The Bombay High Court has rejected Marine Electricals' request to challenge a decision that favored GE Power. The court supported the arbitration panel's decision, which ordered Marine to pay GE Power for equipment provided under a contract.
Background of the Dispute
Marine Electricals (India) Ltd. and GE Power Conversion (India) Pvt. Ltd. had a contract for a solar project in Tamil Nadu. GE Power was supposed to supply solar panels and inverters. Arguments arose over payment and equipment problems, leading to arbitration.
The Contract and Disputes
- Initial Agreement: Marine hired GE Power to supply and set up equipment for a solar project. The contract included a promise to commit and an additional agreement.
- Supply Issues: GE Power delivered the equipment, but Marine complained about defects and delayed payments. GE Power stopped services because they weren't paid.
- Replacement of Equipment: Marine replaced GE Power's inverters with ones from another company, claiming they were faulty.
Arbitral Tribunal's Decision
- In Favor of GE Power: The panel decided that GE Power should receive the remaining payment from the contract and that Marine's use of a bank guarantee was wrong.
- Monetary Awards: Marine was ordered to pay Rs. 12.60 crores, with extra interest and costs, totaling Rs. 21.84 crores.
Court's Analysis
- Contract Price: The court agreed with the panel that the contract price was for the goods provided, not for extra services.
- Bank Guarantee: The panel found that Marine wrongly used the bank guarantee without following the correct steps.
Summary of Verdict
The court decided not to change the arbitration panel's decision. It highlighted that the panel's conclusions were sensible and based on a thorough review of the evidence. Marine's challenge was dismissed, confirming the arbitration panel's decision as final and showing the limited ability of courts to change such decisions.
