Calcutta High Court Upholds Arbitral Award, Orders West Bengal To Pay Over Rs. 2000 Crore To Claimant
Date
7/16/2024 2:21:31 PM
(MENAFN- KNN India)
New Delhi, Jul 16 (KNN) In a significant ruling, the Calcutta High Court has dismissed a petition by the West Bengal government and West Bengal Industrial Development Corporation (WBIDC) challenging an arbitral award favouring Essex Development Investments (Mauritius) Limited, a part of The Chatterjee Group (TCG).
The court directed the state government and WBIDC to deposit the full awarded sum of Rs. 20,63,03,87,848.50, which includes interest accrued until April 30, 2024.
This amount is to be paid within six weeks, with 50 per cent as a direct transfer and 50 per cent as a bank guarantee.
The High Court found no merit in the state's claims of fraud or corruption in the arbitral process. It noted that the tribunal had considered all submissions and that the state failed to demonstrate any loss due to the GST regime.
The dispute stems from a 2014 Share Purchase Agreement (SPA) between the state entities and Essex, promising financial incentives to Haldia Petrochemicals Limited (HPL).
These incentives, originally granted under a 1999 state scheme, were to continue even after the implementation of the Goods and Services Tax (GST) in 2017.
When the state stopped payments post-GST, Essex initiated arbitration proceedings. The arbitral tribunal ruled in Essex's favor, directing the continuation of incentives up to Rs. 3,285.47 crores.
This ruling underscores the enforceability of arbitral awards and contractual obligations, even in cases involving state governments and policy changes.
(KNN Bureau)
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