UCM Coal Company Ltd. Vs Adani Enterprises Ltd. (Allahabad High Court)
The Allahabad High Court dismissed UCM Coal Company Ltd.’s appeal under Section 37 of the Arbitration and Conciliation Act, 1996, upholding the unanimous arbitral award dated 20.11.2018 and the Commercial Court-I, Lucknow order dated 31.03.2023. The dispute arose from a mining contract dated 05.02.2011 under which UCM Coal Company Ltd. was the mine owner and Adani Enterprises Ltd. was the mine operator for the Chhendipada and Chhendipada-II Coal Blocks. The contract contemplated approval and clearance, development and operation stages. While the project remained at the approval and clearance stage, the coal block allocations were cancelled following the Supreme Court proceedings concerning coal block allocations, resulting in disputes between the parties.
Adani Enterprises Ltd., as claimant before the Arbitral Tribunal, sought reimbursement of expenses relating to land acquisition, mine infrastructure, mobilisation of movable and immovable assets, advances and capital commitments. The Tribunal allowed the claims to the extent stated in the award, including Rs. 126 crores, with interest at 11% per annum, along with interest on the amount awarded through the interim award dated 31.01.2017. UCM challenged the award under Section 34, contending principally that Adani had engaged sub-contractors without prior written consent, that claims were unsupported by evidence and that certain documents, including Chartered Accountant certificates, could not support the amounts awarded. The Commercial Court dismissed the Section 34 challenge, leading to the Section 37 appeal.
