National Thermal Power Corporation Ltd v. Siemens Atiengesellschaft

judgment that "The above correspondence shows that the parties were still negotiating on the question of their respective obligations and as to who could be blamed for delays in commissioning the overall project. It also appears that they were willing to wait for the commissioning of the combined cycle modules before taking a final view".

¶49Furthermore, this court notices that the partial final award contains an elaborate factual analysis as well as discussion of Indian law on the subject of limitation (Paras 4.2 to 4.55). These reveal that the entire correspondence between 2ndJuly, 1991 and 11th September 1998 was considered. The tribunal also applied Indian law, particularly Article

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113 of the Limitation Act. It rejected NTPC's contention that Siemens' claims were time barred. There were three broad threads of reasoning: first that the claims were not "demonstrably" crystallized earlier, given the correspondence of the parties and that the their rejection, by the Engineer in charge (of the Owner, i.e NTPC) constituted the starting point for deciding when the cause of action arose, rather than when the claims were first voiced. The second was the tribunal's reliance on Article 32 of the contract, which talked of project completion-and its consideration in the context of a series of letters exchanged by the parties, whereby NTPC represented unambiguously that Siemens' claims would be considered at the end of the project. These were reiterated in the final award; what is more, the final award also took note of all correspondence and the further correspondence as well as minutes of meeting, leading right up to the Engineer's decision of 16thAugust, 2001. In the light of this entire discussion, the tribunal – in Para 57-58 and 84-86 of the final award concluded that Siemens' claims were not time barred; it also ruled that there was a valid and binding extension of time (EOT). The final award not only took note of Damodar Das and the other decisions cited in these proceedings, but importantly was mindful of the Supreme Court inter parties binding ruling in this case (Para 53 of the final award). The final award expressly states that it is to be read with and is a continuation of the partial award. Therefore the reasoning in the partial award is expressly part of the final award. There is, in this court's opinion, no infirmity with the reasoning that till the completion of contract, claims could not be crystallized as that is based on an interpretation of the contract, which is both reasonable and within the exclusive domain of the tribunal; also, the issue of EOT likewise, was a fact based finding. Having regard to the overview of circumstances, this court holds that the tribunal diligently considered all the facts and applied the law correctly in deciding the issue of limitation and EOT. Therefore, the single judge's view that there was no patent error of law in this regard is correct and does not call for interference.

iii) Review on the merits of the findings

¶50At the stage of review of the findings, this court has to be careful that the appellate review is not of the award, but of the single judge's impugned judgment. In other words,

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the once removed ("not second guessing") jurisdiction available through the narrow lens of Section 34 has been undertaken. Therefore, the scope of this appellate review is extremely slender. Of course, in the primary jurisdiction, if the single judge egregiously overlooks a patent error, that can be corrected in this appeal. However, when all the relevant facts and the applicable law has been seen and the conclusions reflect a view that is plausible –not necessarily the only one, in law, the court would not be acted correctly if it were to substitute that view.

¶51If the above approach were to be adopted, it is apparent in this case that while undertaking the review permissible under Section 34, the single judge went into each head of claim. It was not a case put forward by NTPC that the damages and compensation or the heads under which they were awarded were contrary to substantive law-say Section 73 of the Contract Act, or the findings so shocking as to be characterized as one which no reasonable individual could countenance, if placed under similar circumstances. Being findings of fact having regard to the nature and degree of proof adduced before the tribunal, the court would not be justified in minutely examining them. The following note of caution sounded by the Supreme Court in Associated Builders (supra) is instructive: "22. Here again, the Division Bench has interfered wrongly with the arbitral award on several counts. It had no business to enter into a pure question of fact to set aside the Arbitrator for having applied a formula of 20 months instead of 25 months. Though this would inure in favour of the appellant, it is clear that the appellant did not file any cross objection on this score. Also, it is extremely curious that the Division Bench found that an adjustment would have to be made with claims awarded under claims 2, 3 and 4 which are entirely separate and independent claims and have nothing to do with claims 12 and 13. The formula then applied by the Division Bench was that it would itself do "rough and ready justice". We are at a complete loss to understand how this can be done by any court under the jurisdiction exercised under Section 34 of the Arbitration Act. As has been held above, the expression "justice" when it comes to setting aside an award under the public policy ground can only mean that an award shocks the conscience of the court. It cannot possibly include what the court thinks is unjust on the facts of a case for which it then seeks to substitute its view for the Arbitrator's view and does what it considers to be "justice". With great respect to the Division Bench, the whole approach to setting aside arbitral awards is incorrect. The Division Bench has lost

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sight of the fact that it is not a first appellate court and cannot interfere with errors of fact."

