Delhi High Court Allows NHPC To Pursue Delayed Challenge To Parbati Project Arbitral Award

The Delhi High Court has allowed NHPC Limited to pursue a delayed challenge to an arbitral award arising from works executed for the Parbati Hydroelectric Project, after accepting its explanation for the time spent litigating before courts later found to lack territorial jurisdiction.

Justice Subramonium Prasad noted that NHPC approached the Delhi High Court within 30 days of the Supreme Court settling the jurisdiction question. The court also took into account that NHPC first had to obtain the return of its papers from the Commercial Court at Gurugram and then refile them in the format required in Delhi.

“In view of these facts, it cannot be said that the Petitioner was not active in pursuing the matter,” the court said.

NHPC had been directed by an arbitral tribunal to pay about Rs 29.15 crore, inclusive of pre-award interest, along with future interest, to a Patel–L&T contractor consortium that executed works for the Parbati Hydroelectric Project Stage-III in Himachal Pradesh.

The company moved to challenge the award under Section 34 of the Arbitration and Conciliation Act, filing its petition before the District Court at Faridabad based on the jurisdiction clause in the contract.

That petition was later transferred to the Commercial Court at Gurugram, which dismissed it for want of territorial jurisdiction. The Punjab and Haryana High Court overturned that view and held that the Gurugram court had jurisdiction, but the Supreme Court later ruled in BGS SGS Soma JV v. NHPC Limited that only the Delhi High Court could hear the challenge.

After the Supreme Court's ruling, NHPC refiled its petition before the Delhi High Court and sought exclusion of the time spent before the Faridabad and Gurugram courts. Accepting that NHPC had pursued the proceedings diligently and in good faith, the High Court allowed the application, permitting the challenge to proceed.