9911796707
TMI Blog2019 (4) TMI 1927X X X X Extracts X X X X X X X X Extracts X X X X ..... , it was clear that the Respondent was fully aware that the Cash Flow contained several assumptions which were not communicated to the Claimant. The Arbitral Tribunal, rendered a finding that the Cash Flow Statement and the Revenue Calculations could not be taken as representing true and correct situation/facts or representing a probability of generation, if not actual generation. Such misrepresentation was purposely made by the Respondent knowing that such representation was not true, only with a view to induce the Claimant to enter into the Supply Agreement. It is also held by the Arbitral Tribunal that such misrepresentation, concealment and suppression of facts were made by the Respondent knowing that they were not true, with an intention to induce the Claimant to enter into the Supply Agreement - Arbitral Tribunal summarised the reasons for arriving at the conclusions that the Respondent had not made negligent misrepresentations, but also committed fraud on the Claimant. It is proved that the misrepresentation made by the Respondent was fraudulent. The Arbitral Tribunal also rendered findings in 39.11(xii) that various necessary information and documents required for the purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e majority Award, the ArbitralTribunal held that the Supply Agreement was vitiated by fraud and misrepresentation committed by the Respondent on the Claimant with an intent to induce the Claimant to enter into the Supply Agreement. The case of the Claimant thus falls under Sections 17, 18 and 19 of the Indian Contract Act. The effect of fraud was not absolutely to avoid a contract induced by it, but to render it voidable at the option of the party defrauded and had selected to avoid it. Admittedly, in this case, the Respondent had not furnished all the requisite information to the Claimant when the Supply Agreement was executed. The Claimant had repeatedly called upon the Respondent to furnish copy of the said missing page, however, the Respondent refused to supply the said missing page. The learned Senior Counsel for the Respondent categorically urged before this Court during the course of argument that though the said page was missing in the Supply Agreement entered into between the parties, the Respondent had rightly refused to comply with the request of the Claimant for furnishing copy of the page No.9 of the Supply Agreement - the Arbitral Tribunal has rightly rendered a findi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... poses, even today. In my view, for a rescission to operate, has to be express and unequivocal, which is missing in this case. Merely because it was urged by the Claimant in the Statement of Claim that it was entitled to the rescission of the contract, that would not mean that there was rescission of the contract, as sought to be canvassed by the learned Counsel for the Respondent - The Claimant had clearly exercised the option to press for Claim B on the basis of the ongoing contract, which election was clear, categorical and was conveyed to the Respondent during the course of arbitration proceedings. It is not the case of the Respondent that the Respondent had rescinded or terminated the contract with the Claimant. Since the Respondent had committed fraud upon the Claimant, the Respondent could not have even otherwise placed reliance on Clause 9.3 or other provisions of the contract in support of the submission that the claim made by the Claimant was contrary to the said provisions. A party who commits a fraud on another party to the contract, cannot seek reliance on a provision so as to take legal undue advantage of such provision. The parties before the Arbitral Tribunal sometim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g up of Wind Farm Projects at the locations situated in the States of Maharashtra and Tamil Nadu. The NEG Micon was globally acquired by the respondent's global holding company i.e. Vestas Wind System As. The Respondent i.e. Vestas Wind Technology (India) Private Limited took over the final negotiation with the Claimant and executed the contracts. 4. It was the case of the Claimant that business plan consisted of setting up around 1000 MW of capacity over the next three years. During the said period, the Claimant began the exercise of identifying an appropriate developer who could assist the Claimant in setting up Wind Farm Projects in accordance with the business plan of the claimant. The Respondent represented itself to be a part of the Respondent group which was a world leader in the wind energy business having extensive expertise and exposure in installation of WTGs across the globe. 5. It is the case of the Claimant that the Respondent further represented that it would offer "Turnkey Solutions" for Wind Farm Projects and that the Respondent group had one of the best Research and Development Centers in the world and also had widest range in terms of both technology and ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent itself. It is the case of the Claimant that the Respondent had repeatedly represented, persuaded and finally prevailed upon the Claimant to set up its Wind Farm Project at Gude-Panchgani site which according to the respondent, was the most ideal location to propose Wind Farm Project of the Claimant from amongst those available. 8. It is the case of the Claimant that the initial offer made by the Respondent included supply, erection and commissioning of 14 WTGs of 1.65 MW each aggregating to 23.1 MW, based on a design and technology which has an operational history of more than 4 years internationally and 2 years in India at a value of approximately ₹ 155 crore. The estimated average annual generation for the Wind Farm Project was projected by the Respondent at 49.71 lakh KWh per WTG (gross) at LCS corrected to park efficiency and air density. The Respondent was to carry out the operations and maintenance of Wind Farm Project to ensure that the Wind Farm Project operates in an efficient manner on a long term. The Respondent had also made various other suggestions in the said initial offer. 9. On 24th November 2006, the Respondent submitted its final offer setting ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent had made specific and categorical representations regarding the estimated energy output and its global credentials and achievements, particularly its achievements in India etc. in the said offer letter dated 24th November 2006. 12. The relevant paragraph of the said offer letter is extracted as under : - "Estimated Generation: The estimated average annual generation (Gross) at Local Control System (LCS) is 49.71 lakhs per WEG corrected to Park Efficiency and Air Density." 13. It is the case of the Claimant that the Respondent group being the global leader in Wind Power Energy and with its credentials, the specific representations made regarding the estimated generation by the Respondent were accepted by the Claimant as 'genuine and reliable estimation' and the Claimant proceeded to execute the contracts with the Respondent relying on and included by specific representations of the respondent. 14. It is the case of the Claimant that after receiving the cash flow projections of the respondent, the Claimant carried out its financial analysis and calculated its revenue projection on the basis of average generation output given by the respondent. As per assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tractual commitments. The Claimant was shocked and disappointed to discover that the actual generation levels of the WTGs consistently fell far short of the estimated annual average generation levels of 49.71 lakh Kwh per WTG per annum (gross) at LCS projected by the respondents. The respondents sought to clarify that the monthly generation profile of any site was not uniform and it would not be correct to compare the month to month generation with the pro-rata figure derived from annual energy generation estimates. The Claimant therefore asked for the monthly generation profile for the particular Wind Farm Project based on the wind resource assessment carried out by the respondents. 19. It is the case of the Claimant that even on the basis of comparison of the figures for the full year, the total average annual generation per WTG (gross) achieved by the project of the Claimant for the entire one year from 1st April 2007 to 31st March 2008 of operation was only 27.41 lakh Kwh against the projected generation of 49.71 lakh Kwh per WTG per annum (gross) at LCS. 20. It is the case of the Claimant that day-to-day estimated annual gross generation was higher than actual annual gross g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aining the said Wind Farm Project. The Respondent represented that it had the experience and expertise at its disposal to make the generation estimate. 