Tag: Contract Law

Supreme Court Late Payment Surcharge Valid: Coal India’s Levy Ruled as ‘Change in Law’
11Jun By The Legal ChamberNo Comments
Supreme Court

Supreme Court Late Payment Surcharge Valid: Coal India’s Levy Ruled as ‘Change in Law’

The Supreme Court upheld the Appellate Tribunal for Electricity's (APTEL) ruling that a Coal India Limited (CIL) notification imposing Evacuation Facility Charges (EFC) constitutes a "change in law" event under the Power Purchase Agreement (PPA). The judgment affirmed that the power generator is entitled to compensation from the notification date with carrying cost at Late Payment Surcharge (LPS) rates on a compounding basis, based on restitutionary principles. The Court clarified that only a substantial question of law is appealable, and the supplementary bill is required only after due adjudication. Facts Of The Case: A Power Purchase Agreement (PPA) was signed on January 28, 2010, between Rajasthan Discoms and Adani Power Rajasthan Ltd. for 1200 MW. On December 19, 2017, Coal India ...
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Supreme Court Backs Arbitrator’s Power to Award Compound Interest :Rules on Interest Calculation in Award Enforcement
25May By The Legal ChamberNo Comments
Supreme Court

Supreme Court Backs Arbitrator’s Power to Award Compound Interest :Rules on Interest Calculation in Award Enforcement

The Supreme Court ruled that arbitral tribunals have the power to award compound interest (interest on interest) under Section 31(7) of the Arbitration Act, 1996. It clarified that the "sum awarded" includes both principal and pre-award interest, and post-award interest can be calculated on this total amount. The judgment overruled earlier contrary interpretations, affirming arbitrators' discretion in interest calculations unless expressly barred by contract. The Court emphasized this aligns with the compensatory purpose of arbitration awards for delayed payments. Facts Of The Case: The case involved a contractual dispute between M/s Interstate Construction (appellant) and National Projects Construction Corporation Ltd. (respondent) regarding construction work for Ramagundam Super Therma...
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Supreme Court Clarifies: When Does a Dispute Resolution Clause Qualify as Arbitration? Mediation or Arbitration
22May By The Legal ChamberNo Comments
Supreme Court

Supreme Court Clarifies: When Does a Dispute Resolution Clause Qualify as Arbitration? Mediation or Arbitration

The Supreme Court ruled that Article 20 of the Concession Agreements between MCD and private contractors did not constitute a valid arbitration clause under Section 7 of the Arbitration and Conciliation Act, 1996. The Court emphasized that clauses lacking mutual intent, impartial adjudication, and procedural fairness cannot be enforced as arbitration agreements, directing parties to pursue alternative remedies. The judgment reiterated the essential elements of arbitration clauses from K.K. Modi v. K.N. Modi (1998) and upheld precedent in SDMC v. SMS AAMW Tollways (2019). Facts Of The Case: The case involved three separate appeals before the Supreme Court concerning Concession Agreements between the Municipal Corporation of Delhi (MCD) and private contractors (SMS Ltd., DSC Ltd., and CCC ...
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Supreme Court Decides “what It Means for Future Agreements” : Lead Partner Liable for Full Payment in Power Project Dispute
19May By The Legal ChamberNo Comments
Supreme Court

Supreme Court Decides “what It Means for Future Agreements” : Lead Partner Liable for Full Payment in Power Project Dispute

The Supreme Court upheld the doctrine of privity of contract, ruling that Brua Hydrowatt Pvt. Ltd. (BHP) was solely liable for transmission bay costs under its agreement with HP Power Transmission Corporation (HPPTC), despite internal arrangements with third parties. The Court held that non-signatories (Respondent Nos. 2 & 3) could not be bound by the contract, reversing APTEL’s order. The judgment reaffirmed that contractual obligations apply only to parties to the agreement, unless explicitly extended. Facts Of The Case: The dispute arose between HP Power Transmission Corporation Ltd. (HPPTC) and M/s Brua Hydrowatt Pvt. Ltd. (BHP) over the liability for construction and maintenance costs of a 66kV power transmission bay at Urni, Himachal Pradesh. BHP, along with two other power com...
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