Jaipur: The Rajasthan High Court has partly allowed Navbharat Buildcon Pvt. Ltd.’s appeal against Suzlon Energy Ltd., modifying the Commercial Court’s decision that had set aside the entire arbitral award in a dispute over wind turbine power generation.
A Division Bench of Justice Arun Monga and Justice Sandeep Taneja held that Suzlon’s generation guarantee was limited to four years, not the entire 20-year contract period. However, the Bench ruled that the Commercial Court erred in cancelling the entire arbitral award.
The dispute arose after Navbharat purchased a Suzlon S-66 wind turbine based on a projected annual generation of 28 lakh units. While Navbharat claimed that the guarantee applied throughout the 20-year project period, Suzlon maintained that the generation guarantee covered only four years, after which only a 95% machine-availability guarantee applied.
The arbitrator had accepted Navbharat’s interpretation and, in 2018, held that the generation guarantee extended for the full 20-year term. The Commercial Court later disagreed and set aside the entire award.
The High Court examined the purchase documents and the subsequent MOU and found that the contractual documents clearly provided for a four-year generation guarantee. The MOU extended the guarantee to the fourth year, taking the cumulative target from 84 lakh to 112 lakh units. For the remaining period, the contract provided only for machine availability.
However, the High Court applied the Supreme Court’s ruling in Gayatri Balasamy v. ISG Novasoft Technologies Ltd. and held that valid and independent parts of an arbitral award can be preserved instead of setting aside the award completely.
Accordingly, the Bench set aside findings on Issue Nos. 1, 6, 10, 11 and 13, which depended on the rejected 20-year generation guarantee. It preserved findings on independent issues, including machine non-availability compensation, second-year short payment and interest claims.
The appeal was therefore partly allowed, and the matter was remitted to the Commercial Court to proceed in accordance with the High Court’s findings.
20 Years Promised, 4 Years Guaranteed: Rajasthan HC Says Read the Fine Print Before You Trust the Deal.
The Rajasthan High Court has partly allowed Navbharat Buildcon Pvt. Ltd.’s appeal against Suzlon Energy Ltd., modifying the Commercial Court’s decision that had set aside the entire arbitral award in a dispute over wind turbine power generation.
A Division Bench of Justice Arun Monga and Justice Sandeep Taneja held that Suzlon’s generation guarantee was limited to four years, not the entire 20-year contract period. However, the Bench ruled that the Commercial Court erred in cancelling the entire arbitral award.
The dispute arose after Navbharat purchased a Suzlon S-66 wind turbine based on a projected annual generation of 28 lakh units. While Navbharat claimed that the guarantee applied throughout the 20-year project period, Suzlon maintained that the generation guarantee covered only four years, after which only a 95% machine-availability guarantee applied.
The arbitrator had accepted Navbharat’s interpretation and, in 2018, held that the generation guarantee extended for the full 20-year term. The Commercial Court later disagreed and set aside the entire award.
The High Court examined the purchase documents and the subsequent MOU and found that the contractual documents clearly provided for a four-year generation guarantee. The MOU extended the guarantee to the fourth year, taking the cumulative target from 84 lakh to 112 lakh units. For the remaining period, the contract provided only for machine availability.
However, the High Court applied the Supreme Court’s ruling in Gayatri Balasamy v. ISG Novasoft Technologies Ltd. and held that valid and independent parts of an arbitral award can be preserved instead of setting aside the award completely.
Accordingly, the Bench set aside findings on Issue Nos. 1, 6, 10, 11 and 13, which depended on the rejected 20-year generation guarantee. It preserved findings on independent issues, including machine non-availability compensation, second-year short payment and interest claims.
The appeal was therefore partly allowed, and the matter was remitted to the Commercial Court to proceed in accordance with the High Court’s findings.