r

VOLUME - 1
BEFORE THE ARBITRAL TRIBUNAL COMPRISING OF

HON'BLE MR. CHIEF JUSTICE R. C. LAHOTI,

HON'BLE DR. JUSTICE ARIJIT PASAYAT &

HON'BLE MR. JUSTICE DEEPAK VERMA

(Former Judges of the Supreme Court of India)

(' IN THE MATTER OF AN ARBITRATION

BETWEEN
re
\ ',._j

(;
'/
M/S JSC "VO "TECHNOPROMEXPORT", RUSSIA

AND

M/S NTPC LIMITED, NEW DELHI

('
(~)
BEFORE THE ARBITRAL TRIBUNAL COMPRISING
OF

HON'BLE MR. CHIEF JUSTICE R. C. LAHOTI,

HON'BLE DR. JUSTICE ARIJIT PASAYAT &

HON'BLE MR. JUSTICE DEEPAK VERMA

(Former Judges of the Supreme Court of India)

IN THE MATTER OF:

JSC "VO "TECHNOPROMEXPORT"

... CLAIMANT
···..
( -·,. . Versus

C, NTPC LIMITED
... COUNTER- CLAIMANT /RESPONDENT

STATEMENT OF COUNTER-CLAIM
INDEX OF VOLUME 1

S. No.• Description Page No.

A. Memo of Parties 3

B. List of Dates and Events 4 - 47 !

(
(";
!
Statement of Facts supporting the
• 1• 48 -112
(··>..· •

Counter-Claim

(. ;
.
Page I of 150
 2. The Points at issue I 113

Relief or Remedy sought by/ 114 - 150

3.
Counter-Claims of NTPC

4. Affidavit 151 -152 •

() i I
Authorization of Mr. Kameshwar 153
5. i
I
Jha, AGM, NTPC Ltd. Barh STPP

5. : Vakalatnama 154
i
Index '

!
provided
6. Volumes 3 - 12
(' in each
(·
~- volume

()
c· PLACE: NEW DELHI ~rTa
= ~(• o<"-li'T'l)
Add!. General Manager (ME)
DATE: FEBRUARY 7fH, 2017 l!_,el<i',tf, - <tr<f!NTPC • Barh

COUNTER-CLAIMANT/ RESPONDENT

THROU

®
()
GUST LEGAL
S-553, GREATE KAILASH - II,
NEW DELHI - 110048.
(
•,·

Page 2 of 150
 c·.
..'·
/~·-.

' A. MEMO OF PARTIES

JSC "VO "TECHNOPROMEXPORT"

ST. NOVYI ARBAT, 15 BLD 2,
MOSCOW - 119019
RUSSIA.

ALSO AT:
( 90, POORVI MARG,
(..• VASANT VIHAR,

( NEW DELHI - 110057. ••. CLAIMANT

('
\.

VERSUS

()
NTPC LIMITED
NTPC BHAVAN
SCOPE COMPLEX,
7, INSTITUTION AREA, LODHI ROAD,
() NEW DELHI - 110003.
(}j •.• COUNTER-CLAIMANT /RESPONDENT

C>
('

Page 3 of 150
(

(.
,..
B. LIST OF RELEVANT DATES AND EVENTS

DATES EVENTS

2003 • The Counter-Claimant/ Respondent

(hereinafter referred to as "NTPC" or
"Employer") floated a tender in relation to
three (3) contracts for Main Plant Package
Part-A (Steam Generator and Auxiliaries) for
Barh Super Thermal Power Project Stage -1
(3X660 MW) (hereinafter referred to as "Barh
STPP Stage-I") under International
Competitive Bidding (hereinafter referred to
as "ICB") procedures.

2004 The following three {3) parties submitted their

bids:

i) M/ s BHEL, New Delhi (hereinafter

(;
referred to as "BHEL''),
() ii) M/ s Doosan Heavy Industries &
[':
'-., Construction Co. Ltd., Korea
..
(~-> (hereinafter referred to as "Doosan")
and

Page 4 of 150
 iii) FGUP "VO "Technopromexport"
(which was later renamed as JSC "VO
"Technopromexport" and hereinafter
interchangeably referred to as the
Ci
"Claimant", "Contractor" or "TPE").
()

March The Contracts (as defined herein below) were

····--.·,
14 th , 2005 awarded to TPE vide Notifications of Award
(
(hereinafter referred to as "NoA") of date. TPE
C had to undertake the Barh STPP Stage - I
along with its collaborators M/ s Krasny
Kotelschik (hereinafter referred to as "TKZ"),
CJ
M/ s Teploelectroproject (hereinafter referred to
(1
"TEP") and M/ s Zarubezhenergoproject
(;
(hereinafter referred to as "ZEP"), which
(! collaborators had jointly furnished a Deed of
(r·:·:
(: :-·
Joint Undertaking (hereinafter referred to as
"DJU") along with TPE as part of the
documents submitted along with TPE's bid.
(;
The collaborators i.e. TKZ, TEP and ZEP shall
hereinafter be collectively referred to as "DJU
( '·':
,;,/ Associates".

c·~- •.

Page 5 of 150
(',

(>,
\: --

March NTPC and TPE signed the following three (3)

25th, 2005 contracts for the aforesaid package:

'First Contract' vide NoA No. CS-9558-102-

2-FC-LOA-4520 along with the appendices
thereto and contract agreement dated March
25 th , 2005, for supply of plant and equipment
including mandatory spares (procured from
outside India) on CIF basis at a contract price
of USD 391,121,452/- (US Dollar Three
Hundred Ninety One Million One Hundred
Twenty One Thousand Four Hundred and
Fifty · Two only) amended to USD
388,907?009/- {US Dollar Three Hundred
Eighty Eight Million Nine Hundred Seven
Thousand and Nine only) vide Amendment
No. 6 dated June 18 th , 2009.

'Second Contract' vide NoA No. CS-9558-

102-2-SC-LOA-452 l along with the
( ..;).,
appendices thereto and contract agreement
dated March 25 th , 2005, for supply of plant
.,,.
( )' and equipment including mandatory spares
(procured within India) on ex-works basis at a
(
.-.... contract price of INR 686,993,784/- (Rupees

Page 6 of 150
 • Six Hundred Eighty Six Million Nine Hundred
Ninety Three Thousand Seven Hundred and
Eighty Four only) amended to INR
772,570,796/-{Rupees Seven Hundred
Seventy Two Million Five Hundred Seventy
Thousand Seven Hundred and Ninety Six
only) vide Amendment No. 3 dated September
J5ti1 , 2007.

'Third Contract' vide NoA No. CS-9558-102-

( 2-TC-LOA-4522 along with the appendices

thereto and contract agreement dated March
25 th , 2005, for providing all services i.e. port
'~...
\j
handling and clearance for the imported
goods, inland transportation and insurance,
installation, testing and commissioning at a
C
contract price of USD 2,818,288 /- (US Dollar
Two Million Eight Hundred Eighteen
Thousand Two Hundred and Eighty Eight
only) + INR 2,034,351,463/- (Rupees Two
Billion Thirty Four Million Three Hundred
Fifty One Thousand Four Hundred and Sixty
Three only) amended to USD 2,818,288/- (US
(;
Dollar Two Million Eight Hundred Eighteen
Thousand Two Hundred and Eighty Eight

Page 7 of 150
 only) + INR 2,034,288,297 / (Rupees Two
Billion Thirty Four Million Two Hundred
Eighty Eight Thousand Two Hundred and
Ninety Seven only) vide Amendment No. 4
dated June 18 th , 2009.

The capitalised term "Contracts" appeanng

hereinabove or hereinbelow includes the three
(3) contracts mentioned in the foregoing para
a) - c) (i.e. First Contract, Second Contract

c· and Third Contract) and various other

documents such as Special Conditions of
(,
,...
Contract along with amendments and
clarifications thereto (hereinafter referred to
as "SCC"), General Conditions of Contract
along with amendments and clarifications
thereto (hereinafter referred to as "GCC"),
Technical Specifications and Drawings along
with its amendments and clarifications, the
Bid· and the Price Schedules, Procedures
along with amendments and clarifications
thereto.

The Contracts consisted of a crossfall breach

provision whereby any breach under any of
(',
the three (3) contracts i.e. First Contract,
( ..

(
Page 8 of 150
' '

Second Contract or Third Contract shall

automatically be deemed as a breach of
!'-~· ", remaining two (2) contracts and any such
,_,,c:
breach shall give NTPC an absolute right to
terminate all the Contracts and/ or recover
damages there under.

As per the time schedule prescribed in the

Contracts, the completion of work (hereinafter
referred to as " Completion of Facilities" for
the three (3) units (of 660 Mega Watts each)
(
were to be accomplished by:

> Unit# 1: January, 2009

> Unit# 2: July, 2009
> Unit# 3: January, 2010
()
February TPE, vide letter of date,_ communicated to
21 st , 2006 NTPC about change in legal status of FGUP
"VO "Technopi:-omexport" 1.e. Federal State
Unitary Enterprise "Foreign Economic
Association "Technopromexport" to JSC "VO
"Technopromexport" I.e. Joint Stock
() Company "Foreign Economic Association
(, "Technopromexport". However, no supporting

( documents were furnished by TPE evidencing

(" .,
'· . Page9 of 150
 such change along with the said letter.
I

July 4 th , Upon request from NTPC, TP.E provided some

2006 documents with regard to change in legal
status of TPE but the same could not clarify
the matter of succession under the applicable
Russian laws. Therefore, NTPC requested TPE
for a legal opinion from a Russian law firm
regarding implications of the change of status
of TPE. NTPC further asked TPE to furnish
! indemnities from the founder shareholders to
\ "

keep NTPC indemnified.

Vide letter of date bearing no. 356-01/723,

TPE informed NTPC that Russian State is the
only shareholder of TPE and it is not possible
to furnish indemnity on its behalf. TPE
further declined to provide legal opinion from
a Russian law firm confirming the validity of
change in status and succession to the
Contracts stating that the same was not ·
possible since no law firm could get access to
all the internal documents relating to the said
change as well as access to all of TPE's

/ .
\ .. Page 10 of 150
C offices.

Consequently, the necessary changes in the

Contracts ans1ng from the fact of alleged
/."~---
\_ ..
changed legal status of TPE, could not be
agreed to and executed.

August Pursuant to the alleged development with

1-··, 2 nd , 2006 regard to the change in legal status of TPE for
\ .

the reasons entirely attributable at their (TPE)

( _-

own end, TPE served a notice upon NTPC

l seeking "Reduction of Work" under Clause
( '' 41.2 (b) of the GCC alleging that it was
unable to perform its contractual obligations
C
since amendments to the Contracts in respect
C
of change of legal status of TPE could not be
agreed to and was therefore not signed.

October Pursuant to intervention at the Government

(; 20 th , 2006 level, TPE finally agreed vide letter of date to
r··,
\.._} provide the necessary documents to the
Russian law firm appointed by NTPC to
render legal opinion on the change of status
ofTPE.
c-

( Page 11 of 150
 October Based on the documents provided by TPE to
26 th , 2006 the Russian law firm engaged by NTPC, the
_process of establishing the validity of change
November 1n legal status of TPE and its success10n
-lO th , 2006 could be initiated and ascertained.

December TPE served a notice for "Suspension of Work"

15 th , 2006 with effect from. January 1st, 2007, under
I,_
Clause 41.2 (b) of the GCC alleging abnormal
delay 1n s1gn1ng the amendments to the
Contracts in respect of change of legal status
., ofTPE.
( ..,}

December NTPC issued the necessary Amendment No. 2

22nd, 2006 to the Contracts based on inputs received
from the Russian law firm.

() The above amendment included a clause No.

3 which reads as under:

"The parties hereto acknowledge and agree

that neither party hereto shall be liable to the
other in any manner whatsoever in respect of

(
Page l2 of 150
 any matter arising out of or relating to the
recognition of the Company as successor to
FGUP by NTPC from the date it arose till the
()
date hereof and · each party accordingly
C', releases the other from any claims or
( liabilities on account thereof'.

December TPE refused to accept the proposed

' ..
I·, .' 26 th , 2006 Amendment No. 2 for the alleged reasons,

C inter alia, that the above quoted clause no. 3

in the said amendment was not acceptable to
TPE. TPE, further, stated that completion
(;
dates for the respective units as per the
() Contracts could not be met by TPE.
C) January A meeting was held between NTPC and TPE.
(· ;
24th, 2007 During the meeting, TPE offered to supply
and install only one (1) unit of 660 .MW out of
the three (3) units agreed to be installed and
commissioned under the Contracts. TPE also
()
sought time extension in Contracts schedule
c~
~-;_;)
as well as extra compensation by way of
removal of. existing price variation ceiling of

() 20%.

Page 13 of 150
 •

{ ,.
February NTPC categorically rejected TPE's demand for
24 th , 2007 inclusion of provisions with regard to time
extension and removal of the existing price
variation ceiling of 20% in the amendment
(
forwarded by NTPC on December 22 nd , 2006.

NTPC further brought to the notice of TPE

( various breaches and misrepresentations in

relation to the subject Contracts committed
{
by TPE including absolutely unjustified and
'-·- untenable suspension of work by TPE w.e.f.
January 1 st , 2007. NTPC again requested TPE
to resume work, immediately.

C·
'·

March 5 th , A meeting was held between NTPC and TPE.

2007 TPE mentioned that they were unable to
execute the Contracts as per its original
'\.. J
terms and conditions and requested NTPC for
considering time extension in the Contracts

@) schedule. NTPC clarified that the Contracts

will have to be executed as per the terms and
(.,
conditions provided in the Contracts and no
(
change at the given stage could be agreed to.
( ,. ..

r
Page 14 of ISO
 ;
.
(
'. April 4 th , NTPC wrote a letter of date to TPE asking TPE

c.· 2007 to resume work within fourteen (14) days

failing which NTPC might take action against
e?
TPE in terms of the Contracts including the
(~!
carrying out of the work under the Contracts
pertaining to the "Completion of Facilities" by
itself or by employing any third party at the
( cost and expense of TPE.
I .. ·

C.·
April 18 th , TPE conveyed its willingness to sign the
2007 Amendment No. 2 dated December 22 nd ,
2006, after the deletion of clause 3 of the said
,-,
() amendment. The said clause no. 3 is quoted
() hereinabove.

April 20 th , NTPC issued the revised Amendment no.2 to

2007 the Contracts which were duly accepted by
,. .
lJ TPE. Vide Amendment No. 2, the parties
agreed that the company 1.e. Joint Stock
ei
Company "Foreign Economic Association
( \

"Technopromexport" shall be deemed to be

c· the party in place of FGUP and the name of

Page 15 of 150
 the FGUP 1.e. Federal State Unitary
Enterprise "Foreign Economic Association
"Technopromexport" wherever appeanng 1n
the text of the Contracts was substituted by
the name of the company 1.e. Joint Stock
Company "Foreign Economic Association
"Technopromexport".

September A meeting between NTPC an_d TPE at Moscow,

( 19 th , 2007 Russia. During the meeting, TPE failed to
make commitments regarding
(. ·'
commencement of erection work and ordering
()
of the balance critical items. TPE again raised
the issue of extension in Contracts schedule
and sought extra compensation by way of
removal of existing price variation ceiling of
20% provided in the Contracts. During the
. meeting only, NTPC reiterated that schedules
and tern:i,s of the Contracts shall not be
changed and any claim of TPE with regard to
time extension and / or cost compensation
shall be dealt strictly within the framework
and terms of the Contracts.

(
•.
Page 16 of 150
1·:·

\.

,,,·

:(
November· During a Contract Review Meeting
20 th - 21st, (hereinafter referred to as "CRM") of date, TPE
2007 again requested NTPC to consider time
extension 1n the Contracts schedule and
removal of existing pnce variation ceiling of
20% provided 1n the Contracts. NTPC
reiterated that schedules and terms of the
Contracts shall not be changed and any claim
of TPE with regard to time extension and/ or
(.:
cost. compensation shall be dealt strictly
(
within the framework and terms of the
Contracts.

(_:
(,
'-~·.,
April 22 nd , After several pnor communications and
I.

I),:) 2008 reminders, NTPC issued a letter to TPE for

(:-
,,-_:. immediate ordering of auxiliary boiler and
start of boiler erection, failing which NTPC
would be constrained to take further course
l)
of action as per the prov1s10ns of Clause
42.2.2 of the GCC.
(:,
(:
/·
September Despite the best efforts from NTPC to resolve
(

( Page 17 of 150
!. 9 th , 2008 the situation, TPE failed to adhere to the

(,
terms of the Contracts. Therefore, NTPC was
..
constrained to serve notice on TPE invoking
Adjudication under Clause 6.1 of the GCC in
the event TPE failed to commence Unit # 1
boiler erection by September 23 rd , 2008.

September TPE, instead of commencing the work 1n

22 nd , 2008 relation of Unit # 1 boiler erection, requested

( ,
for appointment of an Adjudicator.

('. October - Justice (Retd.) Anil Dev Singh was appointed

(, November, as the Ld. Adjudicator and accordingly the

(,, 2008 adjudication proceedings were held before the

Ld. Adjudicator.
!
,;_·.;-

November The decision of the Ld. Adjudicator could be

c, 28 th , 2008 summarized hereunder:

J;,. NTPC was justified in raising the issue
of validity of the transformation of TPE
and its succession to the rights and
.r -·. ·.
l ... obligations under the Contracts.

f:.. >.
Page 18 of 150
'
( Further, NTPC was justified in seeking
'
,,,., . documents and information regarding
, .. .
\.
the said transformation and did not act
unreasonably in seeking legal opinion.
);> Both the parties have been responsible
for infringing the time imperatives.
);> It 1s not possible to quantify the
proportion in which the parties have
contributed to the delays.
c~·:
);> An attempt needs to be made to resolve
( the problem by an attitude of give and
take.

i
December Pursuant to the decision of the Adjudicator,
()
2008 - both parties (NPTC and TPE) held multiple
March rounds of discussions in India as well as in
2009 Russia to work out a mutually acceptable
solution. However, all such discussions
remained stalemated.

