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Patel Engineering Ltd. v. North Eastern Electric Power Corporation Ltd. (NEEPCO)

Special Leave Petition (Civil) · 2020 INSC 403Decided 22 May 2020
Special Leave Petition (Civil) Nos. 3584-85 of 2020
Justice R. Banumathi · Justice Indu Malhotra · Justice Aniruddha Bose

Background

Patel Engineering had won arbitral awards against NEEPCO over extra payment for transporting construction material ("extra lead") on a hydro project in Meghalaya. The High Court set aside those awards on appeal, and the Supreme Court had already dismissed Patel Engineering's challenge to that decision once. Patel Engineering then asked the High Court to review its own judgment, arguing it had wrongly applied arbitration law that was later changed by a 2015 amendment; the High Court refused, and Patel Engineering again came to the Supreme Court.

Decision Breakdown

The Supreme Court dismissed the special leave petitions, holding that once it had already heard and rejected a full challenge to the High Court's main judgment, a petitioner cannot reopen the same issues by separately attacking the order that rejected a review petition. The Court also agreed on the merits that the arbitral award was "patently illegal" because the arbitrator ignored key contract clauses and effectively rewrote the contract, resulting in a payout that would have unjustly enriched the contractor at the public exchequer's expense by roughly Rs. 1,000 crore. It held that courts can interfere with an arbitral award where the arbitrator's interpretation is one no reasonable person could reach.

Lesson Learnt

Once the Supreme Court has heard and rejected a full appeal on the merits, a party generally cannot get a second bite by challenging a later order that merely refused to review the original High Court judgment.

Official source (sci.gov.in)View Judgment (PDF)

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