24. The Respondent vide its e-mail dated 14th May, 2007 claimed that it had carried out estimation of generation in a wind park by factoring in effective losses of 22% while other players in the industry considered only 7% losses so as to make the IRR figure more attractive on paper. The Respondent sought to convey that its generation estimates were safe conservative estimates. The Respondent proposed that the Claimant should engage M/s.Garrad Hassan and Partners Limited, an internationally reputed wind energy consultant to validate the projections. It was strongly recommended by the Respondent that the said consultants were having technical skill and experience in the field. The Claimant received the said report of the said M/s.Garrad Hassan and Partners Limited titled 'Assessment of Energy Production of the operating GudePanchgani Wind Farm' dated 28th September, 2007. 25. It is the case of the Claimant that it was sought to learn that the generation estimates of Respondent were overstated by around 34%. The said GH repo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o get an independent expert opinion on the energy generation estimates and consulted another internationally well reputed wind energy consultant 'Tripod Wind Energy ApS, consulting Engineers' and assigned the work of independently verifying the energy generation estimates of the respondent. It is the case of the Claimant that the Claimant supplied the same set of data, which was made available by the Respondent to the Claimant for submission to M/s.Garrad Hassan and Partners Limited to Tripod Wind Energy ApS, consulting Engineers. 30. It is the case of the Claimant that the said report further reconfirmed the fact that the energy generation estimates given by the Respondent for the Wind Farm Project were grossly overstated. The average annual energy generation level projected by Tripod per WTG was very close to the average annual energy generation level projected by M/s.Garrad Hassan and Partners Limited. It is the case of the Claimant that the said Tripod report not only re-confirmed the stand of Claimant and M/s.Garrad Hassan and Partners Limited but also confirmed the fact that there were glaring discrepancies in the calculation of the average annual energy generation e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e future for 20 years. It was contended that the Respondent was liable to pay the compensation to the Claimant for the loss suffered by it due to the under performance of the Wind Farm Project set up by the Respondent and huge capital investment being locked up for 20 years. The Claimant craved leave to lead appropriate evidence for assessment of such loss/damages. The Claimant has also prayed for the legal cost. 34. On 27th July, 2008, the Respondent filed a counter statement before the arbitral tribunal denying the claims made by the claimant. It was contended by the Respondent that the project had already been completed and handed over to the Claimant and that the Claimant had unconditionally accepted the performance by taking over the wind farm and it was not entitled to rescind the contract and seek the wheel to be put back in the position prior to the agreement. The Claimant filed rejoinder to the said claimant's statement filed by the Respondent on 11th September, 2006. Both the parties led oral evidence before the arbitral tribunal and also filed written submissions before the arbitral tribunal. 35. Two members of the arbitral tribunal i.e. Shri Justice J.K.Mehra (Ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Claimant replied that since the supply by September was not possible and since the gap in expectations was too high, the Claimant called off on going negotiations. 40. On 24th November, 2006, the Respondent made final offer which according to the Respondent included that no long term data for wind was available. The Respondent had not taken into account seasonal variation between different years and thus there would be variation from year to year estimated generation would be 44.86 KwH per WTG after applying various correction factors. The said figure did not include line loss of 4% (assumed but not guaranteed) and also did not constitute any guarantee. It was made clear by the Respondent that various benefits which would accrue to the Claimant by setting up the wind farm were set out in the offer. 41. It is submitted by the learned Senior Counsel that in spite of various qualifications and disclaimers made by the respondent, the Claimant vide its letter dated 27th November, 2006 informed the Respondent of their desire to proceed with the contract. On 29th November, 2006, the Claimant sent an email to the Respondent fixing a meeting for reviewing the offer along with local a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... approach". It is submitted that the business common sense cannot be used to ignore the express terms of the contract, especially when the surrounding circumstances at the time of entering into the contract clearly establishes that the Claimant had voluntarily assumed the risk of the terms with the knowledge that the Respondent did not guarantee regarding generation of wind energy. There was an inherent uncertainty in wind generation. 45. Learned Senior Counsel for the Respondent placed reliance on an email dated 7th March, 2007 from the Respondent to the Claimant suggesting M/s.Garrage Hassain and presently as an independent consultant for validating generation figures in view of the fact that the Claimant was unhappy with the energy generation. ON 28th September, 2007, the said consultant submitted a report. The Respondent also placed reliance on the report prepared by RISO in the month of February, 2009. 46. Learned Senior Counsel placed reliance on clauses 7.1, 8, 9.2, 9.3 and 10 of the supply agreement entered into between the parties. He submits that the Respondent had only given an estimate to the Claimant and had not given any guarantee. The liability, if any, of the Resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ward thus lacked a judicial approach. The Respondent was not given any opportunity to address the case under section 19 of the Indian Contract Act, 1872 at all. 50. It is submitted by the learned Senior Counsel that the written submissions filed by the Respondent before the arbitral tribunal would clearly indicate that it was specially contended by the Respondent that the Claimant had not made any legal basis of its alternate claim cleared even at the stage of final arguments and that alternate claim was being treated as the claim of contractual damages. He submits that the arbitral tribunal had directed both the parties to submit the written submission simultaneously. Only in its written arguments, the Claimant had come out with a case that the alternate claim was on the basis of Tort of deceit. In support of this submission the learned Senior Counsel relied upon above referred paragraphs of the majority award and would submit that those paragraphs would also clearly indicate that the damages were sought for by the Claimant under the head of "loss suffered" and not on the basis stated in section 19 of the Indian Contract Act, 1872. 51. Learned Senior Counsel placed reliance on p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18th December, 2011 the Claimant had not pressed the reliefs in terms of prayer clause (A). He submits that the Respondent thus could not have dealt with any submissions in the rejoinder on applicability of section 19 of the Indian Contract Act, 1872 at the stage of sur-rejoinder. He submits that in any event even if section 19 of the Indian Contract Act, 1872 would have been attracted, for the purpose of considering and allowing the claim for damages, the principles of section 73 of the Indian Contract Act, 1872 would still apply. 56. Learned Senior Counsel placed reliance on the judgment delivered by House of Lords in case of Johnson & Anr. vs. Agnew (1980) A.C. 367 and in particular at page 298 in support of the submission that alternate claim could not be pressed at the stage of rejoinder arguments by the claimant. 57. Learned Senior Counsel distinguished the judgment of the Queen's Bench reported in (1976) QB 801 which was relied upon by the Claimant before the arbitral tribunal. He also placed reliance on the statement of claim filed by the Claimant and would submit that in the facts and circumstances of this case, reliance placed by the arbitral tribunal in the majori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... execution of formal contract and also in the meetings held between the parties, the arbitral tribunal erroneously proceeded on the premise that the Respondent had issued a guarantee in favour of the Claimant for a particular generation of the guaranteed energy. The award shows patent illegality on this ground. In support of this submission, learned Senior Counsel placed reliance on paragraphs 46.3, 46.4, 46.5.1, 46.6 and 48.7 of the majority award. He also relied upon clauses 9.1 to 9.3 of the supply agreement and would submit that the last line of clause 9.3 could not become repugnant to the earlier portion of the said clause or even clause 9.1. Clause 9.3 had elaborated clause 9.1 and was part of the whole system. He led emphasis on clauses 9.3 (b) to (d) of the supply contract. 