June 30th , A communication was received by NTPC from

2009 the · Central Bureau of Investigation
(hereinafter referred to as "CBI") regarding
[·.'
\ -., ..
on-going criminal investigation in the matter

er·· Page 19 of 150

( . of award of Contracts by NTPC to TPE for
'·

Barh STPP Stage - L It came to the notice of

NTPC that TPE had appointed M/s Ravina &
Associates Pvt. Ltd. as its "Local
Representative" vide agreement dated October
25th, 2004 {i.e. prior to bid submission date).
It 1s pertinent to note that TPE, 1n such
situation, was under obligation to make a
full disclosure regarding such local
representative under Clause 8.3 (h)

C Attachment 8 of Instruction to Bidders

(hereinafter referred to as "ITB").

,·· ....
,., .

CBI also alleged that TPE had paid illegal

comm1ss10n of USD 22,334,530.73/- (US
Dollar Twenty Two Million Three Hundred
Thirty Four Thousand Five Hundred Thirty
and Seventy Three cents only) to M/s Ravina
& Associates Pvt. Ltd. based on a percentage
of the value of Contracts which was not
(.) permitted under the Contracts.

C September In view of the communication received from

('

Page 20 of 150
( .· 2 nd , 2009 the CBI, NTPC sought legal opinion regarding
, . proper course of action in the matter. The
\. :
legal op1n1on, as sought, was received by
('.
\.;./
NTPC from their legal advisors vide letter of
date.

September NTPC furnished the said legal op1n1on to

4 th , 2009 Ministry of Power and also furnished its
recommendation inter alia stating that

C "keeping in view the facts and circumstances

mentioned in our earlier brief and the legal
(·
., opinion obtained by NTPC there appears to be
( _,,;
no other alternative but to terminate the
r
\.., ·,
Contracts and get the Contracts completed at
the cost and expenses of TPE. · Accordingly,
NTPC may be allowed to terminate the
subject Contracts entered into by it with M/ s
Technopromexport of Russia for Steam
. , Generator Package for Barh STPP Stage-I."

(. '·.
January NTPC vide letter of date stated that TPE
~·· '
9 th , 2010 raised exorbitant claim of increase 1n
Contracts price by 87% in a meeting held on
,.

( Page 21 of 150

;_:_.::_.
\·"·.·
'.,
 December 10 th , 2009. The letter further
highlighted the repeated breaches committed
by TPE, inter alia, failure to commence
erection, failure of adherence to the
sequential supply schedule, persistent failure
(: to execute and perform its obligations as
required under the Contracts and discharge
of its (TPE) obligations under the First
Contract selectively by supplying the material
non-sequentially and disregarding the supply

C schedule.

Further, NTPC mentioned that due to delay in

C start of boiler erection, approximately 41,000

MT of material was lying at the site which
was also causing hindrances 1n the
implementation of B?1"h Stage-II.
r.

March A meeting was held which was chaired by the

12 1h, 2010 then Hon'ble Minister of Power and attended
by Secretary (Power), Special Secretary
(Power) · and Director (Thermal) from Ministry
( i of Power, CMD, Director (Fin.), ED (CC&M)
¼f

and GM (CS) from NTPC and Mr. Sergey V.

(.
Chemezov, General Director, State

Page 22 of 150
i/
\ _
"•

..
. Corporation, Russian Technologies, Mr.
(··. Alexander A. Lukin, General Director, TPE,
Mr. A Schegolev, Director of representation of
TPE in India from TPE.

Following were discussed and agreed during

c·, the said meeting:

:i.- Revised L2 schedule shall be worked

out jointly and agreed between NTPC
and TPE.
( ;.. Price variation shall be calculated as
per revised Contracts schedule and
Contracts formula and as per indices
provided in the Contracts since 2005.
;.. Price variation ceiling of 20% shall be
removed from the First Contract.
;.. Erection will start within a month from
date.
Based on the above, both parties (NTPC and
TPE) agreed to work out detailed action plan

C for implementation.

(0)

May 28 th , Pursuant to the aforesaid meeting dated

2010 March 12 th , 2010, the Ministry of Power,

C Page 23 of 150
("

vide letter dated May 28 th , 2010, forwarded

the decision of Cabinet Committee on
Infrastructure (hereinafter referred to as
"CCI") that, notwithstanding CBI's advisory,
(o",,
\.:" >;
NTPC may carry on with the Contracts with
TPE in Barh STPP Stage - I.

June- Based on the above decision of Ministry of

August, Power, discussions were held between NTPC
( . 2010 and TPE.

( ,._·,··.
October The amendment to the Contracts,
29 th , 2010 incorporating agreements reached between
NTPC and TPE as per above discussions, were
,. issued on October 29 th , 2010.
I: '.

As per the amendments, the revised

schedules for commencement and completion
of work (hereinafter referred to as
~ "Completion of Facilities") for three (3) units
Cl of 660 MW were agreed to be as under:

(. };> Unit# 1: October 29 th , 2013

(· };> Unit# 2: April 29 th , 2014

Page 24 of 150
 .· ..
V .:·
\. ..
>' Unit# 3: October 29th, 2014

Further, the 20% ceiling on price adjustment

on Freight On Board (hereinafter referred to
as "FOB") price for plant and equipment was
removed for the First Contract.

The above amendments were signed and

confirmed by both parties (NTPC and TPE).
Pursuant to the aforesaid amendment, NTPC
paid approx. USD 60,000,000 /- (US Dollar
Sixty Million only) as additional pnce
(.
adjustment to TPE till termination of the
Contracts in January, 2015.

December TPE resumed execution of Contracts,

2010- however, again lagged behind the mutually
June 2013 agreed amended· schedule.

c.
Activity Amended Status
Schedule I
() Mobilization of • Was to be Actually
erection achieved by mobilized on
C:' December 14th, February
(

( Page 25 of 150
 j sub-contractor 2010 . 10th, 2011~
delay of about '
I
two (2)
months,

Commencement! Commencement Commenced

of boiler by December on March
erection of Unit 30th, 2010 17th 2011 ·
' '
# 1 delay of over
two and a half
(2,5) months,
/"

l. Only 20,946.2
MT out of the
49,172 MT
{i.e. 42.6%)
was erected
till the date of
termination
i.e. January
14th, 2015,

Commencement Commencement: Commenced

( . of boiler · by June 30 1h, on July 29th
\ ..:_)

erection of Unit 2011 2011; delay of

(}
#2 one (1)
f. rnonth. Only
(' , 17,474 l\1T
I
J out of 47,500

Page 26 of 150
''

'
i MT (Le.
(.) 38.2%) has

r:~ .:- been erected

s.:.--~::
till date of
>
termination
i.e. January
14th, 2015.

Commencement Commencemen Commenced

!
!

of boiler t by December on January

' ' erection of Unit 30th 2011
'
25th , 2012·'
#3 delay of over
nearly one (1)
month. Only
r ,
t¼· '
7,979 MT out
of the

( 45563.4 MT
(i.e: 17.5%)
was erected
till the date of
termination
i.e. January
( 14th, 2015.
@J Completion of Was to be
'

Orders for
!

( ;I ordering of completed by many maJor

(' ', Bought Out May 28th, 2011 BOis were yet
\.,,''
Items to be placed
(

Page 27 of 150
 (hereinafter as on the date
referred to as of termination
"BOls") for all i.e. January
('
"·"' three (3) units 14th, 2015.
(of 660 MW
each)
----····--------
Completion of Was to be Not completed
engineering for completed by till date of
all three (3) January 28 th , termination
, ...
' units (of 660 2012 i.e. January
/'
·\ .'
MW each) 14th ' 2015.

Boiler hydraulic Was to be Not completed

test for Unit # 1 carried ·out by till date of
September 27th, termination
f '
\.. r;
2012 i.e. January
( 14th, 2015.

Boiler light-up Was to be Not completed

& alkali boil out carried out by till date of
completion for January 28 th , termination
Unit# 1 2013 i.e. January
(_; . 14 th , 2015 .
(} Steam blowing Was to be Not completed
completion for carried out by till date of
Unit# 1 April 28 th , 2013 termination
Le. January

(
\,_ . Page 28 of 150
r

!
14th , 2015. l
r.
\- Synchronisation! Was to be Not completed
and coal firing carried out by till date of
for Unit# 1 June 29 th , 2013 termination
(\ i.e. January

C: 14th, 2015.

The issues of aforesaid delays were regularly

C raised by NTPC vide various letters and
meetings. In this respect the letters dated
C
August 2011, August 26th, 2011,
(
December 13th , 2011, January 5 th , 2012,
() February 16 th , 2012, March 29 th , 2012, April
C·"> lOth,-2012, May 10th, 2012, May 16th, 2012,
July 9 th , 2012, the record notes of
C
discussions held during CRM on August 30 th ,
2012, Minutes of Meeting (hereinafter referred
to as "MoM") held between November
23<d-26 th , 2012, December 27th, 2012, record

l • notes of CRM held on January 28 th , 2013 and

on June 7 th , 2013, are relevant.

(; July CRM was held between NTPC and TPE.

(

Page 29 of 150
(
 8th-gth, During the meeting, TPE explained that the
..
,,' .
2013 main reason for delay in executing the
Contracts was financial problems being faced
by TPE. TPE further stated that it would
arrange sufficient funds to execute the
Contracts by the fourth quarter of 2013 and
TPE had accordingly submitted their program
for shipment/ ordering.

September Apex level meeting was held between NTPC

25th, 2013 and TPE to expedite the work progress and
( ·.
Completion of Facilities. During the meeting,
it was confirmed by TPE that the
c. commissioning of Unit # 1 shall be achieved
by September, 2015 (as against the mutually
agreed amended schedule of June, 2013) on
best effort basis and commissioning of
subsequent units shall be respectively
...
\ achieved at a gap of six (6) months thereafter.
TPE confirmed that it's financial constraints
will be resolved by October, 2013, with
financing of USD 120,000,000/- (US Dollar
One Hundred and Twenty Million only) by
C•·· TPE and additional financing of USD

Page 30 of 150
\ . ' 450,000,000/- (US Dollar Four Hundred and
/·, Fifty Million only) with support from the
\
Government of Russian Federation.
' ..
'\-'.~:.
November The matter of delays in ordering and supply
2013- of material/ equipment by TPE was regularly
..<.
\ ..
March raised by NTPC vide various letters and
2014 meetings (dated November 1 st , 2013;
November 11th, 2013; November 29, 2013;
December 05 th , 2013; December 16 th , 2013;
C'.
December 17 th , 2013; January 20th, 2014;
(
January 31 st , 2014; February 13th, 2014;.
(
'· February 14 th , 2014; March 14 th , 2014 and
March 28 th , 2014) but to no avail.

It is pertinent to mention that w.e.f.,

;
,,-· ... December, 2013, TPE stopped shipment of
equipment/ material due to financial
problems being faced by TPE. TPE did not
even ship the equipment/ material which
was ready for shipment and for which

(: Material Dispatch Clearance Certificates

(hereinafter referred to as "MDCCs") were
e]
duly issued and the equipment/ material
(> for which letter of credit were issued since
C November, 2013.
(

! Page 31 of 150
 March 3 rd CRM was held between NTPC and TPE at
- 5 th , 2014 Moscow. During the meeting, TPE indicated
that unless TPE received additional financial
support of USD 570,000,000/- {US Dollar
Five Hundred and Seventy Million only) from
the Government of Russian Federation, the
supply of balance material and ordering of
BOis could not be done.

r···.·
(
March TPE, vide its letter of the date, informed NTPC
12 th , 2014 that TPE had the intention to complete its
(
obligations under the Contracts provided it
('.:
(TPE) gets relevant support from the
(~' Government· of Russian Federation in so far
as raising of additional finance for Barh STPP
Stage-I was concerned and the same had
been taken up at the highest government
level with respect · to the existing legislative
r :.:.

' and budgetary procedures.

May 15 th , NTPC, vide letter of date, expressed their

( ;
'V~'
2014 grievance for the 45,950 MT of material which
was lying idle at site as a consequence of
( .-'

Page 32 of 150
1·
r

unplanned and intentional non-sequential i

supply of material by TPE.

! .
'.

August 8 th , NTPC issued notices to TPE's DJU Associates,

('-·, 2014 invoking provis10ns of DJU under the
\.
Contracts. NTPC sought the said DJU
Associates to perform their respective
obligations under the Contracts. NTPC laid
emphasis on para 2 of the said DJU wherein
it was undertaken, declared and confirmed by
the DJU Associates that in case of any breach
(;
of the Contracts committed by the
(;
Contractor, they shall be fully responsible for
( ... \. the successful performance of the services
,.
\
included in their scope of obligations under
the Contracts and to carry out all their
respective obligations under the DJU.

September An apex level meeting between NTPC and TPE

10 th , 2014 was held in New Delhi. During the meeting,
Director General, TPE indicated completion of
the Unit # 1 by December, 2015. However,

(' TPE did not sign the minutes of the said

,. ..._ meeting.
t .
(

c. Page 33 of 150
r·
I'' . .

\._, - September TPE requested NTPC for an increase in the

12 th , 2014 contract pnce to the tune of USD
230,000,000/- (US Dollar Two Hundred and
Thirty Million only) by way of additional
( :·-,}
·- finance.

NTPC, vide another letter of date to TPE

replied that extra financing was not discussed
in the meeting dated September 10 th , 2014

c·. and the same was not admissible as per the

Contracts. Further, TPE was requested to
comrmss1on the units as committed by
(' Director General, TPE 1n the aforesaid
C> meeting.
('
September! TPE, however, vide its letter of date, revised
26 th , 2014 (further increased) its demand for an increase
1n the contract price to the tune of USD
248,000,000/- (US Dollar Two Hundred Forty
Eight Million only) from NTPC by way of
additional finance. TPE, further, estimated
that Unit # 1 could be commissioned by
(,,.)"·-"' November, 2016, Unit# 2 by May, 2017 and
Unit# 3 by November, 2017.
C

Page 34 of 150
;
(

;
(
.·
Ii
September TKZ, vide letter of date (received on October
30th, 2014 7th, 2014) informed NPTC that it was
interested 1n continuation and successful
completion of the works under Barh STPP
Stage - I and requested for a tripartite
meeting involving NTPC-TPE-TKZ.

October NTPC, vide letter of date replied to TPE's letter

8th, 2014 dated September 26th, 2014 and stated that
NTPC would make payments only as per the
terms of the Contracts and further stated that
extension of completion dates were not
acceptable.

October Protocol of XIX meeting of the Working Group

30th-31 st, on Energy and Energy Efficiency' under the
2014 India-Russia Inter- Governmental
Commission on Trade, Economic, Scientific &
Technological and Cultural Cooperation was
held in New Delhi wherein it was categorically
(;
communicated that if a satisfactory timetable
C for completion of work is not agreed between
(

Page 35 of 150
C
'.
t

( the two sides (NTPC and TPE) by December

1st , 2014, NTPC would take appropriate steps
according to terms of the Contracts.

(.) November Protocol of the XX Session of the Indian-

·--
5th, 2014 Russia Inter-Governmental Commission on
Trade, Economic, Scientific, Technological
and Cultural Cooperation was held in New
Delhi on November 5 th , 2014, wherein the
(" ._
l ..
__, recommendations made during the Protocol
of XIX meeting of the 'Working Group on
(':
Energy and Energy Efficiency', were
{~--,
~./
approved.

November Tripartite meeting was held between NTPC,

11 th , 2014 TPE and TKZ. During which the following
were discussed:

• TKZ expressed its inability to execute

the Contracts in its entirety.
• TKZ informed that they were ready to
(
~;
start supply of balance material within

(,
... their scope of work (upto port as per
Contracts between TPE and TKZ) in the

Page 36 of 150
( event TPE releases their outstanding
payment of USD 5,500,000/ (US Dollar
Five Million Five Hundred Thousand
r,,.._··
\, ,.· only) for already supplied material over
. and above the payment required for
supplies of balance material.
• TKZ, further, expressed their inability in
providing any services/ support· in
procurement of other equipments/
components/ systems or any other
involvement for completion of steam
generator Package, without involvement
ofTPE.

I . November NTPC, vide letter of date, provisionally

14th, 2014 extended the Contracts period up to October
29 th , 2015, without prejudice to their right to
levy liquidated damages. All the other terms
and conditions of the Contracts between
parties remain unaltered.

November TPE, vide its letter of date proposed that TPE

c·.
... , 27 1h, 2014 could complete Unit# 1 by December, 2016
(

Page 37 of 150
(

provided NTPC increases the contract price to

the tune of USb 248,000,000/ (US Dollar
Two Hundred Forty Eight Million:. only) by way
of additional finance.

November NTPC, vide letter of date replied to TPE's

28 th , 2014 aforementioned letter whereby:

• NTPC rejected the demand for increase

1n the contract pnce . by way of
(. additional financing as sought by TPE
·.·
( ./ and reiterated that NTPC would make
payments only as per the terms of the
Contracts.
• NTPC further asked TPE to resubmit a
revised schedule for consideration by
NTPC, which would be designed to
achieve commissioning of Unit # 1 by
December, 2015, Unit# 2 by June, 2016
and Unit # 3 by January, 2017, with
( ·,,
'-.·,
TPE's own funding.

December TPE, vide its letter of date, addressed to the

10 th , 2014 Hon 'ble Minister of Power (which was
C subsequently forwarded to NTPC) reiterated
,·
t. .

Page 38 of 150
'<.
its demand for increase in the contract price !

to the tune of USD 248,000,000/- (US Dollar

I~--
Two Hundred Forty Eight Million only) by way
\,; .. '
of additional finance.

(;
December' NTPC during its 415 th Board of Directors
23 rd , 2014 meeting held on date decided, in principle, to
terminate the Contracts with TPE.

,_( --..
{ .
... .·.

December NTPC, vide its letter of date, served notice of

r·.
24 th , 2014 default to TPE 1n accordance with Clause
(....·..
42.2.2(c) of the GCC .

December NTPC encashed all the bank guarantees of

24 th -27 th , TPE and its DJU Associates amounting to
2014 USD 123,093,851.42/- (US Dollar One
Hundred Twenty Three Million Ninety Three

,:
Thousands Eight Hundred Fifty One and
\ . .-'
Forty Two Cents only) and INR 670,861,773/-
(Rupees Six Hundred Seventy Million Eight
Hundred Sixty One Thousand Seven Hundred
(.• Seventy Three only).

\.. ·. Page 39 of 150

 December TPE, vide its letters dated December 25th,
29 th - 30 th , 2014 and December 26 th , 2014, sought for
2014 meetings during which senior representatives
of TPE were supposed to present a plan for
(:·
the execution of the Contracts without NTPC
having to pay the increase in the contract
price of USD 248,000,000/- (US Dollar Two
Hundred Forty Eight Million only) as was
being demanded by TPE. However, during the
(
\.
said discussions, no such plan was presented
by TPE.