¶52Therefore, we find no infirmity with the approach of the tribunal – much less, in the impugned judgment, in so far as the findings and conclusions with respect to the merits of the various heads of claim awarded.

¶53In view of the foregoing findings, the present appeals are meritless. They are consequently dismissed with costs throughout. Accordingly, the bank guarantees which were kept alive due to interim orders of the Court shall stand discharged.

S. RAVINDRA BHAT (JUDGE)

DEEPA SHARMA (JUDGE) DECEMBER 23, 2016

Page 1 * IN THE HIGH COURT OF DELHI AT NEW DELHI Reserved on: 25.04.2016 Pronounced on: 23.12.2016 + FAO (OS) 371/2012 + FAO (OS) 372/2012 NATIONAL THERMAL POWER CORPORATION LTD. ..... Appellant Through: Dr. Ashwani Kumar, Sr. Advocate with Ms. Ruchi Gour Narula and Ms. Smitakshi Talukdar, Advocates, for appellant. versus SIEMENS ATIENGESELLSCHAFT ..... Respondent Through: Sh. Parag. P. Tripathi, Sr. Advocate with Sh. Anil Bhatnagar, Sh. Amit Dhindra, Sh. Aman Leekha, Sh. Amandeep Bawa and Sh. Shikhar Khare, Advocates, for respondent. CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MS. JUSTICE DEEPA SHARMA MR. JUSTICE S. RAVINDRA BHAT % 1. These two appeals under Section 37 of the Arbitration & Conciliation Act, 1996 ('Act')impugn a common judgment, dismissing two petitions (O.M.P. Nos. 229 and 230/ 2009) under Section 34 of the Act. The appellant, National Thermal Power Corporation Limited('NTPC' hereafter) challenged the partial Award dated 31st July 2002 and the finalAward dated 6th January 2009 passed of the International Court of Arbitration ('Tribunal') of the International Chamber of Commerce (ICC). NTPC was directed to pay to Siemens Aktiengesellschaft ('Siemens') a sum of € 17,158,557 (principal amount) on account of ClaimsC-2 to C-8, (Claim C-9being rejected). NTPC was also directed to pay Siemens € 7,604,296.38 simple interest @ 6% simple per annum on the principal amount for the period from 20th August 2001 till the date of the Award i.e. 6th January 2009 and Page 2 post award interest at 6% simple per annum. NPTC was also directed to bear the cost of arbitration i.e. US $ 877,000 excluding US $ 30,000 set aside for stamp duty and € 989,100towards attorneys' fees, expert fees and related expenses. 2. NTPC awarded Siemens, on 30th September 1989,an817 MW Gas Based Combined Cycle Power Project at Dadri, Uttar Pradesh. The contract was entered into on 6th December 1989 and the General Terms and Conditions of the Contract ('GCC') formed part of the contract. The project comprised two stages: in the first, "the open cycle" stage, was construction of four Gas Turbine Generators (Unit Nos.1-4) for power generation by use of natural gas, with waste gas escaping into the atmosphere. The second was construction of two Combined Cycle Modules, (Modules-1 and 2)combining open cycle Unit Nos.1-2 and Units 3-4 respectively. Waste gases from the open cycle were combined and utilized in the further generation of power. Each stage had specific time schedules. 3. The completion of the project was delayed by 55 months. Gas Turbine 1 was commissioned with a delay of 13 months, the Gas Turbine 2 with a delay of 12 months, the combined cycle No.1 with a delay of 51 months. Gas Turbine 3 and Gas Turbine 4 were commissioned with a delay of 11 and 14 months respectively. The Combined Cycle 2 completed successful trial operation only on 8th March 1997 with a delay of 55 months. NTPC claimed that despite the above difficulties it made all out efforts and obtained part import license in July 1990 and the balance import license in November 1990. The import license for the remaining electrical items was issued on 9th March 1991. LCs were, thereafter, correspondingly established. 4. Disputes arose between parties about the delay in the opening of Letters of credit (LCs) by NTPC, which in turn led to delays during the execution of the first open cycle. Under Clause 20.2 of the Contract, the dates- by which items of the first combined cycle were to be readied for shipment and the corresponding dates by which LCs had to be opened the NTPC- were specified. For instance, the emergency DG generator was expected to be shipped on 1st February 1990 and the LC had to be established one month Page 3 prior to that i.e. by 1st January 1990. The electrical items (Item Nos.83, 86, 88 and 90) had to be shipped by 1st May 1990. Correspondingly, the LC had to be opened on 1st April 1990. In fact, the LC for both these sets of equipment was established on 24th