62. Learned Senior Counsel placed reliance on clauses 9 and 10 of the supply agreement and condition no.81 of Orgalime S.E. 94 of supply contract and also various paragraphs i.e. from 46 to 48.7 of the majority award and would submit that the arbitral tribunal has erroneously held that those provisions were un-workable and inapplicable in cases of damages or fraud. The arbitral tribunal has read estimat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould amount to misrepresentation is ex-facie perverse and irrational. 66. Learned Senior Counsel placed reliance on paragraph 32.1.5 of the majority award and would submit that though the Claimant had not examined Mr.Richard Whiting, who had allegedly checked the report dated 28th September, 2007 submitted by M/s.Garrage Hassain, the arbitral tribunal considered the said report dated 28th September, 2007 erroneously and has awarded the claim for damages also based on the said report, which was not substantiated or proved. Learned Senior Counsel placed reliance on the judgment delivered by Lord Clarke in case of Rainy Sky S.A. & Ors. vs. Kookmin Bank, (2011) UKSC 50 and more particularly paragraph 16 on the issue as to how a contract has to be interpreted by a Court or the arbitral tribunal. 67. Learned Senior Counsel strongly placed reliance on clause 18of the supply contract in support of his submission that the said clause clearly provided that the said contract superseded all the past correspondence. He also placed reliance on the judgment of the Hon'ble Supreme Court in case of Nabha Power Limited (NPL) vs. Punjab State Power Corporation Limited (PSPCL) & Anr., (2018) 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on clause 71 of the supply agreement and would submit that clause 9.3 of the supply contract could not be clubbed with clause 71 and clause 10 of the supply contract. Clause 9.3 qualify clauses 9.1 and 9.2 and thus could not be repugnant to clauses 9.1 and 9.2. It is submitted that the correspondence exchanged between the parties clearly indicated that the Claimant had demanded guaranty from the Respondent which was refused by the Respondent specifically. 71. Learned Senior Counsel distinguished the judgment of the Privy Council in case of Forbes vs. Git & Ors. (1921) SCC OnLine PC 102 which was relied upon by the Claimant and considered by the arbitral tribunal on the ground that the clauses under consideration of the Privy Council in the said judgment were totally different. Learned Senior Counsel distinguished the judgment of the Supreme Court in case of Radha Sundar Dutta vs. Mohd. Jahadur Rahim & Ors., AIR 1959 SC 24 which was relied upon by the Claimant and followed by the arbitral tribunal on the ground that clause 9.3 in this case is not an independent clause but was part of clauses 9.1 and 9.2 which clauses were totally different than the clause under consideration of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the Claimant at all. 75. Learned Senior Counsel placed reliance on the judgment of the Chancery Division in case of Mills vs. United Counties Bank Limited (1910) 1 Ch. 281 in support of the submission that in that case, there was express indemnity. Learned Senior Counsel for the Respondent placed reliance on the judgment of the Hon'ble Supreme Court in case of Rajasthan State Mines & Minerals Ltd. vs. Eastern Engineering Enterprises & Anr. (1999) 9 SCC 283 and in particular paragraph 44(h) and (i) in support of the submission that the arbitral tribunal cannot disregard the terms of reference or terms of contract and cannot act arbitrarily, irrationally, capriciously or independently of the contract. 76. Learned Senior Counsel for the Respondent placed reliance on the judgment of the Hon'ble Supreme court in case of Security Printing & Minting Corporation of India Limited & Anr. vs. Gandhi Industrial Corporation, (2007) 13 SCC 236 and in particular paragraphs 14 and 16 thereof in support of the submission that the written contract entered into between the parties is binding and not the earlier offer and correspondence exchanged between the parties which would not be r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concerned, it is submitted that no case was made out by the Claimant under section 18 of the Indian Contract Act, 1872. The conditions thereof were not at all satisfied by the claimant. Learned Senior Counsel placed reliance on the finding rendered by the arbitral tribunal in paragraph 39.11(xiii)(d) of the majority award and would submit that the finding of the arbitral tribunal that both the parties were not equals in the field of wind energy is also perverse. The Claimant had already engaged several advisors and thus could not contend that the parties were not equals in the field of wind energy. The Respondent had sold the entire lot to the claimant. The finding of the arbitral tribunal that there was complete silence on the part of the Respondent is also ex-facie perverse. 81. Learned Senior Counsel placed reliance on the judgment of the Court of Queen's Bench in case of Smith vs. Hughes, Vol. VI 597 and more particularly at page 606 and would submit that since in this case the Respondent had categorically refused to provide further information and also to furnish the guarantee to the claimant, the arbitral tribunal could not have held that the Respondent was responsible a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal at their own have decided the claim by invoking section 19 of the Indian Contract Act, 1872 which is not permissible. 85. Learned Senior Counsel placed reliance on the judgment of this Court in case of Hemant Bhimrao Kalghatgi vs. Gururao Swamirao Kulkarni & Anr. (1943) ILR Bombay 55 and more particularly relevant pages at pages 67 to 70 in support of the submission that if a party has claimed inconsistent rights, he must elect which of them he is going to rely and having elected one right he is not allowed to retract his election. Learned Senior Counsel for the Respondent placed reliance on the judgment of the Madras High Court in case of R. Samudra Vijayam Chettiar vs. Srinivasa Alwar & Ors., (1969) L.W. 62 in support of the submission that if the contract survives for both the parties, both the parties have to perform their part of contract. 86. Learned Senior Counsel placed reliance on the judgment of the Hon'ble Supreme Court in case of Umabai & Anr. vs. Nilkanth Dhondiba Chavan & Anr. (2005) 6 SCC 243 and would submit that the judgment of the Hon'ble Supreme Court in case of Prem Raj (supra) has been followed by the Hon'ble Supreme Court in the said judgmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arbitral tribunal at page 418 of the arbitration petition forming part of the award is made by the arbitral tribunal on its own without any assistance from any party. Though the arbitral tribunal has rejected the evidence produced by the claimant, contrary to that, the arbitral tribunal has still awarded the claim for damages made by the claimant. 90. Learned Senior Counsel placed reliance on the judgment of the Hon'ble Supreme Court in case of Draupadi Devi & Ors. vs. Union of India & Ors. (2004) 11 SCC 425 and in particular paragraphs 76 and 77 in support of the submission that though the Claimant had not furnished any proof of the alleged damages suffered by the claimant, the arbitral tribunal contrary to the principles laid down by the Hon'ble Supreme Court in case of Draupadi Devi & Ors. (supra) has allowed the substantial claim of damages in favour of the claimant. 91. Learned Senior Counsel for the Respondent placed reliance on paragraph 56.2 of the majority award holding that the damages or the loss suffered by the Claimant was determined without taking into consideration various benefits set out in the earlier paragraphs of the award as damages were determined as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ough the arbitral tribunal had tried to suggest such exorbitant fees on account of meeting for discussion on five occasions, however, in realty, the arbitral tribunal had actually convened the discussion only on three occasions. The additional sum of ₹ 37.5 lacs has been thus levied and collected by the arbitral tribunal vide the proceedings dated 3rd December, 2014 for pronouncing the award after having finalized the same. Huge amount of fees had been exploited from the parties by the arbitral tribunal which has resulted in the Respondent loosing complete confidence in the arbitral tribunal to justify the dispute. The entire majority award thus deserves to be set aside on this ground itself. 