The Bombay High Court refused to grant an unconditional stay on the enforcement of an arbitral award of approximately ₹250.82 crores passed in favour of L&T-STEC JV Mumbai against the Mumbai Metro Rail Corporation Limited (MMRCL). Justice Somasekhar Sundaresan directed that the award amount, along with accrued interest, be deposited with the Registry within eight weeks, pending final adjudication of MMRCL’s challenge under Section 34 of the Arbitration and Conciliation Act, 1996.
The dispute arose from a contract concerning the design and construction of metro stations and tunnels under the Mumbai Metro Rail Project. The arbitral tribunal, by a majority, had allowed claims relating to the impact of Goods and Services Tax (GST) introduction and compensation for additional works, awarding over ₹229 crores towards GST impact and ₹21 crores for additional work. The dissenting arbitrator, however, had pegged the GST reimbursement at ₹134 crores and suggested re-evaluation by an independent accountant.
MMRCL contended that the award was perverse and that no deposit should be required for stay, alleging that the arbitral tribunal failed to properly analyse tax implications and excluded key witness evidence. Rejecting these arguments, the Court observed that the award was a reasoned outcome based on detailed contractual and technical analysis and not ex facie perverse. It held that nuanced issues of interpretation raised by MMRCL would be examined at the final hearing.
The Court also clarified that the contractor could withdraw the deposited sum upon furnishing an unconditional bank guarantee for the equivalent amount, in accordance with court rules.
Appearances:
Mr. Birendra Saraf, Advocate General, Senior Advocate, a/w Simil Purohit, Ameya Gokhale, Kriti Kalyani, Siddhant Marathe, Ansh Kumar, i/b Shardul Mangaldas, for the Applicant/Petitioner.
Mr. Vikram Nankani, Senior Advocate, a/w Indrnil Deshmukh, Saloni Kapadia, Karan Ghandhi, i/b Cyril Amarchand Mangaldas, for Respondent.
