Setback for PSPCL, petition in Rs 1,602-cr dispute rejected

Saurabh Malik

Tribune News Service

Chandigarh, January 7

In a major setback for Punjab State Power Corporation Limited (PSPCL) in a dispute involving Rs 1,602 crore, the Punjab and Haryana High Court has ruled that its plea questioning the jurisdiction of an arbitral tribunal to adjudicate the matter was “highly belated”.

Turning down the petition, Justice Deepak Sibal asserted the tribunal’s order dismissing petitioner’s application on jurisdiction was passed on January 8, 2017. The petitioner did not challenge it for nearly two-and-a-half years. In the meanwhile, it continued to voluntarily participate in the proceedings before the tribunal without any protest whatsoever.

The petitioner chose to file the petition challenging the 2017 order only when final arguments in part had been heard by the tribunal. “The petition is thus highly belated and liable to be dismissed on this ground alone, especially when for the delay on the petitioner’s part no explanation whatsoever is either forthcoming from the record or was argued at the bar,” Justice Sibal added.

EMTA had submitted that it was entitled to and claimed against PSPCL and PANEM a total of Rs 1,602 crore.

Going into the background of the matter, Justice Sibal observed the Punjab State Electricity Board, now PSPCL, invited tenders for coal mining operations in February/March 1999. The operations were to be conducted through a joint venture to be created by the petitioner and the highest bidder.

Three agreements were subsequently entered into. Through the first, the petitioner and highest bidder EMTA agreed to form a joint venture to extract coal from central coal block. The second was joint venture agreement through which the petitioner and EMTA created company PANEM for supplying extracted coal to the petitioner. The third agreement was the coal purchase agreement between the petitioner and PANEM through which terms were set out on supplying coal to the petitioner.

Justice Sibal observed that it was admitted position that all agreements contained an arbitration clause for dispute resolution. EMTA later raised a dispute on non-payment of its dues by the petitioner and invoked the arbitration clause.

Justice Sibal added that the Supreme Court had clearly depreciated interference by the High Court in writ petitions against arbitral tribunal orders with specific reference to its orders on jurisdiction.