96. On the issue of rescission of contract, learned Senior Counsel placed reliance on the judgment of the Andhra Pradesh in case of Kilaru Venkatasubbayya vs. Kalluri Padmalayamba & Anr. (1968) SCC OnLine AP 290 and in particular paragraph 15 and would submit that rescission must be express and unequivocal, whether it be by communicating the rescission as provided for in section 66, or bringing a suit to set aside the contract. The entire award is contrary to the principles rendered by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 007. He submits that all operations, including supply, erection, commissioning, maintenance and service of the said WTG's was the sole responsibility of the respondent. 100. It is submitted that the role of the Claimant was onlythat of an investor. The Respondent reiterated the supply agreement with estimate generation of 49.71 lakhs KWh/WTG/annum. The entire scope of the work included without limitation, evaluation of location potential based on wind resource assessment and energy production estimate ; site acquisition and transfer of land to the claimant, contour survey and micrositing, engineering, designing, manufacture, testing and supply of WTG's, foundation construction, etc. 101. It is submitted that the figure of 49.71 lakhs Kwh/WTG/annum estimated by the Respondent was a very perfect figure and was not approximately 49 or not approximately 50. It was the case of the Respondent itself that the estimate given by the Respondent was fair, reasonable and genuine. In support of this submission the learned Senior Counsel placed reliance on paragraphs 16 and 28 of the statement of defence filed by the respondent. 102. It is submitted that immediately upon commissioning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o furnish any further details including a copy of page no.9 of the supply agreement. He submits that only after execution of the supply agreement on 4th January, 2007, the Production Estimate dated 8th February, 2007 was furnished by the Respondent to the Claimant which it contained the said page no.9 which clearly showed that neither 14 WTGs, nor WEGs of the entire field could achieve the estimate of 49.71 lakhs. It is the case of the Claimant that the average of 14 WEGs was far less than farm average. 105. Learned Senior Counsel placed reliance on the cross examination of RW - 2, the witness examined by the Respondent and would submit that the said witness of the Respondent admitted that the average of 14 WEG the entire farm was only 49.29 lakhs KWh/WTG/annum. He submits that the said witness admitted that the gross annual energy generation of 14 turbines of the claimant, after taking into account wind direction shift, could only be 43.40 lakhs KWh/WTG/annum as against 49.71 lakhs mentioned by the Respondent in the final offer and supply agreement entered into between the parties. It is the case of of the Claimant that the computation shows that net annual average generation was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for each of the 24 turbines in the farm. It is submitted that the contents of page no.9 clearly proved that the estimate of 49.71 lacs Kwh/WTG per annum was false to the knowledge of the Respondent and was thus deliberately given by the Respondent only after the execution of the supply agreement between the parties. 109. It is submitted that on perusal of page no.9 of the supply agreement, it clearly showed that neither 14 WEGs nor the WEGs of the entire field could achieve the estimate of 49.71. Reliance is also placed on the reply to question nos.215, 216 and 222 of the witness (RW - 1) examined by the Respondent admitting that the average production estimate of 14 WTG's of the Claimant was about 5% lower than the average of the 24 WTG's in the wind farm. On the date of execution of the contract with the Claimant by the respondent, the balance 10 WTG's had already been sold by the respondent. The said table showed that the energy result of 14 WEGs of the Claimant was 66.95 GWH / annum. The average production of each WEG was arrived at by dividing 66.95 x 14 = 4.7 WGH/WEG/Annum which on conversion into KWH is 47.80 lakhs KWH/WEG/Annum. 110. Learned Senior Counsel pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en achieved. Reliance is placed on reply given to question no.168 by RW - 2 admitting that even that high wind period energy generation of the farm was only 45.29 lakhs KWh/WEG/annum. 113. Learned Senior Counsel for the Claimant submits that wind data of only a period of one year from 1st September, 2005 to 31st August, 2006 was used, whereas the witness examined by the Respondent (RW - 2) admitted in response to question no.320 that admittedly the period must be 4- 5 years to 10 years to make a long term estimate. He submits that though the Respondent had long term government wind data available with the Respondent from the year 1948, the Respondent refused to furnish such data to the Claimant though the Claimant had called upon the Respondent to furnish the same. Though the Respondent had itself installed a wind mast at the site in the year 2004, the mast installation report was not made available to the claimant. The Respondent made a false statement in its final offer that "the wind mast was installed during 2005 March". It is submitted that in clause 9.2 of the supply agreement, the Respondent again made a false statement that "long term data has not been available". He submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rely upon on the lowest of such admissions being item no.9 mentioned in the tabulated statement in the award and more particularly in paragraph 55.2. After deducting the correction factors as per clause 9.3 of the supply agreement, net annual production worked out by the Claimant at 29.73 lakhs KWh/WEG/annum. It is submitted that the average of various items mentioned in the table was rounded off by the arbitral tribunal to 31 lakhs Kwh/WEG/annum which is detrimental to the interest of the claimant. The Respondent thus could not challenge the said computation being beneficiary of the said finding of the arbitral tribunal. He submits that sections 17 and 19 of the Indian Contract Act, 1872 attracted to the facts of this case clearly. 117. It is submitted by the learned Senior Counsel that the arbitral tribunal has after appreciating the oral and documentary evidence, the pleadings and the provisions of the contract have allowed the claims made by the Claimant partly though ought to have allowed the entire claim. The findings rendered by the arbitral tribunal in the majority award are not perverse and cannot be interfered with by this Court under section 34 of the Arbitration & Con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the majority award. He submits that if the faults were known to the seller, but such faults were not disclosed to the buyer and if it was found that the ship had defects and was not sea worthy, the seller cannot avail of stipulation that ship was sold on as is where is basis. He submits that the arbitral tribunal rightly placed reliance on the said judgment as the same was clearly applicable to the facts of this case. He submits that the learned Senior Counsel for the Respondent could not distinguish the said judgment which was relied upon by the Claimant and was considered by the arbitral tribunal. 122. Learned Senior Counsel for the Claimant placed reliance on the judgment of the Chancery Division in case of Carlish vs. Salt (1906) Ch 335 at 340 in which it was held that the fraud apart, even where there was only concealment of a known fact by the defendant, it would be unconscientious for the defendant to insist upon availing themselves of any legal advantage they may have obtained by the contract. He submits that since the Respondent has committed fraud upon the Claimant at the time of entering into a contract, it cannot be allowed to exclude its liability arising out of suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontract. It is necessary to give business efficacy to the contract. It is submitted that when clause 9.1 gives a number, the same cannot be discarded by placing reliance upon clause 9.3 or use of word "estimate". Clause 9.1 cannot be rendered entirely meaningless. The Respondent had clearly assured generation of 49.71, the Respondent cannot be allowed to contend that they would not be liable for generation of 49.71 or that the same was not a guaranteed generation. It is submitted by the learned Senior Counsel that though the figure of 49.71 may not be guarantee, it is definitely a warranty. 