,,
( " ',

December TPE replied to the notice of default vide letter

\.' - ..
30 th , 2014 of date wherein it made vague proposals
conditional on NTPC revoking its encashment
of the bank guarantees.

c··:.,
'-··· January NTPC, vide letter of date, communicated to
7th, 2015 TPE that:

• During the discussions on December

C 29th, 2014 & December 30th, 2014, TPE
,.'

Page 40 of 150
[ -

did not · present any concrete plan

regarding execution and financial
arrangements for balance works.
• NTPC had already encashed the bank
guarantees and the same could not be
,._-7'.,
\_ ,: reversed/ revoked.

January NTPC, vide its letter of date terminated the

14 th , 2015 Contracts with TPE 1n accordance 1 with
( Clause 42.2.2 of the GCC, with immediate
effect.

(.
\
---,_
( _, July 15 th , TPE, 1n its letter of date, sought mutual

( 2015 consultation 1n terms Clause 6.1.1 of the

GCC for the purposes of resolving the
disputes between NTPC and TPE arising from
the alleged wrongful invocation of the bank
r ··_
\ .. guarantees and wrongful termination of the
I -- ,
\...:,
Contracts by NTPC.

(;') August NTPC, vide letter of the date, agreed to hold

c- ~
11th 2015 mutual consultation meetings with TPE at
New Delhi on mutually acceptable dates.
(;
(:'-,

(_
,.-.. Page 41 of 150
 September NTPC, vide letter of date, forwarded its
,. 11 th , 2015 convenient dates i.e., September 22 nd , 23 rd
\ .·'

and 24 th 2015 {three dates) for holding the

1
~:,-.'-:
mutual consultation meetings seeking
confirmation of TPE.

(,··:_
September TPE confirms the dates i.e., September 22 nd ,
c:/~:
16 th , 2015 23 rd and 24 th , 2015 (three dates) for holding
the mutual consultation meetings, as
forwarded by NTPC.

September The mutual consultation could not be held

22 nd - 23 rd , because TPE failed to turn up for the same.
2015

\". '•

September TPE came for mutual Consultation meeting

\.: 24 th , 2015 without its Director General as despite
c· confirmation vide letter dated September 16 th ,
'-·'
2015. Mutual consultation meeting between
NTPC and TPE could be held only for three (3)
hours due to paucity of time.
(
\. _;,
..

I
'· . Page 42 of 150
r -

October- Exchange of communications and mutual

•"
\j.:' December, consultation between NTPC and TPE.
2015

December TPE invoked Clause 6.1.1 of the GCC seeking

23 rd , 2015 appointment of Adjudicator, however contrary
to the said provision of GCC, TPE sought the
said appointment to be done jointly by NTPC
(
and TPE. The said provisions authorises CMD
( of NTPC to appoint an Adjudicator.

February CMD, NTPC appointed Justice {Retd.)

(".
'· . 19 th , 2016 Sadanand Mukherjee as the Adjudicator for
settlement of disputes between NTPC and
TPE.

February Justice (Retd.) Sadanand Mukherjee accepted

26 th , 2016 his appointment as an Adjudicator.
(·..j

April - Adjudication proceedings held in New Delhi

May, 2016 before the Ld. Adjudicator Justice {Retd.)
Sadanand Mukherjee.

( Page 43 of 150
 May 17 th , NTPC vide letter of date communicated to TPE
2016 about the accident that occurred on May 13th,

2016 during the dismantling of gantry crane

being carried out by TPE's subcontractor M/ s
Sukesh which resulted in serious injury to
one personnel and also damaged the steam
generator materials in the adjacent area.

\ .

~ .. •
May 20 th , Ld. Adjudicator decided the dispute/ claim of
2016 the Parties vide decision dated May 20 th ,
2016.

( The decision of the Ld. Adjudicator could be

( summarized as under:
'
» The validity of invocation and
encashment of bank guarantees cannot
be questioned and the same is according
to the terms of clauses of relevant
(_, Contracts. The encashmen t of barik
@~ guarantees 1s valid subject to
(; assessment of the computation of the
V

quantum of the amount involved.

(J
(

( Page 44 of 150
 > Termination of Contracts under the
clauses of Contracts as referred to under
Clause 42.2.2(c) of the GCC is valid.

:,. Claim and counter-claim have not been

discussed in this proceeding, on behalf
of the parties in course of hearing, claim
and counter- claim have not been taken
up.

> The parties shall follow the terms of

( Contracts under Clause 42.2.3 of the
GCC relating to the consequences
\.;
termination and the reconciliation
r·>
\._,·
process shall not stand in the way of
complying v.rith the provisions of
Contracts as above.

> Liabilities of either of the parties are not

being decided 1n the absence of
evidence.
> Reconciliation of equipments, packages
and other items, if still in dispute and
not yet complete may be sorted out by
joint exercise of reconciliation.
( '',

(
Page 45 of I 50
 May 25th, TPE expressed its .dissatisfaction with regard
2016 to the decision of the Adjudicator and

t:':"::'.";,
conveyed its intention to commence
\ ·-'
Arbitration for resolution of disputes under
r
(:}
Clause 6.2 of the GCC.

September TPE, accordingly, appointed Hon'ble Mr.

2 nd 2016 Justice (Retd.) Deepak Verma as an
'
Arbitrator on their behalf under Clause 6.2.4
of the GCC.

October NTPC appointed Hon'ble Dr. Justice (Retd.)

13 th , 2016 Arijit Pasayat as an Arbitrator on their behalf
under Clause 6.2.4 of the GCC.

November Further, both the Arbitrators appointed

11 th , 2016 respectively by TPE and NTPC, nominated
Hon'Justice (Retd.) R. C. Lahoti, Former Chief
Justice of India, as third (Presiding) Arbitrator
who vide letter of date accepted the aforesaid
(;

Page 46 of 150
 nomination.

Vide the letter of date, the Hon'ble Presiding

Arbitrator fixed January 7 1h, 2017 for the
preliminary hearing -at New Delhi and also
directed TPE to file its Statement of Claim on
or before January 7th, 201 7.

January First sitting of the Arbitration was held

7 th 2017 wherein NTPC was directed to file its counter-
i: .
claims and reply to the Statement of claim
filed by TPE by February 7th, 2017.
·"'\,,·-...

c:
c···

r·,
\...

( >.

Page 47 of 150
{ BEFORE THE ARBITRAL TRIBUNAL COMPRISING
OF

HON'BLE MR. CHIEF JUSTICE R. C. LAHOTI, .

HON'BLE DR. JUSTICE ARIJIT PASAYAT &

HON'BLE MR. JUSTICE DEEPAK VERMA

(1
< •.

(Former Judges of the Supreme Court of India)

IN THE MATTER OF:

I
\ .. JSC "VO "TECHNOPROMEXPORT" .... CLAIMANT

f' . ' Versus

(
NTPC LIMITED
.,
( ....·
.... COUNTER-CLAIMANT /RESPONDENT
( ·,, :

STATEMENT OF FACTS SUPPORTING THE

COUNTER-CLAIM

MOST RESPECTFULLY SHOWETH:

()
l, The Counter-Claimant herein respectfully submits

() as under:
l, 1 NTPC having its office at the address
('.
mentioned above in the Memo of Parties is a
(

Page 48 of 150
 public sector undertaking incorporated under
the Companies Act, 1956 engaged in the
.
business of generation of electricity and it has
been conferred a Maharatna status by the
Government of India. NTPC 1s being
represented herein through Mr. Kameshwar
Jha, Additional General Manager (Mechanical
Erection), Barh STPP, NTPC Limited.

, -:-~.
\ ..
' 1.2 The Claimant, as represented to NTPC, is, an
( engineering, procurement and construction
company incorporated in Russia.

(.;
1.3 Brief facts, in the background of the present
(,; dispute and submissions of NTPC, are as
(i under:

1.3.1 The present dispute is in relation to

Barh STPP Stage-I. Barh STPP is a
project of national importance and has
(: been awarded Mega Power Project
status by Government of India. The
project was conceived as an inter-

.
regional power project to meet the
prerequisites of northern region,
(

Page 49 of 150
( western region and home state of Bihar ·
{'' subject to final allocation by
l '

Government of India. The project has

overall capacity of 3300 :MW (5X660
MW) and was divided into two stages:
,·
( : Barh STPP Stage I (3X660 MW) and
Barh STPP Stage II (2X660 MW). Barh
STPP Stage I was initially planned to
be commissioned during the 11 th plan
period (prior to March, 2011) and its
( . timely completion was essential for
relief to the immense deficiency in
power supply, which was being faced by
India in general and Bihar in particular.
C However, at present time, Barh STPP
C Stage - I is still twenty three (23)
months away from completion as on
January }st , 2017 (a delay of around
106 months from the initially arranged
(
'· . and agreed date of completion i.e.
( i January, 2010). It may not be out of
(g place to highlight in respect of Barh
STPP Stage - II that the work for Main
C
Plant Steam Generator and Turbine
f .•
\:._ ,'
Generator was awarded to BHEL in
(1

Page 50 ofl 50
!'. ,.·

October, 2008, under ICB procedures

(i.e. approximately 42 months after
award of Contracts for Stage - I to TPE
()
in March, 2005) and both the units of
(" Barh STPP Stage - II have now been
(1 commissioned and are operating
successfully.

1.3.2. That in the year 2003, NTPC invited

bids for the Main Plant Package Part-A
(Steam Generator and Auxiliaries),
Barh STPP Stage-I, under ICB
procedures with funding from External
(J
Commercial Borrowings, internal and
C~l, other sources. Based on the aforesaid
(' invitation for bids, three (3) parties
namely BHEL, Doosan and TPE
submitted their bids.

1.3.3 In order to meet the qualifying

requirements, TPE submitted its bid
. along with collaborators/ associates
r, namely TKZ, (a Steam Generator
~
.../ '
manufacturer), TEP & ZEP (Architect
(5
engineering firms) and also furnished
(

Page 51 of 150
 DJU's duly executed between TPE and
each of the aforementioned
collaborators/ associates referred to as
DJU Associates.

1.3.4 After evaluation· of TPE's bid and

discussions in connection thereto, the
Contracts for the Main Plant Package
Part-A (Steam Generator and
Auxiliaries) for Barh STPP Stage - I was
awarded to TPE since TPE fulfilled the
f -· qualifying requirements as detailed in
'
the ITB and other bid documents and
i :.,
l
their evaluated prices were lower than
C the other two bidders namely, BHEL
(''
' .
and Doosan. It is pertinent to mention
that the award of Contracts to TPE was
strictly through ICB route.

I~'.:_
1.3.5 That Contracts between NTPC and TPE
were trifurcated as under:

a) "First Contract" vide NoA No. CS-

9558-102-2-FC-NOA-4520 dated
March 14 th , 2005 and Contract no.

Page 52 of 150
f.< CS-9558-102-2-FC-COA-4520 dated

('
March 25 th , 2005 was signed between
\ '
the parties (NTPC and TPE) for
'Supply of Plant & Equipment
including mandatory spares (procured
() from outside India)' on CIF basis at a
contract price of USD 391,121,452/-
(US Dollar Three Hundred Ninety One
Million One Hundred Twenty One
Thousand Four Hundred and Fifty
Two only). The contract pnce was,

(
subsequently, amended to USD
',
388,910,673/-(US Dollar Three
(" Hundred Eighty Eight Million Nine
(i Hundred Ten Thousand Six Hundred
() and Seventy Three only) after deletion

(;, of auxiliary boiler including all

structures, platforms, gratings etc.
from the scope of the First Contract
(·:·
\,,.
vide Amendment No. 3 dated
() September 15th, 2007. The contract

€) price was further amended to USD

388,907,009/- (US Dollar Three
(l
Hundred Eighty Eight Million Nine
(.'
Hundred Seven Thousand and Nine
(

Page 53 of 150
(·
',

I .
' ..
only) after deletion of Ocean Freight
and Marine Insurance {OF&MI) of
matching pieces (TUBE TRANSITION
PIECES) to be welded on turbine and
associated equipment vide
Amendment. No. 6 dated June 18 th ,
2009.

b) "Second Contract" vide NoA No. CS-

9558-102-2-SC-LOA-452 l dated
March 14 th , 2005 and Contract no.

(
CS-9558-102-2-SC-COA-4521 dated
March 25 th , 2005 was signed between
{ .
"·-·'
the parties (NTPC and TPE), for the
'Supply of Plant and Equipment
including mandatory spares (procured
within India)' on ex-works basis at a
contract price of INR 686,993,784/-
(Rupees Six Hundred Eighty Six
Million Nine Hundred Ninety Three
( ..}
"-"· Thousand Seven Hundred and Eighty
@) Four only). The contract price was
amended to INR 772,570,796/-
(Rupees Seven Hundred Seventy Two
{ ·.
\,. __ ..,:
Million Five Hundred Seventy

(. .. Page 54 of 150
( Thousand Seven Hundred and. Ninety
Six only) after inclusion of supply of
auxiliary boiler including all
c· .
( .•. '

structures, platforms, gratings etc. in

the scope of the Second Contract vide
Amendment No. 03 dated September
15 th , 2007.

c) "Third Contract" vide NoA No. CS-

9558-102-2-TC-LOA-4522 dated
March 14 th , 2005 and Contract no.
CS-9558-102-2-TC-COA-4522, dated
March 25 th , 2005 was signed between
( '

the parties (NTPC and TPE), for

() 'Providing all services 1.e. port
() handling and clearance for the
imported goods, inland transportation
& insurance, installation, testing &
commissioning' at a contract price of
USD 2,818,288/- (US Dollar Two
(_i
Million Eight Hundred Eighteen
(t) Thousand Two Hundred and Eighty
(·· Eight only) + INR 2,034,351,463/-
(Rupees Two Billion Thirty Four
('
Million Three Hundred Fifty One
( .·'

Page 55 of ISO
{ Thousand Four Hundred and Sixty
,' "I .
Three only). The aforesaid contract
\, _.·:

pnce for the Third Contract was

(
l
amended to USD 2,818,288/- (US
Dollar Two Million Eight Hundred
Eighteen Thousand Two Hundred and
Eighty Eight only) + INR
2,034,288,297 /- (Rupees Two Billion
,Thirty Four Million Two Hundred
Eighty Eight Thousand Two Hundred
and Ninety Seven only}, respectively
on account of the deletion of local
transportation including port
\,
clearance and port charges and
C inland insurance (F&l) of matching
C pieces (TUBE TRANSITION PIECES) to

(. be welded on Turbine and associated

equipment (for MS and HRH system)
vide Amendment No. 04 dated June
18 th , 2009 from the scope of work
originally included under the Third
Contract.

(·
(
' .. That the Contracts inter alia included a

( common provision of 'Cross Fall breach'

Page 56 of 150
(-,

( '
1n Clause 3.1 of their respective NoA.
,.··
' ' The said Clause 3.1 provided that any
'
breach under . any of the three (3)
contracts 1.e. First Contract, Second
Contract or Third Contract shall
(
'· automatically be deemed as a breach of
the other two (2) contracts and shall
give NTPC a right to terminate all the
Contracts and/ or recover damages
thereunder.
i.

1.3.6 That work under the Contracts had to

(,
'...
commenced simultaneously and
c. Completion of Facilities of the three (3)

C units (Unit # 1, Unit # 2 & Unit # 3) of

660 MW each was to be achieved as per
the following scheduled dates:

Period from the Notification

() Units of Award to complete the
C::, units
( Unit# 1 46 months i.e. January, 2009

( Unit# 2 52 months i.e. July, 2009

Unit# 3 58 months i.e. January, 2010
(

Page 57 of 150
(

1.3.7 That within a year of the award of the

Contracts and during the
subsistence/ continuation thereof, TPE,
vide its letter dated February 21 st,
2006, informed NTPC that allegedly by
resolution of Government of Russian
Federation dated August 15 th , 2003, the
Federal State Unitary enterprise Foreign
C Economic Association
c· 'Technopromexport' had been
transformed to the open type Joint
Stock Company Foreign Economic
Association 'Technopromexport' on
February 7 th , 2006. TPE, however, did
not supply any documents, in support
of the aforesaid alleged developments,
to NTPC. . It is submitted that NTPC
requested TPE to provide a copy of
relevant federal laws. Pursuant to
(
NTPC's request, TPE submitted the

Page 58 of 150
 relevant statute and certificate of

( l
registration. It is submitted that the
documents, so furnished by TPE, could
not clarify NTPC's doubts regarding the
change in legal status of TPE and its
(,.. repercussions on the Contracts and
therefore, NTPC requested for a legal
op1n10n from a Russian law firm
regarding validity of such
transformation and succession to the
Contracts. It is stated that TPE declined
...
:,,~ .
to the proposal for legal opinion stating
that no law firm could get access to all
the internal documents related to
transformation of TPE. It submitted
that it is only after the intervention at
the Government level TPE agreed to
cooperate with the Russian law firm
appointed by NTPC and provided the
requisite documents to such law firm to
enable them to render the legal oi:iinion
sought by NTPC.

1.3.8 Meanwhile, taking advantage of the

delays caused by its own inflexible and

Page 59 of 150
 uncooperative approach, TPE, vide its
letter dated August 2 nd , 2006, served
upon NTPC the notice to reduce the
'i...:-,;,.:
rate of progress under Clause 41.2 (b)
of the GCC stating that TPE was unable
to perform its contractual obligations.

1.3.9 That TPE, with the intentions of

further delaying the work and not to
complete the work, served upon NTPC
,_
( .j
the notice of suspension of work under

'\. the Contracts from January 1st, 2007,

( under Clause 41.2 (b) of the GCC. TPE
\ .
alleged that NTPC was delaying in the
(~.-
signing of addendums to the Contracts
(· arising out the circumstances of change
in legal status of TPE. It is matter of
undisputed facts, as stated in preceding
para, that the situation had arises
entirely due to the change of legal
(_,
status of TPE and NTPC could not have
Cfu accepted the change unless a valid legal
,·-.
t.. ___,.,: opinion in this regard was obtained. It
("\ is submitted that NTPC, vide its letter
~_:_ -·
dated December 22 nd , 2006, issued the
(

\ Page 60 of 150
 necessary Amendment No. 2 to the
Contracts based on input received from
the Russian law firm. TPE, vide its
letter dated December 26th, 2006,
amongst other grounds refused to
accept the Clause 3 of Amendment No.
02 which read as follows:

Clause 3: "The parties hereto

acknowledge and agree that neither
party hereto shall be liable to the other
in any manner whatsoever in respect
of any matter arising out of or relating
to the recognition of the Company as
successor to FGUP by NTPC from the
date it arose till the date hereof and
each party accordingly releases the
other from any claims or liabilities on
account thereof'

1.3.10 TPE also raised the issue that

completion dates for the respective
units as per the Contracts could not
be met. It is pertinent to re-iterate that
it was due to reasons entirely
C

. i Page 61 of 150
\. .
attributable to TPE that the execution
of the amendments was delayed.

