HC refuses to stay ₹990 cr arbitral award against MSRDC | Mumbai news
MUMBAI: The Bombay high court recently refused to stay an arbitral award ordering Maharashtra State Road Development Corporation (MSRDC) to pay around ₹989.60 crore to Plus BKSP Toll Limited towards losses caused in collecting toll on the Bhiwandi-Shil Phata highway.
₹990 cr arbitral award against MSRDC” title=”HC refuses to stay ₹990 cr arbitral award against MSRDC” />An aribitral award is a final determination on the merits of a dispute by a tribunal and is analogous to a judgement in court.
A division bench of justice AS Chandurkar and justice Rajesh Patil on Monday dismissed a plea, seeking an order restraining Plus BKSP Toll from enforcing the arbitral award dated October 20, 2020.
MSRDC had filed the plea in their appeal against April 19, 2021, order passed by a single judge bench of the court, upholding the arbitral award and ordering it to deposit the arbitral amount of ₹898.60 crore with the court registry.
In August 2006, the contract for four-laning, improvement and maintenance of Bhiwandi-Shil Phata highway was awarded to Plus BKSP Toll, with concession period of around 16 years. Accordingly, the company widened and improved the road and started collecting toll from October 2009. The company, however, terminated the contract in March 2013, one-and-half months before the contract term was to end.
Claiming that heavy losses were caused due to diversion of heavy vehicles from the highway and exemption granted by the state government to Kalyan Dombivali and Navi Mumbai municipal transport undertaking buses, the company invoked an arbitral clause in its contract with the MSRDC. The corporation then appointed its own arbitrator and, thereafter, the presiding arbitrator was appointed.
On April 25, 2017, the arbitral tribunal passed an interim award, holding that the road contractor had validly terminated the contract on the ground of Force Majeure Events and material default on the part of the MSRDC. On October 20, 2020, the arbitral tribunal passed final award and held that MSRDC was liable to pay ₹989.60 crore to Plus BKSP Toll on account of losses caused in toll collection.
The bench headed by Justice Chandurkar dismissed the second attempt on part of MSRDC to stall enforcement of the arbitral award after noticing that the corporation’s challenge to the interim award was turned down by the court and that there was no legal basis to stay its enforcement.
“We do not find any strong prima facie case made out to stay the judgment dated 19/04/2021 passed under Section 34 of the Act of 1996 to the extent the termination of the Concession Agreement under Clause 29.8 has been held to be valid,” said the bench. “Having found that there is no prima facie case made out to stay the effect and operation of the Interim Award dated 25/4/2017, there would be no ground to stay the enforcement of the Quantum Award dated 20/10/2020,” the bench added.