126. Learned Senior Counsel placed reliance on the judgment of the Hon'ble Supreme Court in case of Transmission Corporation of Andhra Pradesh Limited & Ors. vs. GMR Vemagiri Power Generation Limited & Anr. (2018) 3 SCC 716 and in particular paragraph 26 and would submit that a commercial document cannot be interpreted in a manner to arrive at a result which is at a complete variance with what may originally have been the intendment of the parties. He submits that the submission of the Respondent that in view of clause 9.3, there was no guarantee furnished by the Respondent is concerned, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h at page 818 of the said judgment delivered by Lord Denning with regard to "collateral warranty". It is submitted that the Claimant had made its investment based on such collateral warranty furnished by the respondent. In this case, it was the case of deliberate misrepresentation to the knowledge of the Respondent made to the claimant. The Respondent was fully aware that the figure 49.71 was not achievable. 130. It is submitted by the learned Senior Counsel that Section 19 gives option to a party to either rescind or to perform the contract on the basis of representation made. The provisions of sections 17, 18 and 19 of the Indian Contract Act, 1872 are strongly relied upon by the learned Senior Counsel for the claimant. Insofar as the judgment in case of Oscar Chess Limited (supra) relied upon by the learned Senior Counsel for the Respondent is concerned, it is submitted by the learned Senior Counsel for the Claimant that the said judgment would assist the case of the Claimant and not the respondent. He placed reliance on a paragraph at page 375 of the said judgment. He submits that in the said judgment it is clearly held that when the seller states a fact which is or should be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9, the Respondent blatantly refused to share the said document which was found crucial for the purpose of taking any decision by the Claimant whether to enter into any such contract with the Respondent or not. He submits that the arbitral tribunal has rightly distinguished the said judgment in case of M/s.Alavi & Anr. (supra) in paragraph 49.11 of the majority award. 134. Insofar as the submission of the learned Senior Counsel for the Respondent that though the Respondent had cited the judgment in case of Riaffeisen Zentralbank Osterreich AG (supra) the same, been cited, has not been considered by the arbitral tribunal is concerned, it is submitted by the learned Senior Counsel for the Claimant that the arbitral tribunal rightly did not refer to the said judgment since the said judgment only contained general proposition with regard to misrepresentation and not with regard to estimate. He submits that in any event the said judgment even otherwise would not assist the case of the respondent. 135. Insofar as the submission of the learned Senior Counsel for the Respondent that the arbitral tribunal could not have considered the earlier clause prevailing over latter clause is concern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in case of National Highway Authority of India Vs ITD Cementation India Ltd. (2015) 14 SCC 21 and more particularly paragraphs 21 to 25 and the judgment reported in case of Swan Gold Mining Ltd Vs. Hindustan Copper Ltd. (2015) 5 SCC 739 and in particular paragraph 19. 138. It is submitted by the learned Senior Counsel that even if the clauses of the contract cannot be rejected for conflict, they were liable to be read down so as to give effect to the object and purpose of clauses 9.1, 9.2 and 9.3 of the supply agreement. In support of this submission, learned Senior Counsel placed reliance on the judgment of the Hon'ble Supreme Court in case of Skandia Insurance Company Limited vs. Kokilaben Chandravardan, AIR 1987 SC 1184 and in case of B.V. Nagaraju vs. Oriental Insurance Company, (1996) 4 SCC 647 which are dealt with by the arbitral tribunal in paragraph 47 of the majority award. 139. Insofar as the submission of the learned Senior Counsel for the Respondent that the arbitral tribunal has no power to read down any provisions of the contract is concerned, it is submitted by the learned Senior Counsel for the Claimant that the doctrine of reading down is also rule of cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estimate and the actual generation. In support of this submission, learned Senior Counsel placed reliance on paragraphs 13, 22, 24, 25, 28 to 32, 35 and 38 to 41 of the statement of claim filed by the claimant. He submits that the difference between the estimate and actual generation is a point that is common to both i.e. fact as to whether there was misrepresentation amounting to fraud as well as with regard to the quantum of damages under the second part of section 19 of the Indian Contract Act, 1872. It is submitted that the pleadings filed by the Claimant made it clear that the case of the Claimant was that of fraud under section 17 of the Indian Contract Act, 1872. 143. Insofar as the quantum of damages is concerned, learned Senior Counsel for the Claimant placed reliance on paragraph 42 of the statement of claim in support of his submission that the said paragraph makes it clear that the Claimant was seeking damages for fraud in terms of section 17 of the Indian Contract Act, 1872 in lieu of fraudulent misrepresentation. He refers to " head of claim - A" on page 83 "reference to head of Claim - B". He submits that head of claim - A was under the first part of section 19. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was not the claim in Tort nor was it a claim on the basis of rescission of contract as sought to be canvassed by the respondent. He submits that the said paragraph further refers to "loss" suffered by it due to the under performance of wind farm project set up by the Respondent and thus the said claim was under section 19 of the Indian Contract Act, 1872 being the difference between the estimate and actual generation. It is submitted by the learned Senior Counsel that though the quantum of such damages had not particularised in figures in the statement of claim while claiming damages, the amount is not required to be quantified as the quantification of claim is merely a matter of proof. In support of this submission, learned Senior Counsel placed reliance on paragraph 100 of the judgment of the Hon'ble Supreme Court in case of McDermott International Inc. vs. Burn Standard Company Limited, (2006) 11 SCC 181. 148. It is submitted that the computation of quantum of damages is nothing but a matter of mathematical subtraction. The Claimant had specifically pleaded that they are entitled to the difference between the actual and projected generation and at all time set out a table ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Respondent to the claimant. 152. Learned Senior Counsel submits that in the affidavit of evidence of CW -1 i.e. Mr.Deepak Asher, Director and Group Head (Corporate Finance) of the Claimant and more particularly paragraph 22-30 had clearly set out the proof of difference between actual and estimated generation. The said affidavit and more particularly paragraph 37 thereof had made the basis of claim - B explicitly and clearly. It was stated that in the alternate, the Claimant was entitled for damages that was suffered by it due to fraudulent, reckless / negligent misrepresentations and that the same was of recurring in nature. He submits that it was thus beyond the reasonable doubt hat the claim - B was made on the basis that the contract was on going and not on the basis of rescission. 153. Learned Senior Counsel submits that the said witness (CW - 1) examined by the Claimant was extensively crossexamined on all aspects by the respondent, including the difference between the actual and estimated generation, correction factor to be applied that would reduce the difference between the estimate and actual generated and which according to the Respondent would leave no differenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... full control over the actual metering by the Respondent and Maharashtra State Electricity Board. The witness examined by the Claimant i.e. CW - 1, at paragraph 16 of his affidavit in lieu of examination in chief had produced various documents evidencing actual metering of generation as Exhibit CW -1/9 collectively. Those documents included joint meter readings which were signed by the Respondent and also the Maharashtra State Electricity Board. The invoices were raised by the Claimant on the basis of the meter reading, the documents from the Respondent forwarding invoices of the Claimant to the Maharashtra State Electricity Board etc. 157. It is submitted that the samples of such joint meter reading reports, meter readings and energy break up, statement of MSEDCL, invoices of the claimant, letters of the Respondent forwarding invoices of the Claimant to the MSEDCL, receipts for payment to the Claimant etc. were produced before the arbitral tribunal. Learned Senior Counsel referred to and relied upon the answers of RW - 1 to the questions 99, 100 and 104 who admitted that the Respondent had knowledge as to actual energy generation each year by 14 WEGs of the Claimant since the date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 17th and 18th December, 2011, the Counsel for the Claimant had submitted that the Claimant was not pressing the relief under claim - A. 161. Learned Senior Counsel placed reliance on paragraph 3 of the minutes of hearing and would submit that the said paragraph would clearly show that thereafter the Counsel for the Respondent made his arguments in response and had completed the same on 19th December, 2011. He submits that thus even after claim - A was dropped, the Respondent had an opportunity and in fact did avail of the said opportunity to advance the arguments to oppose claim - B. Learned Senior Counsel placed reliance on paragraph 4 of the minutes of hearing and would submit that even the said paragraph would clearly show that at the end of day on 19th December 2011, the Counsel for the Respondent submitted that he had concluded his arguments. Both the Counsel thereafter made a request for time before the arbitral tribunal to file the written submissions which request was granted by the arbitral tribunal. The Respondent thus cannot be allowed to urge that it did not have an opportunity to advance the arguments in support of claim - B of the claimant. 