1.3.11 That TPE made unjustified demands

for inclusion of conditions with regard
to time extension and also sought
removal of· existing price variation
ceiling of 20% in the Amendment No.
2 forwarded by NTPC. NTPC, vide its
letter dated February 24 th , 2007,
categorically refused to accept the
unjustified and untenable demands of
TPE as TPE has been camouflaging its
C
own deficiencies, defaults and
(, breaches under the Contracts by

C making such demands. Further, NTPC

requested TPE to resume the work
immediately without any further
delay. During meetings between TPE
and NTPC held on January 24th, 2007
c, and .March 5 th , 2007, TPE expressed,

(~! its inability to execute the Contracts

c., as per the original terms and

conditions for the Contracts. NTPC
clarified that no changes could be

Page 62 of 150
 made to the Contracts at that stage
and again TPE requested to resume
the work without any further delay
and sign the Amendment No. 2. NTPC,
vide its letter dated April 4 th , 2007,
directed TPE to resume work within
fourteen (14) days failing which NTPC
may take action against TPE under
the Contracts including "Completion
of Facilities" by itself or by employing
t· any third party at . the cost and
expense of TPE.
(.

C
1.3.12 That on April 20 th , 2007, TPE signed
the revised Amendment No. 2 issued
by NTPC after deletion of clause 3 and
the parties agreed that the changed
entity 1.e., Joint Stock Company
r"- - "Foreign Economic Association
\

"Technopromexport" shall be deemed

c. to be the party in place of FGUP and
(0 the name of the FGUP i.e. Federal
(.c State Unitary Enterprise "Foreign

( Economic Association
"Technopromexport" wherever
(

Page 63 of 150
i.

( .
appearing in the text of the Contracts
was substituted by the name of the
company i.e. Joint Stock Company
·"Foreign Economic Association
"Technopromexport".

1.3.13 That in view of persistent delay on

part of TPE in execution of work under
the Contracts, a meeting was held
between NTPC and TPE on September
( 19 th , 2007, in Moscow, Russia. During
the said meeting, TPE failed to make
commitments regarding
commencement of erection work and
ordering of the balance critical items.
It is pertinent to note that as per the
time schedule TPE was under a
contractual obligation to start the
boiler erection by March, 2006. As per
discussions held on November
c, 20th-21 st , 2007, NTPC requested TPE
to commence boiler erection for Unit#
.. 1 and to finalize the order for balance
( "'
.

BOis expeditiously. NTPC, vide its

(;
letters dated February 8 th , 2008, April
( ..

Page 64 of 150
(

22 nd , 2008, July 22 nd , 2008, August

25 th , 2008, reiterated the breaches
committed by TPE and non-adherence
to the cantractual terms inter alia
delay in ordering of BOis, .delay in
commencement of boiler erection,
non-finalization of erection sub-
contractor.

1.3.14 That it is pertinent to note that due to

the aforementioned breaches on the

(.•· part of TPE, the execution of works

(_.. under the Contracts were delayed by

nearly two (2) years. The scheduled
time for commencement of erection
c, activities was March, 2006 which TPE
failed to achieve. In the meantime,
NTPC had invited bids and awarded
contracts for Barh STPP Stage-II.
Since the area allotted to TPE for pre-
assembly and storage fell in the Main
Plant area of Barh STPP Stage-II
where civil works were to commence,
NTPC, vide its letters dated February
8'h, 2008, requested TPE to evacuate
(

Page 65 of 150
(.'

( the pre-assembly and storage yard.

· NTPC, vide its letter dated February
22 nd , 2008, had assured TPE that
shifting/ relocation was planned in
such a manner that there would be no
disruption of erection activities.
However, shifting/ relocation of
pre assembly/ storage area were
dependent on commencement of
erection work by TPE. It is stated
(
I
that NTPC, vide its letter dated
February 26 th , 2008, submitted a plan
regarding relocation/ shifting along
with the target dates. NTPC, vide its
letter dated April 9 th , 2008, reminded
(,
,._ . TPE that commencement of boiler
erection was very critical for execution
of shifting of pre-assembly and storage
area. In view of the above, TPE was
requested to depute its representative
(,: to carry out preliminary discussions

() regarding the modality for shifting of

('i
pre-assembly and storage area. TPE
\:/

was further requested to award

(, . .,.
erection Contracts and start pre-

Page 66 of 150
i.
1.

assembly/ erection works. On July

22 nd , 2008, NTPC informed TPE that
(
approximately 15,000 MT received at
site till date was lying idle as erection
was yet to be commenced as result of
which the activities pertaining to Barh
STPP Stage-II scheduled to start from
July/ August . 2008, was getting
adversely affected. NTrc, vide its
letters dated August 30 th , 2008, and
September 3 rd , 2008, directed TPE to
('. shift all the materials from the pre-
'\ .. ;

assembly and storage area latest by

( ';,,
September 6 th , 2008, failing which
NTPC shall
•'
evacuate the said area.
NTPC, vide its letter datecl September
9th, 2008, expressed that NTPC does
not agree with TPE's contention that
TPE will bear no responsibility for
safety and technical guarantees of the
C equipment after shifting of the
E) materials.

()
1.3.15 That the stand of TPE, as mentioned
('c
in the preceding paras, was contrary
I

I .• Page 67 of 150
(..... '·

C to the Contracts between parties and

/'":, was extremely non-cooperative.
\.
Frustrated by TPE's inaction and
C irresponsible approach, NTPC vide
C letter dated September 9th 2008,
'
(! communicated to TPE that in the
event TPE fails to commence Unit # 1
boiler erection by September 23rd,
2008, NTPC will have to raise a
dispute as per the provisions of the
Contracts. Unwilling to abide by its
contractual obligations, TPE
(,
(0·,·, demanded appointment of Adjudicator
vide its letter dated September 22nd,
() 2008.
c:.C

1.3.16 That Justice (Retd.) Anil Dev Singh

was appointed as the Adjudicator and
the Adjudication proceedings were
accordingly held during the months
("\ of October and November, 2008. It is
Qt stated that both the parties 1.e., TPE
('. and NTPC participated 1n the
adjudication proceedings and the

Page 68 of 150
 Adjudicator was pleased to pass a
decision dated November 28th, 2008.

1.3.17 That the final decision dated

November 28 th , 2008, as passed by the
',
( ' Adjudicator could be summarized
hereunder:

>' NTPC was justified in raising the

issue of validity of the
transformation of TPE and its
succession to the rights and
{
obligations under the Contracts.
(
Further, NTPC was justified in
(; seeking documents and information
(. regarding the said transformation
'
(.:_;:.:
and did not act unreasonably 1n
seeking legal opinion.
>' Both the parties have been
responsible for infringing the time
imperatives.
>' It is not possible to quantify the
proportion in which the parties
have contributed to the delays .

.•

''

Page 69 of 150
(

> An attempt needs to be made to

resolve the problem by an attitude
of give and take.

1.3.18 That in view of the award dated

. November 28 th , 2008 passed by the
Adjudicator, NTPC and TPE held

,-"·
several rounds of discussions during
1{\
December, 2008, till March, 2009, 1n
India and Russia· to work out a
mutually accepted solution. However,
r, all such discussions remained
\ "·
stalemated due to the obstinate
()
approach adopted by TPE. NTPC, vide
"
(; its letter dated January 22°d, 2009,
(':
". categorically mentioned that TPE had
failed to submit its revised proposal of
time extension and/ or cost
compensation for consideration of
NTPC in accordance with the award
(:; dated November 28 th , 2008 passed by
(j(J; the Adjudicator.

(
1.3.19 lt is stated that neither TPE nor NTPC
challenged the decision dated
(

Page 70 of 150
( ..

November 28 th , 2008 passed by the

Adjudicator within the stipulated time
or otherwise and thus the same
attained finality as per the Contracts.

'
1.3.20 That the stalemate situation between
TPE and NTPC was further
compounded when NTPC received a
communication from the CBI dated
June 30th 2009. The said
'
communication from CBI stated that
TPE had appointed an agent namely

(,, M/ s Ravina & Associates Pvt. Ltd.

vide a duly signed agreement on
c. October 25 th , 2004 {i.e. prior to bid
(':
< .. submission date) in relation to the
Bids to be submitted by TPE. It is
pertinent to mention that TPE was
contractually obliged to disclose any
l
' such appointment of agent(s) to NTPC
at the time of bid submission. It is
submitted that non-discloser of the

c: aforesaid information to NTPC was a

clear violation of the bidding terms i.e.
if a foreign bidder has engaged an

( Page 71 of 150
'' -
Indian agent, the bidder was required
to declare in its bid, the de_tails about
name and address of the local agent,
,::~-.
~9
the services to be rendered by such
agent and the amount of
remuneration for the agent included in
the Bid Price (as defined in the 1TB).
Such information was required to be
furnished in the format of Attachment
8 to the bid form which ,vas mandated
( under Clause 8.3 (h) of Section-II (1TB)
of the bidding documents. TPE in
(
Attachment 8 to the bid form wrote
r.... ·
"NOT . APPLICABLE" across the
(_' Attachment which IS a dear
suppression of fact, as disclosed from
the aforesaid communication received
from CBI and thus also amounts to
misrepresentation. Further, CBI also
conveyed that investigation of the case
had revealed that TPE had paid illegal
commission to the tune of USD
22,334,530.73/- (US Dollar Twenty
Two Million Three Hundred Thirty
()
Four Thousand Five Hundred Thirty

Page 72 of 150
( and Seventy Three Cents only) to the
said agent M/s Ravina & Associates

, . Pvt. Limited. Based on the foregoing,

l;.'.)
the CBI urged NTPC to initiate
suitable action against TPE as per the
tender and contract conditions.

1.3.21 Based on the communication from the

CBI as aforesaid, NTPC sought legal
opinion regarding proper course of

C action in the matter. The legal opinion

thus obtained by NTPC was forwarded
(
to Ministry of Power along with its
(
recommendation inter alia stating that
( :. :." "keeping 1n view the facts and
circumstances mentioned m NTPC's
earlier brief and the legal op1n1on
obtained by NTPC there appeared to
be no other alternative but to
terminate the Contracts and get the
C Contracts completed at the cost and
expenses of TPE."
,·
(.\,._.,; ·'
1.3.22 That, a meeting was held on March
("•
·...
12th, 2010, chaired by Hon'ble
(
'·

Page 73 of 150
c-.-

Minister of Power and attended by

Secretary (Power), Special Secretary
(Power) and Director (Thermal) from
Ministry of Power/Government of
(1 India, CMD, Director(Fin.), ED (CC&M)
( ... , and GM (CS) from NTPC and Mr.
''
Sergey V. Chemezov, General Director,
State Corporation, Russian
Technologies, Mr. Alexander A. Lukin,
(. General Director, TPE, Mr. A
(._:.,··, Schegolev, Director of representation
f'·
\ .
of TPE in India from TPE. It is stated
that the following were discussed &
(~
agreed during the said meeting:
C)
>- Revised L2 schedule shall be worked
1' .- -:
:.:.:~:.."
out jointly and agreed between NTPC
and TPE.

(.:-
'·
>- Price variation shall be calculated
( as per . revised contract schedule
and contract formula and as per
indices provided in the Contracts
since 2005.
(,

(
\
Page 74 of 150
1.

( - ;, Price variation ceiling of 20% shall

,~ - - be removed from First Contract.
'; ..

;, ErectiDn will start within a month

from March 12 th , 2010.
Based on the above both parties to
work out detailed action plan for
implementation.

{ ,

' .
1.3.23 That referring to the record of
{ ·.
"' ., abovementioned discussions held on
March 12 th , 2010, the Ministry of
~··, Power, vide letter dated May 28th,
l ..
.; '

·.·, 2010, forwarded the decision of CCI

( ,

which inter alia included as under,

"NTPC may carry on with the Contracts

with TPE in Barh STPP Stage I
notwithstanding CBI's advisory to
NTPC for civil action against TPE as per·
(:
tender conditions and the Contracts.
() However, CBI is to continue with the
I
l) investigation of corruption/ criminal
part of the case."

Page 75 of 150
 1.3.24 Accordingly, issues between NTPC and
( . TPE were discussed during June -
\.

August, 2010. It is submitted that on

the basis of the mutual understanding
arrived at between TPE and NTPC, the
( ;"". ' amendments to the Contracts 1.e.
Amendment No. 07 to First Contract,
Amendment No. 05 to Second
Contract and Amendment No. 05 to
Third Contract, all dated October 29 th ,
('• 2010, were agreed to and duly signed

( by both the parties.

(;
1.3.25 That as per aforesaid amendments to
C> the Contracts, the schedule for the
Completion of Facilities were revised
as under:

(·,
.
'-....: .·

Page 76 of 150
 Units Original schedule Revised Schedule
for completion ol for the completion!
the facilities of the facilities
---·
Unit # January, 2009 · October, 2013
c·'·>.
l ..
.. · 1
Unit #I July, 2009 April, 2014
2
I
# January, 2010
i
Unit · October, 2014

C,.
3
I

Further, as per the amendments, 20%

ceiling on price adjustment on FOB price
for plant and equipment was removed in
1 the First Contract. Further, NTPC and
( TPE had no outstanding claim on each
'·

other as on the date of aforesaid

amendments i.e., October 29 th , 2010. It
is pertinent to mention that NTPC paid
an additional sum of approx. USD
60,000,000 /- (US Dollar Sixty Million
only) as additional price adjustment to
TPE till termination of the Contracts 1n
January, 2015.

(. Page 77 of 150
,,-"".

1.3.26 That 1n view of the aforesaid

(·
amendments, TPE was again under
contractual obligation to resume
works under the Contracts and meet
the revised schedules. However, TPE
( again lagged behind in achieving the
interim milestones even as per the
reviseq schedules as per mutual
agreement. The following table clearly
f
\.,: shows the delays on the part of TPE
( even as per the revised schedules.

i Activity Amended Status

(. Schedule
I
Mobilization of • Was to be Actually
erection i achieved by mobilized on
sub-contractor December 14 1h, February 10th,
2010 2011; delay of
about two (2)
months.

(.. ,_-. Commencement Commencement Commenced on

of boiler erection by December March 17th,
of Unit# 1 30th 2010 2011; delay of
'
over two and a
(,, half (2.5)
months. Only
\

( Page 78 of 150
 20,946.2 MT
out of the
'.J
49,172 MT (Le.
42.6%) ·was i

erected till the

date of
termination i.e.
January 14th,
2015.

Commencement Commencement Commenced on

of boiler erection by June 30th, July 29th 2011;
of Unit# 2 2011 delay of one (1)
.
,.
"·- '
'
month. Only
17474 MT out of
47500 MT (i.e.
38.2%) has been
,r, .
.. ., .
erected till date
of termination
i.e. January
141h, 2015.

Commencement ' Commencement Commenced on

of boiler erection by December January 25 th ,
of Unit# 3 30th, 2011 2012; delay of
over nearly one
(1) month. Only
7,979 MT out of

('
Page 79 of 150
 I the 45563.4 ~
• {i.e. 17.5%) was I
erected till the
date of
termination i.e.
January 14 th ,
2015.

i Completion of Was to be Orders for many

i ordering of BOls completed by major BOls
for all three (3) I May 28,h, 2011 were yet to qe
units (of 660 MW
c· placed as on the
each) date of
C termination i.e.
( January 14 th ,
c, 2015.
..•
Completion of Was to be ! Not completed
engineering for completed by • till date of
all three (3) units January 28th, termination i.e.
(of 660 MW each) 2012 January 14'h,
2015.

Boiler hydraulic Was to be Not completed

test for Unit # 1 carried out by • till date of
tTt
September 27th, termination i.e.
(t~-·
2012 January 14th,
(I 2015.
\ ..

Page 80 of 150
 Boiler light-up & Was to be Not completed
alkali boil out carried out by till date of
(
completion for· January 28th, termination i.e.
Unit# 1 2013 January 14th ,
2015.

(· Steam blowing Was to be 1

Not completed
completion for • carried out by till date of
Unit# l \ April 28th, 2013 termination i.e.
January 14ili,
2015.

I
' Synchronisation Was to be • Not completed
and coal firing carried out by till date of
(." - : .
for Unit# 1 June 29 th , 2013 termination i.e.
(
January 14 th ,
,.
C 2015.
(.

1.3.27 That it is a matter of record that NTPC

was regularly following up with TPE
regarding the delays as stated in the
tabular chart in the preceding para
through various letters dated August
({}
8th 2011; August 26th 2011;
(,, ' '
November 16 th , 2011. At the onset of
2012, NTPC continued to vigorously
!· follow up with TPE in respect of delays

( '
Page 81 of 150
(

( 1n procurements of vanous critical

items which were causing inordinate
delays 1n Barh STPP Stage-I. It is
stated that several
tetters/communications were sent by
NTPC addressed to TPE highlighting
various issues relating to delays on
the part of TPE, which included letters
dated January 5 th , 2012; February 2nd,
2012; February 16th, 2012; March
15 th , 2012; March 29 th , 2012; April
10th, 2012; April 17ili, 2012; May 10th,
2012; May 16 th , 2012; July 9 th , 2012;
July 24 th , 2012.

1.3.28 That despite several letters,

communications and reminders from
NTPC as mentioned in the preceding
para, TPE failed to check the delays in
the execution of the Contracts and the
delays in Barh STPP Stage-I continued
to pile up. NTPC was constrained to
raise the issues pertaining to
(;
persistent delays 1n execution of
()
Contracts by TPE during the meetings
(.

( Page 82 of 150
f held between NTPC and TPE on July

..,' '
4 th , 2012, CRM held on August 30th,
'· 2012 and later during an apex level
meeting held on November 23rd & 26th,
2012. It is stated that NTPC, vide its
letter dated December 27 th , 2012,
amongst others, reminded TPE, again,
about various commitments made by
TPE during the meeting on July 4th,
( ..
,',.

