New Delhi, May 7 (KNN) The Delhi High Court has dismissed a challenge to an arbitral award directing a company and the owner of a thermal power plant in West Bengal to jointly and severally pay Rs 6.56 crore to a contractor.

The Court upheld the award, including an interest rate of 38.85 per cent per annum, citing the company’s substantial involvement in the project and failure to rebut key factual findings.

The case arose from a coal handling project at a thermal power plant, where a contractor was appointed under a tripartite agreement involving the owner and an engineering, procurement, and construction (EPC) contractor.

In 2013, a company was awarded related project work and subsequently issued purchase and works orders to the contractor, directly involving it in contract execution.

In 2014, a new agreement transferred the obligations of the original contractor to the owner, and the company was later confirmed as the new EPC contractor.

Disputes led the contractor to initiate arbitration, resulting in an award in 2019 that found the company and the owner liable for outstanding payments and costs.

The company challenged the award under Section 34 of the Arbitration Act, arguing lack of jurisdiction, no contractual privity, and that arbitration should have proceeded under the MSMED Act.

However, the Court held that reference to the MSE Facilitation Council is optional and that the company played a pivotal role in contract execution.

Rejecting arguments of agency immunity and procedural irregularities, the Court invoked the “Group of Companies” doctrine and emphasized the enforceability of MSMED Act provisions. The award was found to be within jurisdiction, with no ground for interference.

The petition was dismissed, and the arbitral award stands enforced.

(KNN Bureau)