NORTH EASTERN ELECTRIC POWER CORPORATION LTD Vs. OM METAL INDIA LTD

JUDGEMENT

(1.) It is a matter of deep anguish that government bodies tend to mindlessly challenge arbitral awards and the Court is sought to be misled at the appellate stage on matters of fact.

(2.) The challenge here, in proceedings under Sec. 37 of the Arbitration and Conciliation Act, 1996, is to the dismissal of a petition questioning the propriety of an arbitral award dated April 23, 2017. It is evident from the award that of the two claims, only the second claim on account of foreign exchange variation has been allowed. The fundamental premise of the challenge to the award is that the contractor quoted the price of materials in Indian rupees and nothing in the price bid of February 2, 2004 indicated any foreign exchange component therein. In short, the suggestion by the appellant is that since prices had been quoted in Indian rupees and the goods detailed in the bill of quantities were to be locally obtained, there could not have been any claim on account of increased price of the goods supplied as a consequence of the Indian rupee depreciating against the US dollar or the Euro.

(3.) This fundamental premise is completely flawed and is wholly belied by a certificate issued by the Government of India on May 15, 2006 which indicated that the Kaming Hydro Electric Project (600 MW) was declared as a mega project. Indeed, the arbitrator proceeded on the basis that it was a mega project. The certification of the work as a mega project entailed that no import duty was to be paid on the CIF component of the goods to be supplied. Implicit in this was the recognition that goods had to be imported for the purpose and supplied for the project.