Court junks PSPCL plea seeking dismissal of coal firm’s petition

A Chandigarh court has dismissed an application of Punjab State Power Corporation Limited (PSPCL) seeking dismissal of the execution petition filed by EMTA Coal Limited for executing an award pronounced by the arbitrator 11 years ago in its favour. The company claims the award amount is over Rs 900 crore.

In an application filed before the Chandigarh court, the PSPCL had prayed for dismissal of the execution petition filed by EMTA.

In the award dated May 29, 2024, the arbitrator directed PSPCL to pay for coal crushing charges/sizing charges, surface transportation charges, rejection of non-conforming rakes of coals, late payment of coal invoices and/or excise duty on royalty and CST regarding surface transportation charge.

The award was announced after EMTA Coal Limited had invoked the arbitration clause as per the agreements. EMTA also filed the execution petition through advocate Anand Chibber along with advocate Amitabh Tewari.

An agreement was entered into between the Punjab State Electricity Board (PSEB) and 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 PSEB.

According to EMTA, PSPCL has failed to make payments that were due and payable to it under the agreements under different heads.

PSPCL claims that only PSPCL 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. PSPCL contends that all of EMTA's claims are based on an incorrect interpretation of the relevant contractual agreements.

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, respondent number 1 PSPCL would be liable to pay interest at the rate of 12 per cent.

The counsels of EMTA argued that the award of Rs 964,29,63,905 was passed by the arbitrator following due procedure .They said that the judgment debtor has no right to raise objections akin to Section 47 of CPC. Such objections amount to going into the merits of the dispute and trying to reopen the quantification of the claim amount which cannot be determined by the executing court.

After hearing of the arguments, the court said that it cannot be said that the award amount has not been quantified, so it is not executable. This court cannot give findings that EMTA had no locus standi to invoke the arbitration proceedings being stranger to the agreement between the PSPCL and Panem.

The executing court cannot go beyond the decree or award. In these circumstances, finding no merits in the application, the same stands dismissed.