Tribunal rules against NTPC in shipping dispute

In a recent judgment, an arbitral tribunal constituted of Justice Vikramajit Sen (retired), Justice B P Singh (retired) and Justice Anil Kumar (retired) passed an arbitration award on 27 January 2019 in favour of offshore logistics company Jindal ITF (JITF), a PR Jindal group company, against the NTPC state power company.

The arbitration related to a dispute over a trans-shipment of coal in high seas, deep draft locations (Sandheads and Kanika Sands) from ocean-going vessels to trans-shipper/barges, and transportation of such unloaded coal in barges via National Waterway no. 1 to NTPC’s Farakka power plant situated at Farakka, West Bengal state. This was a unique and innovative project, which was introduced for the first time in India.

The arbitral tribunal held that NTPC contributed in large parts towards the delay in the construction of phase I and phase II of the project due to which JITF could not complete its work on time and, therefore, NTPC was liable to compensate JITF. The tribunal awarded the minimum guaranteed amount for the entire agreement period including interest and cost to JITF. It dismissed NTPC’s counter claim in its entirety. Accordingly, the tribunal awarded an amount of ₹20.1 billion (US$283 million) plus interest and applicable taxes to JITF.