2012 and requested for submission of

monthly progress reports on a regular
basis.

1.3.29 That during CRM held on January

(1 28 th , 2013, NTPC again urged TPE to
( expedite the execution of the
Contracts. It is stated that NTPC
also sent various letters including the
letters dated February 7 th , 2013, May
29th, 2013 June 6th, 2013, June 7 th ,
2013, June 12 th , 2013, July 3 rd , 2013
bringing to the notice of TPE, that the
inordinate delays 1n execution of
Contracts on the part of TPE and
(

Page 83 of 150
C iisted various critical issues including
but not limited to the following:

:ia, Engineering issues

:ia, Site issues

'",
( .,
'' }a, Delay in BOI ordering

:ia, Delay lil manufacturing of

equipments
( ''.·
:ia, Delay in supply / shipment of
,. '

( equipments and mandatory spare

parts

>- Delay Ill submission of

drawings/ documents

}a, Delay in erection activities

(
:ia, Non-submission of monthly
progress reports

1.3.30 That it is respectfully submitted that

despite NTPC's best efforts and
~21 relentless exhortations as mentioned
(, in the preceding para and despite
amendments to the original Contracts
(i
on mutually agreed terms, TPE
(: ..

Page 84 of 150
 continued to willfully and intentionally
neglect its contractual obligations
without any justification or cause.

('·\ 1.3.31 That during CRM held on July 8th-9th,

( '·.. 2013, TPE, for the first time, cited
financial problems being faced by
them as the main reason for delay in
execution of the Contracts and further
C stated that it would be able to arrange
c: sufficient funds to execute the
Contracts by fourth quarter of 2013
C•
and had accordingly submitted their
c. program for shipment/ ordering.
C
( 1.3.32 It is respectfully submitted that it is a
matter of record that TPE failed to
achieve the milestones towards
commencement/ completion of works
as initially agreed between parties at
(~ the time of the award of the Contracts.
ff) However, based on intervening events,

(, NTPC and TPE mutually agreed to a

revised L2 schedule pursuant to
(
amendments to the Contracts dated

Page 85 of 150
\ October 29th, 2010, which provided
fresh timelines to be adhered to by
TPE for various activities and
milestones to be achieved by TPE.
TPE, once ag8.111, showed . utter
disregard for its contractual
obligations which had been stipulated
based on mutual discussions and
agreement between NTPC and TPE.
c· NTPC, vide letter dated September 4 th ,
C 2013, categorically informed TPE that

( the timelines as per the· revised L2

schedule were not being adhered to in
( ·.···,,,
relation to the supply and works.

(' 1.3.33 That an apex level review meeting was

held between NTPC and TPE on
September 25 th , 2013, at Barb STPP
Stage I site. It is stated that during the
meeting, TPE committed to
(,; comm1ss1on Unit # 1 by September,
(} 2015, on best effort basis and
c, subsequent units at a gap of six (6)
months, respectively. Further, TPE
(."
also confirmed to resolve its financial
(.

Page 86 of 150
(' .

constraints by October, 2013, with its

own resources and additional funding
from the Government of Russian
e,:;
Federation. Apart from the above, TPE
(?' also gave various commitments,
interim milestones/ timelines during
the aforesaid apex level meeting and
accordingly, submitted their program
for ordering of B0Is vide their letter
dated October 10 th , 2013 and further

c re-confirmed these commitments in

., CRM dated November l•t, 2013, Based
(.. .:
on the commitments provided by TPE,
NTPC took an accommodative view of
the alleged financial condition of TPE
and in good faith and in the interest of
completion of a project of nationa:1
importance, NTPC proceeded allowed
TPE to continue with the
implementation of Barh STPP Stage-I.
C·
(a;j 1.3.34 It is submitted that TPE; again failed

(; to meet the aforesaid commitments

made to NTPC during meetings on
c·
September 25 th , 2013 and vide letter

Page 87 of 150
 ,·
'

dated October 10, 2013, with regard to

the ordering of BOis, supply of
material and resolution of financial
constraints, which categorically
establish persistent failure and willful
misconduct on the part of TPE.

1.3.35 That NTPC raised the issue/matter

relating to the delays in ordering of
BOis, supply of material/ equipment
C. on the part of TPE vide its letters
('· ..
\. _.·
dated November 11 th , 2013; November
29th 2013; December 5th 2013;
C ' '
December 16 th , 2013 and December
c: 17th, 2013.
C 1.3.36 lt is pertinent to highlight that by
December 2013, TPE stopped
shipment of equipment/ material and

I • :
nearly brought the installation work to
'· .
a standstill. In fact, TPE was not even
shipping the equipment/ material
which was ready for shipment and for
which MDCCs had been issued. It is a
matter of undisputed record that
c"'
'·· _:

NTPC had duly provided MDCCs in

( .·.

(, Page 88 of 150
(-·· relation to the shipment of Power
Cycle Piping (388 MT), NMEJ (450
\: .·
pieces), Pressure Parts (2,919 MT), Air
& Gas Ducts (1,516 MT), SG.
(\
'-· .. ' Structures (2,930 MT), Auxiliary Steel
Structure and Tanks (2,143 MT),
Valves from Velan, Germany (77 MT),
Valves from Samkwang (345 MT), APH
(;)
Supporting Structure (1,410 MT),
C Compensators for Flue & Air Gas
(• Ducts (448 MT), RC Feeders (434 MT)
which items were critical for taking up
('.
the erection work at Barh STPP Stage-
( ·,.-'
I site. Even the erection activities at
(°': site were brought to stand still due to
() non-sequential supply of material and
· approximately 45,950 MT of material
was lying idle at site. Further, it is a
matter of undisputed record that TPE
(.
had also not shipped the 3,387 MT of
() material for which letters of credit

€Tu were issued since November, 2013.

TPE also failed to order BOis during
(j
December, 2013-January, 2014 in
(j
disregard to its own commitments
('

Page 89 of 150
(

provide during apex level meeting

dated September 25 th , 2013 and vide
letter dated October 10 th , 2013. The
forgoing submissions clearly establish
wilful misconduct on the part of TPE.

1.3.37 That NTPC, vide its letters dated

January 20 th , 2014 and January 31 st ,
2014, further raised the issues of
C repeated and persistent breach of
( Contracts committed by TPE including
r·- but not limited to the failure on the
'- '
part of TPE to adhere to the sequential
supply schedule and to dispatch
c·, • materials in spite issuance of MDCCs
/ .
''\,...· and the failure on the part of TPE _to
resolve its financial problems.

1.3.38 That it is a matter of undisputed

record that NTPC, regularly raised the
c, matters related to delay in erection
it? schedule due to non-availability of
(.,.-: material vide various letters dated

( .,l-,_ February 13 th , 2014 and February

(
14 th , 2014 written to TPE.
'

Page 90 of 150
( _,
1.3.39 That a CRM was held between NTPC
and TPE between March 3rd - 5th
'
2014, in Moscow, Russia. It is stated
that during the meeting, TPE indicated
( that unless it receives financial
support of USD 570,000,000/- (US
Dollar Five Hundred Seventy Million
only) from the Government of Russian
Federation, the supply of balance
material and ordering of BOis would
,,,,. not be possible. It is pertinent to
()
.. , mention that financial problems faced
( ,'

by TPE was entirely its own and NTPC

c: was under no contractual obligation to
(:, resolve the said problem faced by TPE.
(j Moreover, it is the settled law that
commercial/ financial difficulty,
inconvenience or hardship cannot
provide justification for not complying
with the terms of the Contracts. In any
() event, NTPC had already shown a very

C·v accommodative approach towards the

alleged financial problem faced by
()
TPE.
(··.
'

( .' Page 9l ofl50

..
 1.3.40 That TPE vide its letter dated March
12 th , 2014, to NTPC stated that TPE
would be able to complete the
contractual obligations under the
Contracts only when it gets relevant
support (regarding ra.Is1ng of
additional finance) from the
Government of Russian Federation.
TPE further contended that the
( ..
Deputy Minister of Power of Russian
Federation had allegedly held a
meeting 1n this regard on February
25 th , 2014 in New Delhi.

1.3.41 That on March 19 th , 2014, NTPC wrote

cs:;_:~~.
.. ::
to the Indian Ambassador to the
Russian Federation with regard to the
letter dated March 12 th , 2014, received
C
from TPE expressing their (TPE)
inability to complete Barh STPP Stage-
I unless the Government of Russian
Federation provided the support with
additional financing to TPE as alleged
in the said letter. NTPC requested the
(.·
·-: I

Page 92 of 150
(- Indian Ambassador to take up the
matter with appropriate authority in
the Government of Russian
Federation.

1.3.42 That the Indian Ambassador to the

Russian Federation, vide his letter
dated May 12 th , 2014, informed NTPC
'
t"'':•.
that as per the information provided
t .
by TPE, that there was allegedly a
(
financial gap of over USD
("
\. .• 500,000,000/- {US Dollar Five

( Hundred Million only) which needed to

be bridged to enable TPE to complete
(";
.. ../
Barh STPP Stage-I. It was further
(,.•
informed that TPE had, allegedly,
finalized a credit agreement with a
Russian bank [with the Russian
Ministry of Finance . providing an
interest subsidy of upto USD
( ·,· ;
100,000,000/ (US Dollar One
Hundred Million only)]. It was further
intimated that TPE's holding company
ROSTEC had also, allegedly, approved
()
a loan and further some resources
(

Page 93 of 150
 were being, allegedly, mobilized by

{·
TPE's Russia operations to be
ploughed into the Barh STPP Stage-I.
It is pertinent to mention that TPE did
not provide or share any concrete plan
in relation to the efforts being made to
resolve TPE financial problems.

1.3.43 That NTPC, vide its letter dated April

18 th , 2014, again raised its concern
reg~ding delay in supply of materials
C due to which erection could not be
started. NTPC, vide its letter dated
May 15 th , 2014, further stated that an
C
unplanned and non-sequential supply
, .
'· .
of materials had led to the idling of the
storage of 45,950 MT of materials at
1.'·
<.: :,, the site.

1.3.44 That it came to the notice of NTPC

C
that TPE was indulging 1n non-
payment of wages to the labourers
(.) connected· through sub-contractors of
(. TPE. Sensing the obvious repercussion

( that the aforesaid illegality on the part

Page 94 of 150
' .

TPE could have invited penal actions

under the relevant/ applicable Indian
laws, NTPC, vide its letter dated June
6 th , 2014, asked TPE to resolve the
aforesaid issues with its sub-
contractor. NTPC, further, vide its
letter dated June 7 th , 2014, further
directed TPE to make payments of all.
the due wages of its workers latest by
June 9 th , 2014, failing which, NTPC
,·
may be forced to make direct payment
(_ of wages to workers on June 10Lh,
2014 and the amount so paid would
(
be deducted from subsequent bills
',
( .,,'
payable to TPE.
1.3.45 It 1s submitted that TPE was
deliberately withholding the supplies
and had caused cessation of work at
site leading to the uncertainty 1n
respect of execution of Barh STPP
. C
l ·,/
Stage-I. Considering the aforesaid
(;} alarming situation, NTPC was

(> compelled to issue notices vide letter

dated August 8 th , 2014, to DJU
(.'
Associates of TPE viz., TKZ, ZEP and

Page 95 of 150
 TEP, for fulfilling their obligations
within fourteen (14) days invoking the
relevant provision of the respective
DJU.

(', 1.3.46 That NPTC was surprised to receive

TPE's letter dated September 12th,
2014, wherein TPE sought for an
increase in the contract price to the
tune of USD 230,000,000 /- (US Dollar
Two Hundred Thirty Million only) by

''··· way of additional finance from NTPC

( for completion of Barh STPP Stage - I.
\.,,.

It is pertinent to mention that up till

this stage, TPE was only citing its
(·.'.
financial problems as the reason for
delay and giving assurances to NTPC
that TPE was trying to arrange the
additional finance from Government of
Russian Federation. It must be
(_.
highlighted that the increase in the
ED contract price by way of additional
finance as was being sought by TPE
vide its aforesaid letter was nothing
but an arbitrary and unreasonable
( .

' Page 96 of 150

 demand for increase in the contract
'
price which was beyond the scope of
the Contracts. NTPC, vide letter dated
September 12 th , 2014, replied to TPE's
aforementioned letter and stated that
any extra financing by way of increase
in contract price from NTPC was not
agreeable to NTPC and is beyond the
terms of the Contracts.

1.3.47 Simultaneously NTPC also sent a ·

reminder dated September 15 th , 2014,
to all DJU Associates asking them to
fulfi.11 their obligations as per the DJU.
In reply to NTPCs letter dated
September 15 th , 2014, TKZ, vide their
letter dated September 30 th , 2014,
informed NTPC that it was interested
In continuation and successful
completion of the works under Barh
STPP Stage-I and requested for a
tripartite meeting involving NTPC-TPE-
TKZ.

(;

Page 97 of 150
 1.3.48 That TPE, in the meanwhile, vide its
letter dated September 26 th , 2014
unilaterally revised (further increased)
its demands for an increase in the
contract price to the tune of USD
(,
248,000,000 /- (US Dollar Two
Hundred and Forty Eight Million only)
by way of additional finance from
NTPC and estimated that Unit # 1
could be completed by November,
2016, Unit# 2 by May, 2017 and Unit

''
# 3 by November, 2017. It is stated

C
that NTPC, vide its letter dated
\ ..
October 8 th , 2014, again rejected TPE's
C proposal demanding an increase in
the contract price by way of additional
finance from NTPC and also rejected
the extension of time as proposed by
TPE.

(,, 1.3.49 That the XIX meeting of the Working

(} Group on Energy and Energy

(. Efficiency under the India-Russia

Inter-Governmental Commission on
('
'• C

Trade, Economic, Scientific &

Page 98 of 150
i..'- .." Technological and Cultural
Cooperation was held in New Delhi on
''
October 30 th -3lst, 2014. During the
said meeting, it was categorically
communicated that if a satisfactory
time table for completion of work is
not agreed between the two sides
(NTPC and TPE) by December 1 st,
2014, NTPC would take appropriates
steps according to the terms of
Contracts. It is stated that the

\ .. Protocol (minutes) of the aforesaid XIX

meeting was duly approved by the
Ministerial level Protocol of the XX
c. session of the India-Russia Inter-
('
' Governmental Commission on Trade,
Economic, Scientific & technological
and Cultural Cooperation held in New
Delhi on November 5 th , 2014.

c· 1.3.50 Simultaneously, as per proposal made

by TKZ vide its letter dated September
30 th , 2014, a tripartite meeting was
(', held between NTPC-TPE-TKZ on
·. ,

(
November 11th, 2014, to assess TPE/

Page 99 of 150
 TKZ willingness to execute the balance
works as per the· provisions of the
Contracts/DJUs. TKZ expressed its
()
inability to execute the balance works
( ",'
in its entirety. However, TKZ informed
that it was ready to start supply of
balance materials within its scope
(only upto port as per the agreement
between TPE and TKZ) subject to TPE
releasing its outstanding payment of
USD 5,500,000 /- (US Dollar Five
Million Five Hundred Thousand only)
for materials already supplied 1n
addition to the payment required for
supplies of balance materials. TKZ
(··
expressed its inability in providing any
services/ support in procurement of
other equipments/ components/
systems or any other involvement for
completion of steam generator
f···
l:) package, without the involvement of
@ TPE.

('>
;;/

1.3.51 That NTPC vide letter dated November

(
14th, 2014, provisionally extended the

Page 100 of 150

 Contracts upto October 29 th , 2015

.,·"
; . -: without prejudice to NTPC's right to
levy liquidated damages as per Clause
26.2 of the GCC and categorically
(f\
'.'..,
stated that all the other terms and
(i conditions of the Contracts shall
remain unaltered. NTPC specifically
requested TPE for an unconditional
acceptance of the proposal made by
NTPC vide letter dated November 14 th ,
2014.

1.3.52 However TPE, vide its letter dated

November 27 th , 2014, submitted a
''"
~' revised schedule for completion of
(·
'·,,
Unit #1 by December, 2016 and
reiterated its demand for an increase
in the contract price to the tune of
USD 248,000,000/- (US Dollar Two
Hundred and Forty Eight Million only)
by way of additional finance from
NTPC. In its reply, NTPC, vide its letter
dated November 28th , 2014,

( maintained that it (NTPC) would make

1·. '
payments to TPE only as per the terms
I: .

Page 101 ofl50

 ,-··.-

'

("
\ of the Contracts. It is re-iterated that
r: the NTPC was not contractually
\•

obliged to meet and such alleged

demand of an increase in the contract
price by way of additional finance.
NTPC also asked TPE to resubmit a
revised schedule for consideration by
NTPC, which would be designed to
achieve commissioning of Unit# 1 by
December, 2015, Unit# 2 by June,
2016 and Unit# 3 by January, 2017
with TPE's own funding.

1.3.53 That TPE's delegation headed by their

Director General held a meeting with
(> the Hon'ble Minister of Power,
Cu Government of India on December 5 th ,
2014, wherein TPE reiterated its
demand for an increase in the contract
pnce to the tune of USD
248,000,000/ (US Dollar Two
Hundred and Forty Eight Million only)
by way of additional finance from
NTPC to complete the Barh STPP
Stage - I. TPE followed up on the

. ( Page 102 of 150

 aforesaid meeting vide letter dated
i
,' December 10 th , 2014 addressed to the
\.

Hon 'ble Minister of Power,

l)
Government of India ~which .was
Cc subsequently forwarded to NTPC)
reiterating TPE's demand for an
increase in the contract price to the
tune of USD 248 ,OOO ,OOO/- (US Dollar
Two Hundred and Forty Eight Million
only) by way of additional finance from
NTPC.

\. '.
1.3.54 That it became amply clear that in
spite of the mutually discussed and
()
agreed amendments dated October
(. 29 th , 2010, to the originally awarded
C) Contracts under ICB procedure, TPE
was still making contractually
untenable demands · for increase in
contract price by way of additional
finance .. and for unacceptable time
extensions:· It is most respectfully
('
·~.:./
submitted that from the sequences

(
.
. and events as described above, it is
evident that TPE had time and again
(

Page 103 of 150

r.· .
l intentionally failed and neglected to
perform its contractual obligations
and through its persistent failure and
willful misconduct was causing
('' inordinate delay 1n the timely
(\
,. execution of the Contracts.

