In a recent decision from the Bombay High Court, MahaOnline Limited faced off against Aksentt Tech Services Limited over a large arbitration award. Here’s a breakdown of what happened.
MahaOnline, a partnership between the Government of Maharashtra and Tata Consultancy Services, had a deal with Aksentt Tech Services (formerly Unity Telecom) for a project called e-Panchayat Raj Institute. This project aimed to digitize services across Maharashtra's rural areas. The agreement, signed on April 30, 2012, was supposed to last five years.
Problems started when Aksentt claimed they weren’t paid for their work. On June 13, 2019, they asked for arbitration, claiming over Rs. 40 crores in unpaid money. The arbitrator partly agreed, awarding Aksentt Rs. 25,27,78,775 plus interest. MahaOnline wasn’t pleased and took the matter to court.
MahaOnline argued that they were just middlemen. They said payments to Aksentt were supposed to happen only after they received money from the Rural Development Department (RDD). They claimed the arbitrator ignored this important point.
"The payments will be released to Unity only when MOL will get payment from RDD," they pointed out from the contract.
Aksentt countered, saying they had done their part of the deal and deserved payment. They argued that the contract terms were clear about the payment responsibilities.
Judge Sandeep V. Marne looked at the evidence, including a letter from MahaOnline admitting the amount due. The court found that the arbitrator hadn’t changed the contract but interpreted it correctly. However, the court did adjust the award to Rs. 23.63 crores, deducting MahaOnline’s fee.
The court upheld the 8% interest rate but removed the Rs. 25 lakh cost award, considering the partial success of both parties.
In this case, while Aksentt didn’t get everything they asked for, they received a significant amount. The court adjusted the award to Rs. 23.63 crores and upheld an 8% interest rate, but removed the Rs. 25 lakh cost award.
