In Brief
A power company contracted with ANSALDO to refurbish thermal units, furnishing bank guarantees. The Board later claimed breach of contract and invoked the guarantees. ANSALDO disputed this, citing the Board's own breach—failure to provide a Letter of Comfort and misrepresentation about the plant's operating capacity (120 MW). An arbitral tribunal found in ANSALDO's favour. The Supreme Court upheld the award, finding the Board's misrepresentation on capacity and breach of the Letter of Comfort condition justified contract avoidance. However, the Court modified the award: ANSALDO was not entitled to refunds for the advance payment guarantees (which the Board had actually paid), only for the performance guarantee. The appeals were dismissed with this modification."
The lawyer headnote and full judgment text are available to registered users.