alia owing to delay in receiving forest clearances and vide their letters dated 30.11.2011 and 2.3.2012 requested to invoke the Force Majeure events in the agreement and extend the date of commencement. The appellant acceded to request and recognized existence of Force Majeure events extending the date of commencement to 25.3.2013. The new scheduled commencement date of coal supply and that no penalty would be levied on the respondents for any delay in supply in the light of force majeure events, had been accepted by both parties. The respondent, however vide letter dated 27.11.2013, requested the appellant that the commencement date of coal supply yet be considered as 25.06.2011. However, this request of the respondent was rejected by the appellant vide their letter dated 27.11.2013.
(3.) Certain disputes having arisen between the parties, the respondent invoked Clause 10.2 of the CMDA dated 25-6-2011 and sought arbitration. The parties then appointed a retired honourable Judge of this Court as the Sole Arbitrator. Based on the pleadings of the parties, following issues were framed by the learned Sole Arbitrator:- i. Whether, in terms of the CMDA, 25.06.2011 was to be considered as the fixed date of commencement of coal supply? ii. Whether Royalty and Stowing Excise Duty ("SED") as applicable on he fixed dated were liable to be frozen for the purposes of the CMDA? iii. Whether 'Basic Price' was liable to be calculated by considering 25.06.2011 as the fixed date and whether further increase in Royalty and SED would become payable as per actual with effect from 25.06.2012? iv. Whether, in terms of the CMDA, Financial Year 2011-12 was the 'Zero Year' for the purposes of applying Price Adjustment? v. Whether the appellant had taken 25.03.2013 as the commencement date (of coal supply) in contravention of the CMDA? vi. Whether the appellant was the sole beneficiary of all mining activities carried out by the respondent/claimant under the CMDA? vii. Whether there was a shortfall in off-take of coal by appellant during FY 2013-14 in contravention of the CMDA? viii. If the answer to Issue vii was in the affirmative, whether the appellant was liable to reimburse the respondent/claimant and/or its sub-contractors for the expenses incurred in achieving the output to the extent of shortfall in off takes? ix. Whether the appellant was liable to deposit the Mine Closure Cost in terms of the Escrow Agreement? x. Whether the respondent/claimant had any privity of contract qua the Escrow Agreement between the respondent and the Government of India? xi. If the answer to issue no.x was in the negative, whether depositing of Mine Closure Coast by the respondent/claimant was covered by the 'Scope of Work' under the CMDA? xii. Whether the appellant had breached the CMDA by deducting monies from the bills of the respondent/claimant on the pretext of deductions towards deposits for mine closure costs? xiii. Whether the construction of a railway siding at Mamalpur was covered within the 'Scope of Work' under the CMDA? xiv. If the answer to issue No. xiii was in the negative, whether the appellant was liable to reimburse the respondent/claimant and/or its sub-contractors for expense incurred in construction of the railway siding at Kamalpur?;