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Supreme Court of India 2019-05-27 partly_allowed

Parsa Kente Collieries Limited vs Rajasthan Rajya Vidyut Utpadan Nigam Limited

Bench: 2 — M.R. Shah

In Brief

A coal supplier sought arbitration over disputes with a power utility regarding price escalation, fixed costs, and escrow account deductions under a coal mining and delivery agreement. The arbitrator awarded relief on all three claims. The High Court set aside the award, holding it violated public policy. The Supreme Court partially allowed the supplier's appeal, restoring the price escalation award while upholding the High Court's decisions on fixed costs and escrow accounts. The Court held that the arbitrator's interpretation of the commencement date for price escalation was plausible and reasonable, and courts cannot interfere with arbitral awards merely because an alternate interpretation was possible, absent clear public policy violation.

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Arbitration Contract Interpretation Coal Supply Agreement Price Escalation Public Policy Award Set-aside

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