1.3.55 That a Board of Directors (hereinafter

referred to as "BoD") meeting (415 th
meeting) of NTPC was held on
December 23 rd , 2014. During the
(! meeting, the BoD was apprised of the

() situation regarding Barh STPP Stage -

I arising from the inordinate delays
(',
caused by TPE and TPE's arbitrary
( -~·..
and untenable demand for time
extensions and increase in contract
price by way of additional finance.
Based thereon, the BoD agreed in
principle to terminate the . Contracts
c: with TPE.

1.3.56 That in terms of the meetings of BoD

C.c of NTPC dated December 23rd, 2014,
NTPC vide letter dated December 24 th ,
(

( Page 104 of 150

,_·· .
i

I·
'· 2014, served a 'notice of default' upon

(~- ... TPE, under Clause 42.2,2 of the GCC.

NTPC clearly brought out various
breaches of the Contracts on part of
TPE, giving TPE the opportunity to
take immediate necessary action to
perform its obligations under the
Contracts within fourteen (14) days
from the date of receipt of the said·
letter. NTPC also proceeded to encash
all the bank guarantees of TPE and its

( DJU Associates amounting to USD

123,093,851.42/ (US Dollar One
(J
Hundred Twenty Three Million Ninety
c, Three Thousand Eight Hundred Fifty
() One and Forty Two Cents only) and

c: INR 670,861,773/- (Rupees Six

Hundred Seventy Million Eight
Hundred Sixty One Thousand Seven
Hundred Seventy Three only) in terms
of the respective bank guarantee
(t agreements. The details of bank

(,: guarantee encashed by NTPC, are as

c, under:

( ,,

(. Page 105 of 150

 S. Bank Guarantee Purpose Bank
('.
No. Details Guarantee
'
'._. ·; ' Amount
1. ND0/6042/GRF Initial USD
/20/94 Advance 27,755,081.33
Provided by TPE
2. ND0/6042/GRF Contract USD 281,829
/20/98 Provided· Performance +
·byTPE INR
203,435,146
3. ND0/6042/GRF Contract USD
/20 /95 Provided Performance 19,696,987
byTKZ +
( .
INR
( ..
136,067,262
4. NDO /6042/GRF Contract USD 196,970
/20/108 Performance +
C Provided by TEP INR 1,360,673
5. NDO /6042/GRF Initial INR
(; /21/40 Advance 115,165,177
c, 6.
Provided by TPE
ND0/6042/GRF Contract INR 77,257,080
( ,_.-\ /20/97 Provided Performance
byTPE
7. 6042FPEBG070 Initial USD
037 Provided by Advance 248,126.90
TPE
8. 6042FPEBG070 Initial INR
(
038 Provided by Advance 137,576,435
TPE
C 9. ND0/6042/GRF Contract USD
() /20/96 Provided Performance 38,891,067
bvTPE
(j 10. 6042FPEBG 110 Additional USD
015 Bank 36,023,790.19
(} Provided by TPE Guarantee
(escalation
(.

Page 106 of 150

i .

20% ceiling
removal)

1.3.57 That TPE, vide its letters dated

December, 25 th and December 26 th ,
2014, sought a meeting in which
senior representative of TPE, Mr.
Balakin was supposed to present the
complete execution plan along with
financial arrangement for the balance
(
work completion without requirement
( of any an increase in the contract

( · .. price by way of additional finance from

NTPC. However, during meetings and
C.\ .~J

discussions held on December

c·; 29th-3Q th , 2014, no such concrete plan
(., was presented by TPE. Even TPE's
letter dated December 30th , 2014 to
NTPC, did. not contain any
comprehensive plan for execution,
c:- additional financing and firm
,r:~; commitment on any issue requ1nng
c· immediate action.
·.
C··~·
( .

Page 107 of 150

\. ·,. 1.3.58 NTPC, vide its letter dated January
7th, 2015, communicated to TPE that
no new proposal or action was
forthcoming from TPE, which could
assure NTPC that prompt activities
had started on the part of TPE and
that TPE was senous about the
implementation .of the Contracts.
NTPC was therefore, constrained to
terminate the Contracts vide its letter
'\ ..
dated January 14 th , 2015, duly served
upon TPE.

C;
cj 1.3.59 Between September, 2015 and
December, 2015, various mutual
c·, consultation meetings, as envisaged
1.::-,
\:,,; under Clause 6,1.l of the GCC, were
held for arriving at an amicable
settlement of disputes between NTPC
and TPE. The said process was
terminated by TPE, vide its letter
dated December 23 rd , 2015, which
,-- '
l) sought commencement of adjudication

(i proceeding as envisaged under Clause

6.1 of the GCC.
(

Page 108 of 150

 .·. ~-

·~· , '

(·",.
( 1.3.60 It 1s stated that Justice (retd.)
Sadanand Mukherjee was appointed
as Ld. Adjudicator and accordingly the
adjudication proceedings with the
("
,_:.:·
participation of the both the parties
were; held between April, 2016 and
May, 2016.

(-
1.3.61 It is submitted that while parties were
(
awaiting the outcome of the
adjudication proceedings, an accident

C, occurred at the Barh site during

gantry crane dismantling work carried
c:; out by TPE's sub-contractor M/s
(_;
Sukesh in which a personnel got
()) seriously injured and NTPC's material
got damaged. NTPC, vide its letter
dated May 17 th , 2016, informed TPE
· that gross violations of Work and
C, Safety Regulations (under Clause
I".::::
\f} 44.00.00 of Erection Conditions of
( '
'--'
Contracts, Part D of Technical
Specifications) of the Contracts was
observed in gantry crane dismantling
(_ ·,

( _-_
Page 109 of 150
{

work and TPE's sub-contractor M/s

Sukesh was working on site without
the relevant fitness certificates issued
under the Bihar Factories Rules,
1950.

1.3.62 That the Ld. Adjudicator passed the ·

final decision on May 20 th , 2016. It is
submitted that aforesaid decision
could be summarized hereunder:

() }, The validity of invocation and

.,
( .,,. '' encashment of bank guarantees
cannot be questioned and the
(\ j

same is according to the terms of

clauses of relevant Contracts. The
encashment of bank guarantees is
valid subject to assessment of the
computation of the quantum of
the amount involved.

}, Termination of Contracts under

( Clause 42.2.2(c) of the GCC is
valid.

(
Page 110 of 150
 ...
I~ ..

>' The parties shall follow Clause

"''· 42.2.3 of the GCC relating to the

\.::.-'

consequences of termination and

the reconciliation process shall
() not stand in the way of complying
with the provisions of Contracts
as above.

}> Reconciliation of equipments,

( ·. packages and other items,· if still
r.
': 1n dispute and not yet complete
may be sorted out by joint
exercise of reconciliation.
>' Liabilities of either of the parties
are not being decided m the
absence of evidence.

1.3.63 It is submitted that TPE expressed its

dissatisfaction with the aforesaid
decision dated May 20t11 , 2016 and
vide its letter dated May 25ttt, 2016
written to NTPC, served notice of
Arbitration under Clause 6.2 of the
( ....
GCC. The present Arbitration Tribunal
I.

Page 111 of 150

 (
(i

has been constituted in terms of the ·

(
aforesaid Clause 6.2 of the GCC.

Hence, these proceedings and the

r··,
,., : '
Counter-Claim. It may further be
noted that facts as presented in the
foregoing paras are based on
oocuments and communications
exchanged between parties which

(: have been exhibited in a chronological

order.

C:
,..•
~~;
,_

C
()
c.:
(,:

Page 112 of 150

{.:.
' 2. The Points at issue

2.1. Whether TPE 1s liable for inordinately

,,, delaying Barh STPP Stage-I?
( .
2.2. Whether TPE is liable for persistent failure
and/ or persistent neglect qua its contractual
obligations in respect of the execution of
Barh STPP Stage-I?
2.3. Whether TPE's persistent failure and/ or
persistent neglect qua its contractual
I
'"
obligations and over all conduct causing
i. inordinate delays in the execution of Barh
STPP Stage-I amounts to "Wilful Misconduct"
... thus rendering any limitations on TPE's
( / ·.
liability under Clause 30 of the GCC
inapplicable?
2.4. Whether NTPC is entitled to the relief sought
for and to what extent?
(:_

(.

0?
c,

Page l 13 of 150
 {

3. Relief or Remedy sought by/ Counter-Claims of

f •
' NTPC

3.1 Cost of Completion of Facilities/Barb

STPP Stage-I by NTPC: NTPC is entitled to
the aforesaid claim as per Clause 42.2.6 of
the GCC.

It is submitted that as described and

demonstrated in the foregoing paras, the
('·
termination of the Contracts were under
C Clause 42.2 of the GCC (Termination for
"'·.

(J Contractor's Default) and more particularly

under Clause 42.2.2 (c) of the GCC for TPE's
C:>
persistent failure to execute the Contracts in
accordance with the Contract or persistent
neglect to carry out its obligations under the
Contracts without just cause. Therefore, the
consequences . of such termination should
necessarily follow as per the provisions of the
(
Contracts. It may be noted that Clause 42.2.6
(\1 of the GCC provides that if the Employer
(; (NTPC) completes the facilities, the cost of
completing the facilities shall be determined.
If such cost of completion by NTPC is in
(
excess of sums due to TPE, TPE is liable to

Page 114 of 150

 pay NTPC such excess. Clause 42.2.6 of the
GCC further required that NTPC and TPE to
agree in writing on the computation and the
manner 1n which such excess sums are
calculated and paid. However, since
(,
termination of Contracts on January 14th,
2015, NTPC and TPE have failed to reach an
agreement regarding the same and disputes
have arisen between parties for the settlement
which the parties are now before this Hon 'ble
Arbitral Tribunal. Therefore, NTPC is putting
I
l ..
forward it's counter-claim for the cost of
(j Completion of Facilities by NTPC which it is
entitled to claim from TPE and TPE is bound
by Contracts to pay to NTPC.

Total Claim under the aforesaid head:

INR 19,264,086,673/- (rounded off) + Euro

14,830,343/- -USD 27,597,454/- {rounded

( off)

{Rupees Nineteen Billion Two Hundred

(. Sixty Four Million Eighty Six Thousand Six
'~
Hundred and Seventy Three only plus Euro
(
Fourteen Million Eight Hundred Thirty
Thousand Three Hundred Forty Three only

Page llS of 150

 I
I

(· .
minus US Dollar Twenty Seven Million Five
Hundred Ninety Seven Thousand Four
Hundred and Fifty Four only)

Total Claim amount is (A + B) - C where A is

cost incurred / to be incurred by NTPC for
completing the facilities as per contracts
already awarded to third parties and B is
estimated cost of contracts yet to be awarded
and C is balance that TPE may have been
entitled to, had TPE performed the Contracts.

A. Calculation for cost of completing Barh

(·, .. STPP Stage-I
'
(' Following packages have been awarded to
"-.
complete the balance works of the package:

s.
Name of!
Vendox
LOA/NO• I
. I I
the A/LOI/P Cost (lliR) Cost (USD) Cost (Euxo)
No. name
Package 0

. :
CS-
• Supply of
M/s 9558-
Air & Gas
l., 1 Lilama 102S-2-
Ducts
Corporal SU-NOA- 17,944,669.
and
ion- 6360 26
Structure
Lisemco dtd.
s
JSC 03.06.20
(i package
15
{
'. ·-

I
•
Page 116 of 150
 I Custom:
i I
Clearanc ' i

e and
2
Transpor
tation of P.O. No.
Cargos of M/s 5500020
SG& Eoxco 619-034-
73,362,013.1
aux. Logistics 1028
8
Items for India dtd.
Stage-I Pvt. Ltd 16.05.20
along 15
with its
unloadin
g at Earh
,_'
STPP
(,
i
I i

3a. Customs 501,870,239.

('_:
& Entry
99 .
Tax, paid

I, 3b. I
-
Entry i
' 25,021,158.4
I

Tax, i
9
anticipat
ed

I 4
i
Erection
P.O. No., i
of Ducts
M/s 5500021
{~- . Supporti
ng
Mukand
570-034- 99,465,875.5
Engineer 1028 - 2
(_ Structure s Ltd.
dtd.
s&
( 26.11.20
Ducts
- --

Page 117 of 150

 '
r
(

----
I ' including!
I 15
i
'
NMEJs I
for
Unit# 1

i
i Erection i
of Fuel '
P.O. No. i

5
Oil M/s 5500021
Trestle Abhishe 587-034-
21,319,200.0
Steel k 1028
0
Structure Enterpri LOI dtd.
( ses 03.11.20
s
15

CIF i
i

Supply of
('
6 Balance CS-
a. Work of M/s 9558-
Main Doosan !02R-2-
Plant Power FC-NOA- 68,166,691.
Package Systems 6458 8,275,787.00
00
Part- India dtd.
A(SG& Pvt. Ltd. 30.01.20
Aux.) for 16
(.
· BSTPP
Stage-I

(; 6 Ex-
I Doosan· CS-
I
(,
b. Works(ln
dia)
Power
Systems
9558- ["·:06,90
102R-2-
(··
Supply of India SC-NOA-
~.
----- ~----

Page II8 of 150

 (
I
i
i -·----r-
Balance· Pvt. Ltd.• 6459 I
-----·--------·--
i --·-·-·~·~1
Work of dtd. i

Main 30.01.20
Plant 16
Package
Part-
A(SG&
Aux.) for
BSTPP
Stage-!

. lnstal!ati ·
i !

on,
I

i I
Testing M/s
6
and Doosan
c. CS-
Commiss Power
9558-
ioning of Systems 102R-2-
Main India
TC-NOA- 4,385,411, 11
C Pvt. Ltd. 9,494,444
Plant 6460 3
Package dtd.
Part- 30.01.20
A(SG& 16
Aux.) for
BSTPP
Stage-!

: Supplyof M/s CS- i .i

7 Power BHEL
I

9558- I I
Cycle ltd. 102D-2-
1,638,574,44 16,253,260.
Piping FC-NOA- 6,554,556
4.10 25
( Package 6349
for dt.
(
BSTPP 22.05.20
·---·-

Page 119 ofl50

 r·,

•
\,
·---~,-
! ·stage-I 15 I
('"'"•'
\.· I
! Installati I
'
~
M/s CS- I
L) on of
7a. BHEL 9558-
,,_,,..
(,f::-.., Power
ltd. 1020-2-
Cycle
1\ SC-NOA-
1. •• > Piping 478,436,844
6350
Package
dtd.
for
22.05.20
BSTPP
, 15
Stage I

I TPE I

( 8 material Oriental
insuranc Jnsuranc 15.05.20
15,071,983
c after e Co. 15
(/ terminati Ltd.
on
(·
'
PO No
Installati• I Griffin I
9 5500020
on of VIS Power
276
for 2 nos. 175,835.46
Pvt. Ltd.
dtd.
ID fans o
19.06.20
Unit#2
15

Gerb
Surveilla P.O.No.
10 Vibratio
I

nee 5500020
n
during 439-034-
Contr ol
() installati 1028 68,375
Syste ms
on of VIS dtd.
C Pvt. Ltd. 02.07.
20
for 2 no s.
10 fans 0 15
I
I

(
1,

' " 120 of150

Paue
 {

I
i
I
I
. .--1
Umt#2 ~.~---·-·-·,-----~-T----··-
·. . -··---·
I
l. ' i
' I
I '
: Ex-works
CS-
I
i 9558- '
supply of M/s
102T-2-
Coal Mill H.V.
11 FC-NOA-
Rejects Equipme 7,88,90,000
c·, a
Handling nts Pvt.
6518
dtd.
System Ltd.
28.10.20
Package
16

Inland '
(' I ' I
i I
Transpor
( . tation,
lnsuranc
( CS-
e,
9558-
( Installati M/s
102T-2-
on, H.V.
11 SC-NOA-
testing & Equipme 1,42,00,000
b 6519
commissi
c oning of
nts Pvt.
Ltd.
dtd.
28.10.20
Coal Mill
16
,. •.
Rejects
i

Handling
System
Package

16,617;573,9 [ 111,859,06
() Total
85.74/-
14 830 343 I - •
4.51/- '

(: y

(,

(
Page 121 of 150
 It may be noted that:
(
\

>" The specifications have not been changed for the

award of above packages and are same as
Contracts with TPE. The awarded rates are
reasonable and fair market price (domestic/
international as the case may be).
>" The packages at serial no. 6, 7 and 11 have
been awarded vide open tender through
I .
\ "
Domestic Competitive Bidding / ICB process.
c Adequate offers were received.
(, > The packages at serial no. 2, 4, 5 and 8 have
been awarded via limited tender. Adequate offers
were received.
>" The package at serial. no. 1 was awarded via
C single tender to TPE's sub-vendors, where the
rate is lower than TPE rates/ BBU rates.
>" The package at serial no. 9 was awarded on
single tender due to urgent requirement at site.
>" The package at serial. no. 10 was awarded on
(; single tender on Original Equipment
CJ} Manufacturer (OEM)/ Original Equipment

c: Supplier (OES) basis.

j;;, The items at serial no. 3 are statutory taxes.
C
> Contracts at serial no. 6 and 11 are awarded
(
with a provision of Price Variation Clause

Page 122 of 150

 (hereinafter referred to as . "PVC") which is
identical to Price Adjustment provisions in First
Contract awarded to TPE. The agencies will be
("'; compensated as per the provisions of Price

c., Adjustments during the execution of Contracts.

Exact financial implication of the same will be
known after completion of the project which
shall also be included 1n the costs for
completing Barb STPP Stage I and hence shall
be paid by TPE to NTPC as per actuals.
(
}- In respect of Contracts at serial no. 6 for
c· balance work of Barh STPP Stage-I awarded to
C Doosan, it is required to use material already

(.~/'\ supplied by TPE. In case of any damaged

materials which require replacement/ servicing
c·
resulting into any extra claim from Doosan, the
same shall be included in the costs to complete
Barh STPP Stage I and hence shall be claimed
from TPE by NTPC as per actuals.

c,
As per the aforesaid table, total expense incurred
G)
by NTPC in re-awarding the above balance works
of the package 1s INR 16,617,573,986/-
(.:_,;,'·-., (rounded off) + USO 111,859,065/- (rounded
off) + Euro 14,830,343/- (Rupees Sixteen Billion

Page 123 of ISO

l'···:

Six Hundred Seventeen Million Five Hundred

( ··.,
1,. :
Seventy Three Thousand Nine Hundred Eighty Six
only plus US Dollars One Hundred Eleven Million
Eight Hundred Fifty Nine Thousand and Sixty Five
only plus Euro Fourteen Million Eight Hundred
Thirty Thousand Three Hundred and Forty Three
only).

