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Bombay HC Orders Rs 218 Cr Refund to Thermax
15 Dec
Summary
- Bombay High Court orders RCF to refund Rs 218 crore plus interest to Thermax.
- The court found the arbitrator's award lacked reasoning and evidence.
- The dispute stemmed from a 2015 tender for gas turbine generators.
In a significant victory for Thermax Ltd, the Bombay High Court has quashed an arbitral tribunal's award, mandating Rashtriya Chemicals and Fertilisers (RCF) to reimburse Rs 218 crore along with accrued interest. Justice Riyaz Chagla ruled that the tribunal's decision was flawed due to a failure to provide sufficient reasoning for rejecting Thermax's arguments and basing findings on inadequate evidence.
The case originated from a January 2015 tender by RCF for gas turbine generators at its Thal facility in Maharashtra. Thermax secured the Rs 353 crore contract using Siemens-manufactured turbines. Although Thermax completed the project and handed over operations in 2018, both generators reportedly failed within weeks in 2019.
Following a Siemens report identifying filter issues and the potential impact of missed compressor washes, RCF initiated arbitration, claiming Thermax was liable for repairs. The arbitrator initially ruled in RCF's favor, prompting Thermax to challenge the decision. The court's order is stayed for four weeks, allowing RCF time to consider an appeal.
