OPG Power Generation Private Limited Vs Enexio Power Cooling Solutions India Private Limited & Anr. (Supreme Court of India)
Summary: The Supreme Court considered appeals arising from a commercial arbitration dispute between OPG Power Generation Private Limited, its holding company Gita Power, and Enexio Power Cooling Solutions India Private Limited concerning design, manufacture, supply, erection, testing and commissioning of an Air Cooled Condenser (ACC) unit with auxiliaries for OPG’s 160 MW thermal power project at Gummidipoondi. Gita Power had initially issued the supply and erection purchase orders to Enexio and made advance payments under them; OPG subsequently issued corresponding purchase orders in its own name while maintaining continuity of the contractual rights and obligations. Disputes later arose regarding outstanding payments, delay, liquidated damages, customs duty and alleged defects. Enexio commenced ICC arbitration on 02.05.2019. The arbitral tribunal ultimately made an award in its favour, while dealing separately with OPG/Gita Power’s counterclaims. OPG and Gita Power challenged the award under Section 34 of the Arbitration and Conciliation Act, 1996. The Single Judge set aside the award principally on the ground that the tribunal had adopted an inconsistent approach to limitation for Enexio’s claims and the counterclaims. The Division Bench, however, restored the arbitral award, holding that the minutes of meeting dated 19.04.2018, read with the subsequent communication dated 26.05.2018, amounted to acknowledgment of dues and that the tribunal’s view was a possible one not suffering from patent illegality. The Supreme Court was therefore required to examine whether the award was contrary to the public policy of India or vitiated by patent illegality and, within that framework, several questions concerning Gita Power’s liability, limitation, counterclaims, debit notes and adequacy of the tribunal’s reasoning.