B. Estimated cost of other works in the order of

(" M/s TPE

NTPC reserves its rights to raise claims for some

( ·,·.
~··-' of the items of other works of the package which

C; '
are not covered above but which were part of the
Contracts with TPE. These items include supply
and erection of auxiliary boiler, coal flow
measunng system, boiler maintenance work
station (BMW), MPV type combustion system,
steam generator model study, instrument for tube
thickness measurement, software for life
assessment of tube/ pressure parts, coal abrasion
test apparatus, training for Employer's personnel,
C, permanent chemical deaning system, online coal
(; flow measuring system. The costs of such items
( have been estimated based on data available with

C. Page 124 of 150

 NTPC. Some of the reference costs are based on
( ',

' prices quoted by TPE in their bid as takeout

f''.
\;f) price, some other costs are calculated as per data
available with NTPC for other projects and the
remaining are based on fair estimates by NTPC.

1 I BMW boiler Maintenance

, work station
II
.
Basis I Simhadri-11 cost of
: l withdrawal (BOD 2005) INR 11000000 i
Rate of escalation % 6
~·
; Number of years for
( escalation ueto Jan, 2015 Years 9 .

I Escalated price as on date

2015 , INR .. 18584268.55 l
i

c· !2
I
MPV type combustion I

i
Inland
C
Basis I TPE Bid take out price
I C!F USD
transportation
INR
C} (BOD 20041 -
i
i 1135465 89000
I I !

Rate of escalation
I
I:6 ··~
,% 3

~
:
: Number of years for
I escalation uoto Jan 2015 Years i 10 10
I
I USD@INR , 65 ....•

~
I • Escalated price as on date
(} ' :
2015 l 1525970.02 159385.445

~--~---------------------,---
. Total price in INR INR . 99463089.5
'

3 ISteam generator model

'stud
(··.·.'
i
. Inland
transportation
INR ·
! - - - - + - - - - - - c - - - - - - - + - - - - + -CIFUSD
=
Basis TPE Bid take out price 315000 15620

\._ .'
Page 125 of 150
['

(BOD 2004) -
Rate of escalation '3 6 I
Number of years for
I
escalation upto Jan 2015 , Years ! 10 10
r
(./, • USD@INR 65
!
Escalated price as on date 1·

2015 , 423333,655. 27973,04102

I Total price in INR INR 27544660. l
C) i--1--1-~--,---'---C----'-'-'-'--+----·--·-i
j i i

I 4 I Instrument for tube ,

· thickness measurement
I
NTPC estimate !INR ! 10000000

I
( 5Software for life
assement of
!

( ~ _ __,l_t__u_b_e~/~·p~r_e_s_s_u_r_eJp~:a_rt_s_ _ _t - - - - - + - - - - - - - - 1 - - - - - - - - - 1
i I I
Basis : Cost of Withdrawal by
· bidder in bongaigaon
(
.
}
project {BOD-2007} !NR 33000000 i i
Rate of escalation % 6
Number of years for I
i escalation upto Jan 2015 Years 7 i
Escalated price as on date i

C• 2015 INR 49619798.5::,;s=--+1------'I

I I
,6 Training for Employer's I
i1----t-<::::==:::,::,_-=-=-:c-:--:-----+~--+------+----·--
personnel · i
Exclusion of O&M Man !

I enPineers training month 23

I Exclusion of engineering Man
, personnel davs I 521
Exclusion of CFD training ! Man
C; i month 4 I
i
@)
(}
i
Basis TPE Bid take out price
[BOD 2004) - training for ,
O&M personnel (for 35
_J
man months) USD 68000 ·.
1-----t-=:---:-:----c-~--.,----t------:--------i---
' TPE Bid take out price
(', · (BOD 2004) - training for

(
Engineering personnel (for
22 man months) USO 34600 i

Page 126 of 150

 ! Rate of escalation % 13
' number of years for :

I escalation upto Jan 2015 i Years

USD@INR
I 10
I 65 '
I
• Escalated price as on date
I 2015- for O&,M personnel I
!---···
for 23 man months USD I 60053.86335
( ,: Escalated price as on date !
\.,'
20 15- for Engineering
personnel for 521 man
days (approx. 17 man
months) USD 36706.42879
Escalated price as on date : !

' 2015- for CFD training for

C 4 man months
"· :·
· (considering the same rate
as for engineering
personnel USD 8454.455768
.
Total price in INR INR 6838958,614

r · Temporary chemical
I cleaning in place.of

permanent chemical
I

,·. I cleaning
() Basis NTPC estimate for supply
·····-

of tonnage of material for

(: permanent chemical
cleaning svstem MT 1110
() Rate of material per ton INR/k :
: e:
Total price in lNR INR 486000000
:
i I
:
C. · 8 I Coal abrasion test
i annaratus
! Basis i NTPC estimate for coal
I: INR I
:
I abrasion test a aratus 5000000

:9 Online coal flow

.. : measurement facilities
- - - - - + - - - - + - - - - - ~ - _ , . __ _ _ _ __
( .;f'
. Inland
' transportation
CIFUSD INR
i, Basis • TPE Bid take out price
(· 1 (BOD 2004) - 1125630 54800

(-··

Page 127ofl50
/d
r :· ·.•

/. ~
'·-. --····-----
Rate of escalation '% 13 6
, number of years for I :

I i escalation uoto Jan 2015 Years ' 10 10

I USD@INR I 65
Escalated price as on date • I
i
2015 ' 1512752.594 98138.45377
' °'·'.
1;· :
Total price in INR INR 98471040.29
:

10 Auxiliary Boiler i

, Basis Vendor quotation INR 89000000

:
I TOTAL 890,521,8 !

i INR 16 I

Total claim under the aforesaid head is INR

890,521,816/- (Rupees Eight Hundred Ninety
Million Five Hundred Twenty One Thousand
Eight Hundred and Sixteen only) as per the

('"' foregoing tabular chart. As the amounts are

~~-j
tentative and are in the nature of fair estimates,
NTPC seeks leave to amend the same and claim
as per as per actuals at the appropriate time.

/; =:
\_,,

(,

€)
( '·,_:;
;,

( ..·
~

Page 128 of 150

(

C. Balance that may have to be paid to TPE, had

TPE performed the Contracts

Amount paid •
(': LOA value of I
Amount
s. by NTPC
Contracts Currency TPE's contracts balance
(l No. excluding PVC
(a) (c = a-bi
(bi

1st 137,638,168. !
l• USD 388,910,673.00 251,272,504.34
Contract 66
(
I
2nd
I I 629,122,803.,
l
( 2! !NR 772,570,796.00 143,44 7,993.00!
Contract 00

(
:·, I i
'.'.: 3rd
3a. USD 2,818,288.00 I 999,937.80 1,818,350.20
(; Contract

3rd 1, 126,868,06 •
0 3b.
Contract
!NR 2,034,351,463.00 907,483,39s.001
8.00
i
Total balance payable amount = USD
I
139,456,518.86/- + INR!
i
1,755,990,871.00/-

In terms of the aforesaid table, the balance

amount which would have been paid to TPE
0 to complete the facilities IS USD

"''~
\~;~ 139,456,519/- (rounded off) + INR
(} 1,755,990,871/· (US Dollar One Hundred
Thirty Nine Million Four Hundred Fifty Six
()
Thousand Five Hundred and Nineteen only
plus Rupees One Billion Seven Hundred Fifty

Page 129 of 150

i

( -

Five Million Nine Hundred Ninety Thousand

Eight Hundred and Seventy One only).

Total Claim under this head = (A + B) - C

=(INR 16,617,573,985.74 + USD

111,859,064.51 + EURO 14,830,343) + INR
890,521,816 - (USD 139,456,518.86 + INR
1,755,990,871)
,".:.=:.
\))'
= INR 19,264,086,673/- (rounded off) +
( .·
EURO 14,830,343/- - USD 27,597,454/-
(rounded off)

(Rupees Nineteen Billion Two Hundred Sixty

C
Four Million Eighty Six Thousand Six
(,
Hundred and Seventy Three only plus Euro
c~ Fourteen Million Eight Hundred Thirty
Thousand Three Hundred Forty Three only
minus US Dollar Twenty Seven Million Five
Hundred Ninety Seven Thousand Four
Hundred and Fifty Four only)
('

(,:
3.2 Liquidated Damages
()
NTPC is entitled to the aforesaid claim for
C' liquidated damages as per Clause 26.2 of the
(! GCC read with Clause 8 of the SCC. Clause
26.2 of the GCC stipulates that if Contractor

Page 130 of 150

 /.

(
•.

(
(TPE) fails to attain successful Completion of
. the Facilities or any part thereof within the
Time for Completion or any extension
thereof. .. , the Contractor (TPE} shall pay to
the Employer (NTPC) liquidated damages 1n
the amount computed at the rates specified in
the SCC. The corresponding Clause 8 of the
sec provides that liquidated damages for .
delay in successful completion of Facilities
shall be ... subject to maximum of five percent
(5%) of the total contract price for First
C Contract, Second Contract & Third Contract.

C'1.. It may be pertinent to highlight that

liquidated damages are typically in the nature
0
of genuine pre-estimates of damages. Since,
(,
in the present instance, Clause 8 of the sec
categorically stipulates that maximum
deduction for liquidated damages for delay
under the Contracts will be subject to a
· maximum of five percent (5%,) of the total
(;
contract price, the idea of such a meagrely
capped liquidated damages provision being a
( ;'' genuine pre-estimate is clearly ousted. In

(; fact, the maximum cap of five percent (5%) of

r< ,
the total contract price makes the liquidated
I •• ,

(
Page 131 of 150
 damages only a miniscule portion of the
actual damages suffered by NTPC. However, if
we were to calculate the liquidated damages
without the aforesaid cap of five percent {5%)
CC·•
( ..
. and as per rates provided in Clause 8 _of the
SCC, a genuine pre-estimate of damages
would be as follows:

USD 75,846 for each day of delay per Unit

(
\ ,.
Delay of 4 years and 1 Month = 1,490 days

Therefore, Liquidated Damages on account of

delay of 1,490 day for all three (3) units=

1,490 X 75,846 X 3 = USD 339,031,620/-

(US Dollar Three Hundred Thirty Nine Million
Thirty One Thousand Six Hundred and
Twenty only)

Separately, there is a provision for additional

liquidated damages for TPE's failure to deliver
mandatory spares in time which is being
()
overlooked for the present purposes.
(}

(
. •.
·• In any event, in deference to the provisions of
the Contracts, NTPC is compelled to restrict

,. its claim under the aforesaid head to the

Page 132 oflSO

C.·

C maximum cap of five percent (5%) of the total

/''-,

l. ' contract price,

.·.
(:..:_:i
Total Claim under the aforesaid head:

USO 19,586,264/- + INR 140,342,955/-

{US Dollar Nineteen Million Five Hundred

'Eighty Six Thousand Two Hundred and
Sixty Four only plus Rupees One Hundred
Forty Million Three Hundred Forty Two
Thousand Nine Hundred and Fifty Five

(, .. '
only)

Computation of aforesaid claim as per Clause 8 of

~. the sec is provided hereinbelow:

( .)
S. No. Contract Price • 5% of Contract Price I
I I
···-···
First Contract USO 388,907,009 1
USO 19,445,350

Second Contract INR 772,570,796 lNR 38,628,540

I Third Contract USD 2,818,288 USO 140,914

INR 2,034,288,297 INR 101,714,415

1

i
TOTAL
i
USO 19,445,350 + USO 140,914 USO 19,586,264/·
()
lNR38,628,540 + INR 101,714,415 INR 140,342,955/-
()

(·

Page 133 oft SO

(
'

f. .
'· . 3,3 Claim in respect of Functional
Guarantee/Performance Guarantee Test

NTPC is entitled to claim under the aforesaid

head as per Clause 28 of the GCC read with
"Functional Guarantees and Liquidated
Damages", Part - A of Section - VI of the
Technical Specification. NTPC is entitled to
claim up to 25% of the Contracts price by way
of liquidated d?ffiages in case of any shortfall
1n the guaranteed level of performance
parameters of the equipment/ system/ plant.
('.
If the performance guarantees, as provided by
c· TPE are not met either in whole or in part
when the guarantee tests are performed upon
Completion of Facilities, NTPC shall be
entitled to claim liquidated damages for
shortfall m such performance guarantees
from TPE including any costs incurred to
C make any changes, modifications and/ or

(; additions to the plant or any part thereof as

(·
may be necessary to meet such guarantees.
:..._1

Total Claim under the aforesaid head:

( Currently unspecified.

Page 134 of 150

( - -·
'·
r
I

(' ·.' ·.
3.4 Claims against damage to material during
removal of TPE's gantry crane from site
after termination of the Contracts

NTPC is entitled to claim under the aforesaid

(' \
1,:: .'
head as per Clause 33, 1 of the GCC. It is
submitted that upon termination of the
Contracts, TPE was required as per Clause

( .
42.2.3 (a) of the GCC to handover the site in
•.
clean and safe condition to NTPC. However,
(
during dismantling of gantry crane being
carried out by TPE's sub-contractor M/ s
C ·_. Sukesh, an accident occurred at site on May
'
13 th , 2016 and resulted 1n damage to
materials of NTPC. This was promptly
(', '1,I _.

communicated to TPE vide letter dated May

( __·.,
'-,.-
17 th , 2016.

( . As per Clause 33.1 of the GCC, TPE is liable

to indemnify NTPC for loss incurred by NTPC
()
due to the damage to its materials, the landed
(j
cost of the said damaged materials is
r·,:. ,. ' (approx.) INR 26,083,717 /- (rounded off)
(Rupees Twenty Six Million Eighty Three
Thousand Seven Hundred Seventeen only).

( .·
Page I 35 of 150
 Computation of the landed cost of material
damaged by gantry crane accident is provided
below.

S. I Material Unit • Approx. 1100% OFMI, 100% Freight,

r··. No. • Wt,MT • FOB, USO USO (b) PVC lNR (d)
' (a) payable,
'

USO {c)
1 APH 1 30.57 95773.36 6357.95 16542.07 i 117449.94
rotor
block I
2 LPR 3 22.06 147416.39 9786.26 29843.28 I 84754.52
block
!3 LPR 3 11.79 30975.87 2621.86 17820.39 • 45297.18
i JJiJJing '

(.
Total amount, {a + b + c + d) USO
C 356,777.43 and INR 247,501.64
('; Taking 1 USD 67 INR,
(', Total amount in INR = 356,777.43 x 67 +
247,501.64 = 24,151,589.62
EntryTax@8% = INR 1,932,127.17
Total amount= INR 26,083,717/- (rounded
i off) (Rupees Twenty Six Million Eighty Three
(. ·..
-_/
Thousand Seven Hundred and Seventeen
only)

However, the amount to be reimbursed by

TPE shall be equivalent to the payments to be
( made to M/s Doosan by. NTPC for the

Page 136 of 150

/ . ·.
l'
resupply/ repair of the said damaged
materials.

c:·· Total claim under the aforesaid head:

Currently unspecified
fc··
<:

3.5 Outstanding payments to be made by TPE

3.5.1 Claims against pending payments by

(

TPE for electricity bills NTPC is entitled to

(. '

claim under the aforesaid head as per

"I·,. . '
Clause 27 .02.00 of the Technical

(; Specification for Main Plant Package (Part

D). TPE has failed to clear its outstanding
c·
bills for electricity consumption.

Total claim under the aforesaid head:

I·•
\,
INR 557,331/-
(Rupees Five Hundred Fifty Seven Thousand
(j
Three Hundred and Thirty One only)

3.5.2 Claims against pending payments by

(j
TPE for lab test bills NTPC is entitled to
claim. under the aforesaid head as per
Clause 3.02.00 of Erection Conditions of

Page 137 of 150

 Contract (Part· D, Section VI A) of the
Technical Specification. TPE has failed
make payments for the Lab test and clear
the weighment charges. Total claim under
the aforesaid head:

INR 2,528/~
(Rupees Two Thousand Five Hundred and
Twenty Eight only)

(
Total Outstanding payments to be made
by TPE: Total under 3.5.1 + Total under
(: 3.5.2 = INR 559,859/~ (Rupees Five
Hundred Fifty Nine Thousand Eight
(J
Hundred and Fifty Nine only)
('
' '

3.6· Losses incurred by NTPC due to willful

misconduct of TPE resulting in inordinate
(
, ..
delay in completion of Barh STPP Stage-I

( :./
,~l NTPC has amply demonstrated and clearly
established wilful misconduct on the part of
TPE in the foregoing paras and hence is
(> /

entitled to make the aforesaid claim. The

('
' limitation on TPE's liability under Clause 30
of the GCC is applicable only in cases where

Page 138 of 150

 TPE is not guilty of criminal negligence or
,-::- '
(=_·_) wilful misconduct. Since TPE is clearly guilty
of wilful misconduct insofar as causing
inordinate delays in the completion of Barh
STPP Stage-I is concerned, NTPC is entitled to
claim any indirect or consequential loss or
damage, loss of use, loss of production or loss
of profits or interest costs etc.

