NTPC Limited Vs Starcon Infra Projects India Pvt Ltd
The case is between NTPC Limited and Starcon Infra Projects India Pvt Ltd, embodying a critical question of law, i.e., whether the order passed by the Arbitrator dismissing an application under Section 23(3) of the Arbitration & Conciliation Act is considered as the procedural order or an interim award in accordance with Section 34 of the Arbitration & Conciliation Act.
The facts of the case were that Petitioner had floated a tender for “Construction of Roads and Drains in Solapur STPP” for a total order value of Rs.22,35,16,730/-.For the same, a Letter of Award dated 18.10.2019 was issued in favour of the Respondent herein, and the Contract Agreement had been executed between the parties. However, when the dispute arose and as per the Arbitration Clause, the mechanism of settling the disputes through arbitration shall be applicable only in cases where the disputed amount (i.e. the total amount of Claims excluding claims of interest) does not exceed Rs. 25 crores. The Total amount of the Claim exceeded Rs. 25 crores, and hence, the Application under Section 23(3) of the Arbitration & Conciliation Act is being filed for withdrawal of the counter-claims No.1 and 5. However, the same was rejected by the Sole Arbitrator.
The Hon’ble High Court of Delhi has held that an order dismissing an application under Section 23(3) of the Arbitration & Conciliation Act is only a procedural order and does not qualify as an ‘interim award’ amenable to challenge under Section 34 of the Arbitration & Conciliation Act.
The case between NTPC Limited and Starcon Infra Projects India Pvt Ltd underscores a pivotal legal question regarding arbitration proceedings. The Delhi High Court’s ruling brings much-needed clarity by affirming that an order dismissing an application under Section 23(3) of the Arbitration & Conciliation Act is merely procedural and not an interim award subject to challenge under Section 34. This decision not only reinforces the procedural framework of arbitration but also emphasizes the importance of distinguishing between procedural orders and substantive awards. As arbitration continues to be a preferred mode of dispute resolution, legal certainty in such matters is essential for maintaining the efficacy and integrity of the process.
Judgement Link – https://www.livelaw.in/pdf_upload/ntpc-v-starcon-infra-projects-india-pvt-ltd-591472.pdf