While the arbitral tribunal had asked GMR Kamalanga Energy in 2020 to pay ₹1,100 crore to Sepco Electric, the Orissa High Court in September last year set aside the arbitration award on the grounds that the tribunal had created a new contract for the parties “by not only re-writing large portions of the same but also disregarding certain explicit embargoes therein, which goes against the basic notions of justice”.
According to the Chinese company, the international commercial arbitration was governed by the 2015 amendment to the Arbitration Act which insulates arbitral awards from any challenge on merits under the “fundamental policy of Indian law” or the “patent illegality” grounds.
GMR Kamalanga and Sepco entered into an agreement in 2008 for construction and operation of three 350 MW coal-fired thermal power plants at Kamalanga village in Odisha’s Dhenkanal. However, disputes arose on delays and other technical issues.
