M/S. NORTHERN COALFIELD LTD. versus HEAVY ENGINEERING CORP. LTD. & ANR.

M/S. NORTHERN COALFIELD LTD. versus HEAVY ENGINEERING CORP. LTD. & ANR.

Orders of High Court rejecting the plaint solely on the ground of absence of COD permission are unsustainable as COD is dissolved; government corporations retain the right to seek judicial adjudication of disputes, and arbitral awards via non-statutory machinery are unenforceable unless accepted by both parties. All outstanding disputes between the appellant and the respondent corporation are referred to arbitration before a sole arbitrator appointed by the Supreme Court.

Parties
Appellant: Northern Coalfield Ltd.; Respondent: Heavy Engineering Corp. Ltd.; Respondent: Rampur Engineering Company Ltd.
Jurisdiction
India
Judgment Date
13 July 2016
Procedural Posture
Civil Appeal / Appeal From High Court Order
Outcome
appeal allowed
Legal Topics
Dispute Resolution Between Government Corporations, Requirement of Committee on Disputes Clearance, Enforceability of Administrative Arbitral Awards, Adjudication of Commercial Disputes
Government Contracts Arbitration Administrative Law Dispute Resolution Between Government Corporations Requirement of Committee on Disputes Clearance Enforceability of Administrative Arbitral Awards Adjudication of Commercial Disputes

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Parties

Northern Coalfield Ltd.

Appellant

Heavy Engineering Corp. Ltd.

Respondent

Rampur Engineering Company Ltd.

Respondent

Procedural Posture

Civil Appeal / Appeal From High Court Order

Legal Issues

  1. 1 Whether suit challenging arbitral award between government corporations is barred for want of Committee on Disputes (COD) clearance.
  2. 2 Legal validity and enforceability of arbitral awards made under permanent in-house administrative machinery.
  3. 3 Right of government-owned corporations to seek judicial redress despite administrative mechanisms.

Ratio Decidendi

Orders of High Court rejecting the plaint solely on the ground of absence of COD permission are unsustainable as COD is dissolved; government corporations retain the right to seek judicial adjudication of disputes, and arbitral awards via non-statutory machinery are unenforceable unless accepted by both parties. All outstanding disputes between the appellant and the respondent corporation are referred to arbitration before a sole arbitrator appointed by the Supreme Court.

Court Disposition

appeal allowed

Orders

  • Judgment and order of the High Court set aside.
  • All disputes relating to and arising out of the contracts executed between appellant and respondent referred for adjudication to Hon’ble Mr. Justice K.G. Balakrishnan, Former Chief Justice of India, as Sole Arbitrator.