Total claims under this head:

(
INR 71,047,453,461/-+ Euro 185,149/-

(Rupees Seventy One Billion Forty Seven

c· Million Four Hundred Fifty Three
( ··'._
j
Thousand Four Hundred Sixty One only
plus Euro One Hundred Eighty Five
(
Thousand One Hundred and Forty Nine
(};
only)

Computation of the aforesaid claim 1s

•'· "
provided herein below:
(;
3.6.1 Loss of profit on account of non-
generation
()
C It is humbly submitted that NTPC has
invested huge sums of monies for the

(
Page 139 of 150
 implementation of Barh STPP Stage-I. The
("
aforesaid sums of monies .invested by NTPC
has been in the debt equity ratio of 70:30 as
per the then applicable CERC guidelines. As
of 2014-15, the total project cost for Barh
(.
STPP Stage-I and NTPC's equity investment
is provided in the table herein below:
Non- Generation Loss IStae:e-Il
· S. no. Descriution Amount (in INRl
1 Total Proiect Cost 120 14-151 149,048,159,000
Project Cost {Unit# 1)
including common station I

facilities {40% of Total

a Proiect Cost) 59,619,264,000
( Project Cost (Unit#2) (30% of
b Total Project Cost) l 44,714,448,000
Project Cost (Unit#3} (30% of I

C Total Project Cost) , 44,714,448,ooo I

Equity @30% of Unit ,vise I i
2 Proiect Cost I
'For Unit #1 17,885,779,000'
For Unit #2 13,414,334,000 '

• For Unit #3 I 13,414,334,000

Date of completion of Unit#
i
3 1 I 29-10-2013 I
I Date of completion of Umt #
' As per L2 schedule-
'
12 TPE Contract ! 29-04-2014
• Date of completion of Unit #
3 . 29-10-2014
Date of completion of Unit #
1 30°11-2017.
Date of completion of Unit # i As per L2 schedule- '
E};, 12 !DPS1 Contract 30-05-2018
~ate of completion of Uni~
( 30-11-2018
Rate of Return on J:!.;QUltV
[ er CERC Guidelines 16% · _ _ _ _ __,
'-.:.1..----'------_;:c:...c.c....,_
The rate of return on equity has been taken "'ithout considering the taxes
(

(
Page 140 of 150
L
'·

,.\ .
.

since the same has not been paid as of now. However, the same shall be
r
payable on realisation of the following calculated amount and· shall also be
;
considered in claim.

(;i
c,
Total claim under the aforesaid head:

INR 36,428,541,000/- (Rupees Thirty Six

Billion Four Hundred Twenty Eight Million
Five Hundred Forty One·Thousand only)
(

c·
2013-2014 2014-2015 : 2015-2016
I
I

Delay Delay Delay

( .,,:·. Unit
RoE {in lNR) m I RoE (in INR) . m RoE {in INR)
in
days davs I days
l 1,199,572,0 2,861,725,00 2,861,725,00 I
153 365 365
00 0 i 0
2 1,975,766,00 2, 146,293,00
0 0.00 336 365
0 0
' '
3
0 0.00 153 I 89.9,679,000 365
2, 146,293,00
0
i

Total 1,199,572, 5,737,170,0 ·1,154,312,0

'-----------······ I OOO 00 00

(,:;.

c Page 141 oflSO

(
(

( \
\. __ _
20lti-2017 I 2017-2018 2018-2019 I

( ..
., . i
! Delay Delay Delay
Unit in RoE [in INR) in RoE (in INR) m RoE (in INR)
(,;i i davs davs days
····-
:
: 1,905,203,00
I
(, I 365
2,86 I ,725,0 243
0
0 0.00

c, I 00

I
--------
: 2, 146,293,oo I
i
2, 146,293,0 365 60 352,815,000 •
2 365 0
00

:
: 2, 146,293,00 : 1,428,902,00
2,146,293,0 365 243 .
3 365 0 0
(.
I 00

6,197,790,00
•

1,781,718,00
(. I Total .
i 7,154,312,0
0 0
00
(
(.
Rate of return on equity assumed with MAT (Minimum
C Alternate Tax) as per CERC Circular.

Interest on RoE @12%

I
2013-2014 2014-2015 2015-2016 !
/:·
\ .. I
• : I
Delay Interest on Delayi Delayi
Unit in RoE fin
I

n
Interest on
n
Interest on RoE I
I
RoE (in INR) (in INR)
days INR) i davs days
(::} I 153
30,170,00
365 315,652,000 I 365 659,059,000
0 ·····-
:
2 0 0.00 336 118,546,000 365 I 365,870,000
C 3 0 0.00 153 53,981,000
!

365 : 236,739,000
( .·-··: 30,170,00 :
1,261,668,000
Total 488,179,000_L
0

(· '
\ .
Page 142 ofl50
~-.
(

Interest on RoE@l2%

2016-2017 2017-2018 I 2018-2019

Delay · Delay lnterest on

m Interest on 111 I lnterest on Delay RoE (in
Unit days RoE (in INR) days RoE (in INR) in days INR)

1 I 365
1,002,466,0
00 243
I 0 0.00
I 857,811,000 •
169,467,00
21365 i 623,425,000 365 880,980,000 60 • 0
643,358,00
3 365 I 494,294,ooo 1365 751,850,000. 243 0
Total 2,120,185,0 2,490,641,0 812,826,0
00 00 00

(
.. TOTAL
Amount (in INR)

C Return on Equity
29,224,873,000
IRoEl
( interest on RoE 7203,668,000 I
Grand Total
() i 36,428,541,000
I

3.6.2 Losses on account of Interest During

Construction {IDC} and Incidental
Expenditure During Construction (IEDC}
for Barb STPP Stage-I for the period
2013 to 2018
It is humbly submitted that IDC as aforesaid
is in respect of the debt component actually
(>
utilised out of the 70% debt of the Total
( ' ,.)
Project Cost as per table above.
Total claim under the aforesaid head:

(
Page 143 of 150
( ·:..
'- .·

(
INR 30,566,687,240/- (Rupees Thirty
Billion Five Hundred Sixty Six Million Six
Hundred Eighty Seven Thousand Two
Hundred Forty only)
('!

( ~'...-
,

As per audited balance sheets of Barh STPP,

the IDC accrued on debt utilized for the
period between April, 2013 and December,
2016 is as under:
;.,, IDC for Barh STPP Stage - 1 during April
\ .
2013- December 2016 = INR
c: 18,129,687,240.03 (Rupees Eighteen
(' Billion One Hundred Twenty Nine Million
Six Hundred Eighty Seven Thousand Two
C,
Hundred Forty and Three Paise only)
C.. ;.,, Projected IDC for Barh STPP Stage - I for
period between January 2017 till
November 2018 (Date of completion of
( '' Unit#3) = INR 12,437,000,000 (Rupees
Twelve Billion Four Hundred Thirty Seven
Million only)
Total= INR 30,566,687,240/- (rounded-off)
(Rupees Thirty Billion Five Hundred Sixty Six
Million Six Hundred Eight Seven Thousand
Two Hundred and Forty only)

Page 144 of I.SO

[.

However, NTPC reserves it's right to the

, .
'\_, .'
claim under the aforesaid head as per
c· actuals.
~-·

3.6.3 Losses on account of Incidental

Expenditure During Construction (IEDC)
for Barh STPP Stage-I for the period
2013 to 2018
It is submitted that Incidental Expenditure
as aforementioned includes but is not limited
to administrative overheads which are not
included in the Total Project Cost (as
provided in the foregoing paras).
C>
(, Total claim under the aforesaid head:
INR 3,968,590,984 /- (Rupees Three Billion
(i.·
Nine Hundred Sixty Eight Million Five
(: .

Hundred Ninety Thousand Nine Hundred

and Eighty Four only)
C· As per audited balance sheets of Barh STPP,
the IEDC incurred between the period of
April, 2013 and December, 2016 is as under:
>- IEDC for Barh STPP Stage - I during April
2013- December 2016 =
(

!
Page 145 of 150
({.·.
(.

(_
INR 3;395,590,983.68/- (Rupees Three
('\ Billion Three Hundred Ninety Five Million
'.:.,.,'

A'•
t,) Five Hundred Ninety Thousand Nine
Hundred Eighty Three and Sixty Eight
(?
Paise only)
(:
>" Projected IEDC for Barh STPP Stage - I
between January 2017 till November
2018 (Date of completion of Unit#3) = INR

(
573,000,000/- (Rupees Five Hundred
Seventy Three Million only)
(~.
Total= INR 3,968,590,984/- (rounded-off)
(; (Rupees Three Billion Nine Hundred Sixty
() Eight Million Five Hundred Ninety Thousand
Nine Hundred and Eighty Four only)
()
c:, However, NTPC reserves it's right to the
claim under the aforesaid head as per
actuals.

() 3.6.4 Claim on account of compensation to

other agencies
Total claim under the aforesaid head:
(·.,
INR 83,634,237 /- (rounded off) + Euro
C·, 185,149/- (rounded off)
(.

Page 146 of 150

''
' ' '

(Rupees Eighty Three Million Six Hundred

Thirty Four Thousand Two Hundred and

() Thirty Seven only plus Euro One Hundred

Eighty Five Thousand One Hundred and Forty
r··. Nine only}
The aforesaid claim is without prejudice to
NTPC's right to claim further compensation, if
any, paid by NTPC to other agencies in future.
NTPC reserves its rights to amend the claim
under this head if a future claim arise.s during
the pendency of present adjudication and/ or
raise the said future claim{s) subsequently.

Due to deliberate/willful delay in Completion

( ", "/ of Facilities by TPE, Works of other agencies
also got affected and a list of claims by such
agencies is provided hefein below:

s. Agency Package Financial Financial Remarks

No. implication due im plica tic n
to delay (INR) due to delay,
Euro

M/s Techno FO & Stn. PVC-Erection, paid

c:•. 1 Electric Piping, Stg-1 11,234,126.77 due to L2 revision
(

Page 147 of 150

( PVC-Erection

c: 6,792,368.43
anticipated to be
paid, taken @60%
(J
M/s
C Minimax FOPS, PVC-Erection paid
2 Gmbh Co. Stage-I 11,807,736.34 after L2 revision
(1
PVC-Erection
! anticipated to be
11,793,003.00 paid taken @30%

156,056.22 PVC-Supply, paid

1 I
:
C :
PVC-Supply
anticipated to be
(,:;... 29092.98 paid taken@30%

(~ PVC-applicable, due
9,562,618.00 to L2 revision
() M/s L&T CHP, Stage-I
3 , BG& Insurance
("·,
• .. Charges to be
32,444,384.00 reimbursed

TOTAL 83,634,236.54 185,149.20!

\,
I

i ' !
C,::
3.6.5 Claims against repair of damaged
€} equipment/ missing materials
() That as per the Contracts awarded to

( Doosan [referred to at serial no. 6 in the

tabular chart at 3.1 (A) above] for balance
(
,· ..

Page 148 of 150

{

work of Barh STPP Stage-I, Doosan is

required to use material already supplied by
TPE. In the event of any supplied material is
found to be damaged or is not found at all
resulting into any extra claim from Doosan,
the same shall be paid by TPE to NTPC as
per actual.

NTPC reserves its rights to raise claims for

such damaged or missing materials resulting
( into any extra claim from Doosan.

3.6.6 Litigation Cost

· That NTPC is entitled to claim from TPE the
cost and expenses for the present or any
()
future legal proceedings between NTPC and
TPE. Additionally, NTPC is also entitled to
claim the cost and expenses involved 1n
contesting any litigation between TPE and its
sub-contractors where NTPC has been
unnecessarily dragged into.
c,

C
(

Page 149 of 150

 PRAYER
C
/'•.
t:)~
In the facts and circumstances mentioned
hereinabove, the Hon'ble Arbitral Tribunal may be
('
pleased to allow the claims of NTPC in terms Para
(> 3.1, 3.2, 3.3, 3.4, 3.5 & 3.6 of the Statement of
Counter-Claim.

Date: February -rth, 2017

Place: New Delhi

(.
THROUGH,
()
C' ;

A G'{JST LEGAL
S-553, GREATER KAILASH '- II,
NEW DELHI - 110048.

(-· ··,

.
C '•

(·

Page 150 of 150

(

BEFORE THE ARBITRAL TRIBUNAL COMPRISING OF

( HON'BLE MR. CHIEF JUSTICE R. C. LAHOTI,

(' HON'BLE DR. JUSTICE ARIJIT PASAYAT &

HON'BLE MR. JUSTICE DEEPAK VERMA

(Fonner Judges of the Supreme Court of India)

c.·.
v.· IN THE MATTER OF:

JSC "VO "TECHNOPROMEXPORT" .... CLAIMANT

Versus
/~,· ..
I
\,._,

e
...'
( employment of NTPC Limited, currently posted at Barh-STPP, Patna, Bihar in

the capacity of Additional General Manager and having come down to New

Delhi do hereby solemnly affirm and declare as under:

I. That I am the authorized representative on the behalf of NTPC Limited to

C
sign and verify the pleadings, reply and other documents and also
(\)
represent NTPC Limited before this Hon'ble tribunal in the aforesaid
(~
matter and being aware of the facts and the circumstances of the case, I
('
(·
am as such competent to swear this affidavit.
 ®
(

2. That the accompanying statement of counter claims has been drafted by

(. our counsel under my instructions and I have also read the contents
r··, thereof. I state the contents of the aforesaid statement of counter claims
\

are true and correct on the basis of records. I state that nothing material

('~ has been concealed therefrom.

('
3. That the documents filed along with the accompanying statement of

counter claims are either original or. copies of the respective original
(t
documents.
()
(1

() DE~NT
6fi I "'I >ii cl { WIT
c,,
~:.,.,
VERIFICATION: = Kameshwar Jha
lliml'illq; {'fflil, ~ = )
Add!. General Manager (ME)
' 1[-12"\<i\m - sr.,1NTPC - Barh

It is verified on the _lj Ja~lof7i'~!nhary, 2017 at New Delhi that th~ contents
of the aforesaid affidavit are true and correct on the basis of my knowledge and

belief. It is stated that nothing material has been concealed in the aforesaid

affidavit.

. .,
€.,... ;,~,
:·

. .,
( 2f:i I"'I ¾' e; < WIT
" Kameshwar Jha
ill'« llffi'i'l'n ( 'lifi:ri; ""1im )
Add!. General Manager (ME)
1(,iltjml - 'lfi;iNTPC - Barh
(",
' .

' ,

( ',. '
( ..
lFf tt rff rft ffetfflds
{'lffil'ffl1ffl'ifil'3"01,)
\ ..
NTPC Limited
(A Gavemmellt of India Enterprises)

<ITG: / Barh
~,t ffl ! Ref Na. · ~ I Date
D·
l '.

(
..
r,
-4400/llarh/G G M/2017 06.02.2017

TO WH0~1SOEVER IT MAY CONCERN

This is to inform that Sh. Kamcshwar Jha, Additional General ~fonagcr.(!vlecha1iica!J,

has been authori2ed to file Statement of Defonse, Counter Claim etc for and on belrnlf of
( ....... . NTPC Ltd 13arh STPP towarxb Arhim:nion between JSC TECHNOPROiv!EXPORT and
NTPC Barh STPP for "Contra~t for Main Plant Pad,1ge Part A (Stemn Oenerntor and
r:·.·.
~· Auxiliaries) vide LOI\ No. CS-9558-102-FC-COA-4520. CS-9558-102-2-CS-COA-
452 I and CS-9558-102-FC-C0,\-4520. CS-955S- I02-2-CS-COA-4522 all dated
14.03.2005 before the i\rbitml Tribunal Comprising of llON'Bl.E MR. CHIEF
C JUSTICE R. C. L.MlOTI. IION'llLE DR. Jl:STICF .\RlHT PAS!\Y,\T & HON'BLF
MR. JUSTICE DEEPAK VFR\IA. \
( ,,_/
r,,'t~~-~
I llala_1i \ycngnrl
(, Group G1.·tU."t~I iH,rn1tger
For and beh:df of NTl'r: L1<l. llarh STPP

(,
(' .
\. .
~<'!'Rm=~. 1::t.rr ,
<llR , 'IT<I, =- 803,1s ~ V'fl1! , 06132-240011112 ,t;,m , 06132-uooio. 240014/240067
Barh Super Thermal Po...,, Proiect, P0>!: Barh. Distrid. Patna. 803215 (Bihar) Phone 06132-240011/12 Fax 06132-240010. 240014(,140067
~ ~ : l"llMllft ~- ~ ~ . l f«l;;.<\!i'l>I dloT, lll<lt iii. 'II ~-l/ R&gd. Off.: ITTPC hwa1 Scq,e~. ,,,.._ l<e.e. lochllool. ,...o.,,.;
 BEFORE THE ARBITRAL TRIBUNAL COMPRISING OF
HON'BLE R.C. LAHOTI (Former Chief Justice oflndia),
HON'BLE DR. AR!JIT PASAYAT (Former Judge, Supreme Court of India) &
HON'BLE DEEPAK VERMA (Former Judge, Supreme Court of India)

AND IN THE MA TIER OF:

Mis JSC "TECHNOPROMEXPORT'' ... CLAIMANT

VERSUS,

Mis NTPC LIMITED ... RESPONDENT/ COUNTER CLAIMANT

KNOW ALL to whom these presents shall come that we, the abovementioned
RESPONDENT/ COUNTER CLAIMANT, hereby appoint,
('
AUGUST LEGAL, S-553, (LGF), GK Part-II, New Delhi -110048 which shall
include the names of the advocates working therewith namely, Mr. Barunesh
Chandra (D/2240/1999), Mr. GK Mishra (D/1151/1998), Ms. Madhumita
Bbattacharjee (012674/1999), Ma. Monika Singh (D/124912016) and Mr. Ayandeb
Mitra (D/1289/2016) hereinafter called the Advocatels to be our Advocate in the above
noted matter and authorize them:-
··.,
( '
J To represent, ac~ appear and plead in the above noted matter before the Hon'ble
Tribunal/Court(s) or in any other Authority/Court in which the same be tried or heard and
(; also in the appellate, courts;
To sign, file, verify and present representations, pleadings, replications, appeals, cross-
objections, or petitions for execu~ion, review, revision, restoration, withdrawal,
compromise and to file replies to petitions, objections or affidavits as may be deemed
necessary or proper for the prosecution of the said case in all its stages;
To file and receive documents;
To take out executions proceedings;
To deposit, wilhdraw and receive monies~ cheques and amounts, refunds of courts fees
,. •,
(, . . etc.j and grant receipts thereof and to do all other acts and chings which may be necessary
to be done for the progress and io the course of the prosecutions o[the said case;
To appoint and instruct any olher legal practitioner authorizing him to exercise the
powers and authorities hereby conferred upon the advocates whenever he/they may think
fit to do so and to sign the power of attorney on my/our behalf;

AND I, the undersigned do hereby agree to ratify and confinn all acts done by the
advocate.or his/their substitutes in the matter as my/our own act/s, as if done by me to all
intents and purposes;

IN WIWESS WHEREOF [ do have unto set my hand to these presents the contents of
(_, . which have been understood by me on this 6'h day of January, 2017.

CLJENT
(;

(12) ~
Kameshwar Jha
°'IBTh~tf<:ii (9ffl Tcm:A)
31tf{
Addl. G~neral M.Jriager (iv':C)
t('Rl,ni\- cn.1NTPC • 82:··,
'

()
{ .-..'·
~~.