ENA Sectors 2025-05-07 15:16:08 <p><span style="font-size:14px"><strong>New Delhi, May 7 (KNN)</strong> 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.</span></p> <p><span style="font-size:14px">The Court upheld the award, including an interest rate of 38.85 per cent per annum, citing the companys substantial involvement in the project and failure to rebut key factual findings.</span></p> <p><span style="font-size:14px">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.</span></p> <p><span style="font-size:14px">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.</span></p> <p><span style="font-size:14px">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.</span></p> <p><span style="font-size:14px">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.</span></p> <p><span style="font-size:14px">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.</span></p> <p><span style="font-size:14px">However, the Court held that reference to the MSE Facilitation Council is optional and that the company played a pivotal role in contract execution.</span></p> <p><span style="font-size:14px">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.</span></p> <p><span style="font-size:14px">The petition was dismissed, and the arbitral award stands enforced.</span></p> <p><em><strong><span style="font-size:14px">(KNN Bureau)</span></strong></em></p> 42006 https://knnindia.co.in/news/newsdetails/sectors/delhi-high-court-upholds-rs-656-crore-arbitral-award-against-power-firm-cites-group-of-companies-doctrine-and-enforceability-of-msmed-act 2025-05-07 15:16:08 knnindia.co.in