162. Learned Senior Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld not be dealt with by the Respondent on that ground. Learned Senior Counsel for the Claimant invited my attention to paragraph 53 of the majority award and also paragraphs 45.2 and 45.3 and would submit that paragraph 53 of the majority award cannot be read in isolation but also has to be read with paragraphs 45.2 and 45.3 of the majority award holding that the Claimant had pleaded the case under second part of section 19 of the Indian Contract Act, 1872 and that the Respondent had sufficient opportunity to put forth its defence and lead evidence. 165. In so far as the quantification of the claim is concerned, it is submitted by the learned Senior Counsel that the basis of determination of damages under second part of section 19 of the Indian Contract Act, 1872 was nothing but a computation of difference between the estimate and the actual generation which was the matter of simple arithmetic. The Claimant had proceeded on that basis and was entitled to proceed on the basis that determination of damages under second part of section 19 was a matter of simple arithmetic. He submits that the claim made by the Claimant was absolutely clear with sufficient pleading and evidence. Both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1872 are attracted to section 19 of the Indian Contract Act, 1872. He submits that second part of section 19 is based on the performance of the contract and not on rescission of a contract. 168. Learned Senior Counsel for the Claimant invited my attention to various paragraphs of the statement of claim filed by his client and would submit that the Claimant had not rescinded the contract. It was only the averment in the statement of claim that the Claimant was entitled to rescission of contract. Till the arbitral tribunal would have decided to be rescinded, the contract remained in force. For a rescission of a contract to operate, there has to be express and unequivocal act of rescission. In this case, there was no rescission of contract. The contract was all through out on going contract. The Claimant had made an alternate claim on the basis of the on going contract. He submits that election must be clear, categorical and communicated. Until the same is done, the contract continues. . 169. Insofar as the judgment of the High Court of Australia in case of Sargent (supra) relied upon by the Respondent is concerned, it is submitted by the learned Senior Counsel for the Claimant that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence on claim A cannot be relied upon by the Claimant in support of claim B. 174. In so far as the judgment in the case of Lakshmijit Bhai Suchit Vs.Faiz Mohammed Khan Sherani (supra) relied upon by the Respondent is concerned, the said judgment is distinguished by the learned Senior Counsel for the Claimant on the ground that since the Claimant had not exercised right to elect till such rejoinder, the Respondent cannot be allowed to contend that the Claimant having prayed for claims A and B, the Claimant could not have been permitted to give up claim A at the belated stage. 175. In so far as the judgment of the Hon'ble Supreme Court in the case of Pt. Prem Raj Vs. DLF Housing and Construction Ltd. (supra) relied by the learned Senior Counsel for the Respondent is concerned, learned Senior Counsel for the Claimant distinguishes the said judgment on the ground that the said decision cannot be applied to the case under Section 19 of the Indian Contract Act, 1872. The Claimant had not rescinded the contract but had only prayed before the arbitral tribunal to rescind the contract. He submits that the contract entered into between the parties continued to be in force until it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich may not be fraud, unless the circumstances of the case is such that there was a duty to speak or where his silence is itself equivalent to speech. He submits that where there is a mere silence and there is no duty to speak, it could be said that there is no fraud. However, in the facts of this case, the Respondent categorically and clearly stated that the estimated generation is 49.71 lakh KWH/WTG/annum and that the said estimate was fair, genuine and reasonable thereby inducing the Claimant to execute the agreement with the respondent. 179. It is submitted that the Respondent could not establish before the arbitral tribunal that the estimate of the Respondent was fair. These submissions have been dealt with by the arbitral tribunal in paragraphs 39.11(xiii) (a) to (f) and has rightly held that this case was a case of active misrepresentation by the Respondent and thus the explanation to Section 17 was not applicable. He submits that the Claimant was a new entrant in the business of wind energy and had no knowledge about the wind data pertaining to the site. Both the parties were not equals in the field of green energy and, thus it was a duty on the part of the Respondent to d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f wind energy. 183. In so far as the submission of the Respondent on the issue of mitigation of damages is concerned, it is submitted by the learned Senior Counsel for the Claimant that there was no question of mitigation of damages in this case. The second part of Section 19 of the Contract Act is based on performance of contract and not rescission of the contract and thus the principles of Sections 73 and 74 of the Indian Contract Act, 1872 have no application. The arbitral tribunal has only awarded the difference between the actual generation and estimated generation which benefit even otherwise the Claimant was entitled to. 184. In so far as the submission of the Respondent that the arbitral tribunal could not have relied upon the evidence of RW.2 and CW.2 which evidence had been rejected by the arbitral tribunal is concerned, it is submitted by the learned Senior Counsel for the Claimant that in paragraph 34.11.3 of the majority award, the arbitral tribunal has held that the tribunal was left with no definite conclusion from the reports made by the experts to come to any definite conclusion. The said reference was to the prearbitration "reports" and not to the "evidence" of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned Senior Counsel that the Respondent in fact opposed the application of the Claimant for substitution of its name as the claimant. The order for substitution of the claim of the Claimant was ultimately passed only on 1st July 2014 whereas the arbitral award came to be passed in little over one month thereafter. There was delay in publication of the award in view of the Respondent opposing the application of the Claimant for substitution of its name as the claimant. The Respondent did not raise any such objection during the course of the arguments of the proceedings. He submits that it was the Claimant which requested the arbitral tribunal to expedite the matter from time to time. He relied upon various documents in Volume 2 in support of this submission. The Respondent however, took chance to see whether the award was in its favour and after having found that the majority award was against the respondent, has raised such frivolous objection. 