Summary: Nexus Infratech took the Micro and Small Enterprises Facilitation Council to court over an arbitration award. The court found the council's decision flawed and sent it back for a fresh look.
Nexus Infratech, a company working on a solar power project, got into a disagreement with Sikco Engineering Services Ltd. (SESL). Nexus claimed SESL didn't finish their work on time, which led to ending the contract. SESL, on the other hand, said Nexus didn't pay for the work done.
The argument was mainly about three bills SESL issued, totaling about ₹11.66 crores. Nexus argued these bills were fake, saying they never received the goods listed. They even pointed out that SESL's GST filings didn't match up with the bill dates.
"According to Nexus, the materials covered by the bill numbered 003 had never been received."
The Facilitation Council sided with SESL, saying Nexus owed money on the bills. They based their decision mainly on whether GST was paid, ignoring Nexus's claims about fake bills.
"The reasoning set out in the Disputed Decision is contained in the brief contents of a single paragraph."
Judge Somasekhar Sundaresan wasn't impressed. He found the council's decision lacked proper reasoning and didn't consider Nexus's arguments. The court noted that the council should have looked deeper into the claims of fake bills and mismatched GST filings.
"The reasoning in the Disputed Order is brief, unclear, and does not even deal with the issues raised."
The court decided to send the case back for a fresh arbitration, giving both parties another chance to present their evidence. This time, the council is expected to dig deeper and address all the issues raised.
"The parties are left to their own plans in addressing the arbitration panel if they argue again."
The court found the council's decision to be lacking in thoroughness and ordered a new arbitration process to ensure all issues are properly examined. Both Nexus and SESL will have to prepare for another round, hoping for a more detailed and fair decision next time.
