Punjab power corpn challenges Rs 600-cr award pronounced by arbitrator in favour of EMTA Coal Ltd

Punjab State Power Corporation Limited  (PSPCL) has challenged an award of over Rs 600  crore pronounced  by the arbitrator in favour of EMTA Coal Limited.

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In an application filed in a Chandigarh court, the PSPCL has prayed for setting aside the order.

In the order, arbitrator directed the PSPCL to pay over Rs 600  crore for coal crushing charges/sizing charges, surface transportation charges, rejection of non-conforming rakes of coals, late payment of coal invoices and excise duty on royalty and the CST.

Regarding the surface transportation charge, the arbitrator has directed  that the parties shall calculate the amount within a month.

The award was announced after EMTA Coal Limited had invoked an arbitration clause as per the agreements.

The EMTA also filed the execution petition through Anand  Chibber, senior advocate, along with Amitabh Tewari.

An agreement was signed between the Punjab State Electricity Board (PSEB) and the EMTA in 2000, for creating a joint venture company called Panem Coal Mines Limited. A coal purchase agreement was executed between Panem and PSEB, for supply and delivery of the coal from Pachwara Coal Block to the power stations of the PSEB. According to EMTA Limited,  the PSPCL has failed to make payments that were due and payable to it under the  agreements under different heads.

The Supreme Court in September 2014 quashed all coal block allocations made by the Union Government between 1993 and 2011. In March 2015, the government again allocated Pachhwara Captive Coal Block in favour of the PSPCL. In April 2018, the PSPCL issued a fresh Request For Proposal (RFP), to invite global bids for the selection of Mine Developer-cum-Operator for Pachwara Coal Block.  The lowest bidder DBL­VPR Consortium was selected .

On the other hand, the PSPCL claims that only it and PANEM are parties under the agreements, not the claimant.

EMTA is attempting to bring claims on behalf of PANEM, which it cannot do. It also challenges the maintainability of the claims on the basis that they are time-barred and that they have been waived. The PSPCL contends that all of EMTA's claims are based on an incorrect interpretation of the relevant contractual agreements.

Accordingly, the PSPCL denies that EMTA is entitled to any relief.

However the arbitrator gave the award in favour of the company. The order says that the awarded amount shall carry interest at the rate of 9 per cent with effect from September 19, 2014, the date arbitration was invoked. The awarded amount including the costs are to be  paid within three months from the pronouncement of the award. The order says that failing  thereon, the PSPCL will be liable to pay interest at the rate of 12 per cent.