189. In so far as the fees of the arbitral tribunal is concerned, it is submitted by the learned Senior Counsel for the Claimant that the Respondent never objected to the arbitrator's fees during the course of the proceedings. The Clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submit that the supply of contract, erection, maintenance and operation contract has already been worked out. The subsequent maintenance contract is still in operation. He submits that the contract is kept alive since the Respondent has agreed to keep the contract alive. He placed reliance on the Anglo Indian Course and would submit that Section 19 of the Indian Contract Act, 1872 is identical and is pari materia with the case of the Anglo Indian Course. He submits that it was the duty of the claimant, let the Respondent must know that the payment was insisting for performance of contract which the Claimant is failed in this case. He placed reliance on pages 81 to 84 of the statement of claim and would submit that it was the alternate claim of the Claimant that the Claimant was not exercised the right to perform the contract. He reiterated some of his submissions already made earlier and would submit that there was complete lack of opportunity granted to the Respondent by the arbitral tribunal. Learned Senior Counsel for the Respondent placed reliance on written argument of the Respondent before the arbitral tribunal and more particularly at page 65 thereof. He submits that the Cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment, later clause has qualified the earlier clause and thus the earlier clause would not prevail over the later clause. 199. Learned Senior Counsel for the Claimant distinguishes the judgment of the Hon'ble Supreme Court in the case of Nabha Power Limited (NPL) Vs.Punjab State Power Corporation Limited (PSPCL) & Anr. (supra). He invited my attention to paragraph 49(5) in support of the submission that if the terms and conditions of the contract are expressed and clear, no other interpretation by the Court or arbitral tribunal is permissible. 200. Learned Senior Counsel for the Respondent distinguishes the judgment of the Hon'ble Supreme Cort in the case of Transmission Corporation of Andhra Pradesh Limited & Ors., (2018) 3 SCC 716 in support of the submission that the terms and conditions of contract has to be read together. He placed reliance on paragraphs 18, 19 and 21 of the said judgment. 201. In so far as the submission of the learned Senior Counsel for the Claimant that the Respondent had not supplied a copy of missing page 9 of the contract to the Claimant for substantial period of time is concerned, it is submitted by the learned Senior Counsel that the Res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me of the paragraphs in the statement of claim and findings rendered by the arbitral tribunal in the impugned majority award. She placed reliance on the final offer letter dated 24th November 2006 issued by the Predecssor-in-Interest of the Respondent in support of the submission that the estimated average annual generation (gross) at the Local Control System would be 49.71 lakh per WEG corrected to Park Efficiency and Air Density. She submits that according to the said representation, the correction factors to be applied was 44.86 lakhs per WEG per annum. 207. Learned Senior Counsel placed reliance on the final offer letter which included the Technical Specifications and Cash Flow Statements and would submit that the said technical specifications categorically noted that the calculated lifetime of the WEG would be "20 years." The Cash Flow Statement represented the proposed income of the Claimant from the project for the period of "20 years." Based on such representation made by the Respondent in the final offer dated 24th November 2006, the Claimant entered into the Supply Agreement dated 4th January 2007. She placed reliance on clause 1.1 of the Supply Agreement and would submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndings rendered by the arbitral tribunal. It is submitted that the conclusion drawn by the arbitral tribunal is contrary to the findings rendered by the arbitral tribunal in so far as the rejection of claim for compensation for a period of 20 years is concerned. The arbitral tribunal has restricted the claim for compensation only for a period of approximately 6.5 years though the Claimant had suffered losses and would operate and incur the loss for the entire period of 20 years. The impugned award to that extent is grossly unfair and unreasonable. 211. Learned Senior Counsel for the Claimant submits that the impugned findings rendered by the arbitral tribunal while rejecting the claim for compensation for a period of 20 years deserves to be modified to this extent and the claim for compensation of balance period deserves to be granted. 212. In response to the query raised by this Court as to whether this Court while entertaining the petition under Section 34 of the Arbitration and Conciliation Act, 1996 can make an award and allow the claims rejected by the arbitral tribunal or not, the learned Senior Counsel for the Claimant placed reliance on the judgment of the Hon'ble Sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that the other agreements between the parties i.e. Erection, Installation and Commissioning Agreement dated 6th January 2007 and the Service and Availability Agreement dated 8th January 2007 which expired 60 months from the date of commissioning i.e.25th March 2006 have all expired/been discharged event at the time the impugned award rendered by the arbitral tribunal. 216. It is submitted by the learned Senior Counsel for the Respondent that claim of compensation made by the Claimant was only the one claim and was not sevarable. He submits that all the judgments relied upon by the learned Senior Counsel for the Claimant in support of the submission that the Court has power to modify the part of the award rejecting the claim made by the arbitral tribunal and to allow those claims are clearly distinguishable. He submits that in none of those matters, the Hon'ble Supreme Court had allowed the claims rejected by the arbitral tribunal. The Hon'ble Supreme Court had exercised the powers under Article 142 of the Constitution of India in few cases and more particularly in case of interest. Those judgments would not assist the case of the claimant. It is submitted that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sity. 9.2 The generation estimate has been carried out usingWAsP and Wind Pro Software. The calculations are based on wind data (for the period from September 2005 to August 2006) from applicable reference mast installed by the SUPPLIER in close proximity to the Site and the Site Specific Power Curve of the wind turbine. Long term data has not been available. Therefore, the seasonal variations between different years have not been taken into account. Accordingly, there could be variations in generation from year to year. Further, the annual generation of each individual WEG might vary within the wind farm. 9.3 The estimated annual average generation of the park is arrived at by applying following correction factors to the estimated gross generation referred to in Clause 9.1 above: (a) Machine Availability - 95% (Guaranteed as per Clause/Annexure J of Maintenance, Service and Availability Agreement) (b) Grid availability - 93% to 98% (Assuming 2% to7% grid drop and not guaranteed by SUPPLIER) (c) Corrections for losses due to long termuncertainty of wind - 5% to 10% (Assumed and not guaranteed by the SUPPLIER) (d) Uncertainty in the modeling (wind resourceanalysis) - 5% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out of 5 turbines in the world is a NEG-Micon. 223. The Respondent further stated its achievements and range of turbines etc. In the proposal, estimated average annual generation at Local Control System (LCS) was shown at 49.71 lakhs per WEG, corrected to Park Efficiency and Air Density. The Arbitral Tribunal further highlighted that the Estimated Annual Generation for the park was arrived at after applying the correction factors at 44.86 lakhs per WEG per annum. The Arbitral Tribunal also considered the Minutes of the Meetings held between the parties which were held by various authorised representatives of both the parties, in paragraph 23.2 and 23.4. The parties, thereafter, entered into Supply Agreement on 4/1/2007; Agreement for Erection and Commissioning on 6.1.2007 and Maintenance, Service and Availability Agreement dated 8.1.2007. The entire dispute and claim, however, pertains only to Supply Agreement dated 4.1.2007. 224. It was the case of the Claimant that the Claimant called upon the Respondent to furnish various informations which were not supplied by the Respondent deliberately to the Claimant, and however, proceeded to enter into the Supply Agreement dated 4.1.2007 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ply Agreement. The Arbitral Tribunal, after considering the contents of the missing page no.9, held that the energy result of the 14 WEGs is 66.95 GWH/Annum. The average production of energy by each WEG sold to the Claimant was arrived at dividing 66.95 by 14 = 4.78 GWH/WEG/Annum which, on conversion into KWH, would become 47.80 Lakh KWH/ WEG/annum; where as the offer document made by NEG Micon stated 49.71 lakh KWH/WEG/annum - gross at Local Control System. The Arbitral Tribunal, accordingly rendered a finding that knowing fully well that the average gross production at the LCS from each of the 14 WTGs was 47.80 Lakh KWH/WEG/annum, and the Respondent mentioned it as 49.71 lakh KWH/WEG/annum, which was a clear misrepresentation, knowing that it was not true. 227. The Arbitral Tribunal, thereafter, adjusted several factors against the said figure 47.80 lakh KWh/WEG/annum and held that the total quantity of loss in generation would come to 25.5% plus 6% = 31.5% per WEG/Annum and 31.5% of 47.80 lakh Kwh/WEG/ Annum would be 15.05 lakh KWh/WEG/Annum. The Arbitral Tribunal, accordingly, arrived at resultant general figure at 32.75 lakh KWh/WEG/Annum. The Arbitral Tribunal considered the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e conclusion. 