GR GREEN LIFE ENERGY PVT. LTD. versus LEITWIND SHRIRAM MANUFACTURING PVT. LTD.

Citation: [2021] 1 S.C.R. 583 · Decided: 22-02-2021 · Supreme Court of India · Bench: INDU MALHOTRA, AJAY RASTOGI · Disposal: Disposed off

Judgment (excerpt)

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   [2021] 1 S.C.R. 583
583
GR GREEN LIFE ENERGY PVT. LTD.
v.
LEITWIND SHRIRAM MANUFACTURING PVT. LTD.
(Civil Appeal No.692 of 2021)
February 22, 2021
[INDU MALHOTRA AND AJAY RASTOGI, JJ.]
Arbitration and Conciliation Act, 1996 – Appellant-contractor
and Respondent had entered into a agreement to set up a Wind
Farm Project – Agreement contained an arbitration clause (Clause
20) – Disputes between the parties – Respondent invoked arbitration
under Clause 20 of the agreement, and nominated its arbitrator,
with request to Appellant to make nomination of its arbitrator –
Appellant failed to do so – Subsequently, Respondent filed petition
u/s.11(6) of the 1996 Act before the High Court, requesting the
Court to appoint an arbitrator on behalf of Appellant in terms of
Clause 20 of the agreement – High Court took the view that since
the parties had in their agreement agreed to refer all their disputes
under the 1996 Act, it was a fit case for appointment of arbitrator
and that the agreement provided for a three-member arbitral tribunal
– Respondent having already nominated its arbitrator, the Appellant
was directed to appoint an arbitrator, and it was further directed
that on such nomination, the two arbitrators would appoint the
presiding arbitrator – Appeal before Supreme Court by Appellant-
Contractor – During proceedings before Supreme Court, the parties
agreed to have their disputes adjudicated under the Arbitration &
Conciliation Act, 1996 by a Court-appointed Sole Arbitrator –
Accordingly, the Supreme Court appointed a former Judge of the
Madras High Court, as the Sole Arbitrator.
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 692
of 2021.
From the Judgment and Order dated 16.09.2020 of the High Court
of Judicature at Madras in Original Petition No. 300 of 2019.
Ms. Shweta Sharma, Diggaj Pathak, Ravi Raghunath, Ms. Aakashi
Lodha, Sanyat Lodha, Advs. for the appearing parties.
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SUPREME COURT REPORTS
[2021] 1 S.C.R.
The following Order of the Court was passed:
ORDER
Leave granted.
1. The present Civil Appeal has been filed by the Appellant-
Contractor to challenge the Order dated 16.09.2020 passed on an
Application filed under Section 11 of the Arbitration and Conciliation
Act, 1996 by the Madras High Court in Original Petition No. 300 of
2019.
2.The Appellant and the Respondent had entered into a
Development Agreement dated 10.02.2014 to set up a Wind Farm Project
in Sangli District in Maharashtra, which contained an arbitration clause.
Clause 20 of the Agreement reads as :
“20. Governing Law and Jurisdiction and Service of Process
….
c) All disputes, differences and claims or any non-payment
concerning the project work hereby created and / or touching this
presents, arising out of or in relation to anything contained herein
shall be referred to arbitration to be held at Chennai, under the
provisions of Arbitration and Conciliation Act, 1996 (inforce from
time to time). The arbitration panel shall consist of three arbitrators,
one arbitrator shall be appointed by each party and the arbitrators
so appointed shall appoint the presiding arbitrator. The parties here
to shall duly observe any interim award/s or direction/s of the
arbitration tribunal and the award in pursuance to arbitration shall
be final and binding on the parties hereto. The arbitration
proceedings shall be in English language.”
3. Disputes arose between the parties with respect to claims raised
by the Appellant-Contractor, which led to issuance of a legal notice dated
21.04.2018 seeking payment of outstanding dues of Rs. 3,26,08,545/-.
4. The Respondent vide letter dated 21.01.2019 rejected the
allegations in the notice, and contended that the Contractor had failed to
provide services as agreed under the Development Agreement. It was
further contended that the Appellant-Contractor was liable to refund an
amount of Rs.10,26,00,000/- with Interest @ 15% p.a., and pay liquidated
damages of Rs. 1,54,00,000/- to the Respondent-Company.
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HGR GREEN LIFE ENERGY PVT. LTD. v. LEITWIND
SHRIRAM MANUFACTURING PVT. LTD.
The Respondent invoked arbitration under Clause 20 of the
Agreement, and nominated its arbitrator, with a request to the Appellant
herein to make nomination of its arbitrator.
5. On 18.03.2019, the Respondent herein filed a Petition under
Section 11(6) of the 1996 Act before the High Court of Madras, wherein
it was prayed that the Court may appoint an arbitrator on behalf of the
Appellant in te

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