230. In so far as evidence of Mr. Sven Erik (RW.2) is concerned, the Arbitral Tribunal considered such evidence in paragraph 36.13. It is held by the Arbitral Tribunal that 31.5% of 44.80 lakh KWH/WEG/Annum would have to be deducted. In paragraph 36.9.3, the Arbitral Tribunal considered the Gross Average Annual Generation of 14 turbines of the Claimant. From the evidence of the witnesses examined by both the parties, as per Exhibit 35 and also energy generation after deducting the several factors in the said chart, as per Clause 9.3 of the Supply Agreement, the Arbitral Tribunal took average of all 9 figures mentioned in the said paragraphs and held that the Gross Average Annual Generation Lakh KHW/WEG/Annum was 45.06; whereas generation after deducting the several factors stated in the said paragraph production of Net Energy was 30.87. The Arbitral Tribunal, accordingly, held that it could be inferred from the evidence of RW.2 that the Respondent being the world leader in wind energy production, was not expected to forecast or predict 20 years energy prediction on the basis of one year estimate, that too, the period of one year i.e. September 2005 to August 2006. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to go ahead with it or not. The Arbitral Tribunal considered various admissions on the part of the Witness RW.1 examined by the Respondent on this issue. The Arbitral Tribunal has rendered a finding that the Supply Agreement and the Cash Flow Statement had not given true and correct picture to the Claimant though the same was within the knowledge of the Respondent. 234. In paragraph 39.3, it was held by the Arbitral Tribunal that it could be stated that there was not only misrepresentation, but also suppression of true and correct facts as were revealed from Clauses 9.1 to 9.3 of the Supply Agreement. In paragraph 39.6 of the majority Award, the Arbitral Tribunal held that various documents mentioned therein were vital documents for the Claimant to make up its mind to go ahead with the project. All these factors, which were contributing to the loss in generation of wind energy, had been categorically mentioned in Clause 9.3 of the Supply Agreement. However, in the Final Offer only the loss occurring in generation under Machine Availability and Grid Availability were shown as 5% under each head and line loss at 4%. 235. The Arbitral Tribunal, accordingly, rendered a finding that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and had no knowledge about the wind data pertaining to the Gude Panchgani site which was very very necessary. Both the parties were not equals in the field of wind energy. It was the duty of the Respondent to bring to the notice of the Claimant all the facts that went in determining the proposed estimation of energy. The Claimant was vocal and was demanding the necessary information; whereas the Respondent declined to furnish the same deliberately. 239. The Arbitral Tribunal interpreted Clause 9.2 of the Supply Agreement and held that the said provision casts duty on the Respondent to furnish all the details of wind data for the period September 2005 to August 2006, which naturally included high wind period also. The Respondent, in any event, could not have maintained silence and was required to speak and furnish all the information to show that the estimation was carried out as stated in Clauses 9.1, 9.2 and 9.3 of the Supply Agreement and results of such exercise stated therein. 240. The Arbitral Tribunal, after considering the evidence of both the parties, also held that the transactions as evidenced by the Supply Agreement was not something which could be understood on inspec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pendent upon the expertise of the Respondent. The Respondent was bound to provide all requisite information and data to the Claimant before execution of the Supply Agreement. 244. Admittedly, in this case, the Respondent had not furnished all the requisite information to the Claimant when the Supply Agreement was executed. The Claimant had repeatedly called upon the Respondent to furnish copy of the said missing page, however, the Respondent refused to supply the said missing page. The learned Senior Counsel for the Respondent categorically urged before this Court during the course of argument that though the said page was missing in the Supply Agreement entered into between the parties, the Respondent had rightly refused to comply with the request of the Claimant for furnishing copy of the page No.9 of the Supply Agreement. It was the case of the Respondent that the Claimant ought to have made an independent inquiry about the project and about the expected energy generation before entering into the agreement with the Respondent. It was urged that the Respondent was not at all responsible for not providing the data called upon by the Claimant. 245. In my view, the Arbitral Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntract Act, 1982. 248. In so far as the submission of the learned Senior Counsel for the Respondent that the Claimant could not have depended upon the Cash Flow Statement offered by the Respondent is concerned, in my view, the Arbitral Tribunal has rightly rendered a finding that the Cash Flow Statement relied upon by the Respondent was a crucial factor for the Claimant to determine the commercial viability of the project. The witness examined by the Respondent (RW.1) also admitted during the course of his cross examination that the anticipated rate of return was one of the important factors to be taken into consideration by the Claimant to decide as to whether to go ahead with the project with the Respondent or not. The said Cash Flow Statement disclosed by the Respondent was also thus misleading and was deliberately furnished with incorrect information. In my view, Mr. Chagla, learned Senior Counsel for the Claimant is right in his submission that the role of the Claimant was only that of an investor and based on such Cash Flow Statement also the Claimant was induced to enter into the agreement with the Respondent. 249. In so far as the submission of the learned Senior Counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interpretation by this Court under Section 34 of the Act. The reliance placed by the learned Senior Counsel for the Respondent on the Judgment in the case of Rainy Sky S.A. & ors. vs. Kookmin Bank, (supra) is clearly distinguishable in the facts of this case and would not assist the case of the Respondent. 252. Similarly, the Judgment in the case of Raiffeisen Zentralbank Osterreich AG (Supra) and the Judgment of the Court of Appeal in case of Oscar Chess Ltd. (supra) are also clearly distinguishable in the facts of this case and will not assist the case of the Respondent. 253. There is no merit in the submission of the learned Senior Counsel for the Respondent that the Arbitral Tribunal has excluded the portion of Clause 9.3 of the Supply Agreement in the impugned Award or has nullified any part of Clause 9.3 in the impugned Award. The Arbitral Tribunal has rightly interpreted the Clause 9.3 which was to be read with Clauses 9.1 and 9.2 of the Supply Agreement, which interpretation cannot be substituted by this Court. In my view, the Judgment of Chancery Division in the case of Mills vs. United Counties Bank Limited (supra) is also clearly distinguishable. There is no substance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of no assistance to the Respondent. A perusal of Clause 9.1 of the Supply Agreement indicates that the said clause clearly reflected specific representation of the Respondent that the estimated average annual general (gross) at Local Control System (LCS) was 49.71 lakhs KWh per WEG per annum. Clause 9.2 clearly provided that the generation estimate had been carried out using WAsP and Wind Pro Software. The calculations were based on wind data for the period from September 2005 to August 2006. 257. In my view, Mr. Chagla, the learned Senior Counsel for the Claimant is right in placing reliance on paragraph 16 of the Statement of Defence in support of his submission that the Respondent had clearly admitted in the said paragraph that the projected cash flow and the energy generation estimate was the most crucial and decisive factor for the Claimant to assess and determine the commercial viability of the Wind Farm Project in terms of returns on investment. RW.2 in his evidence had clearly admitted that the period must be 4 to 5 years to make long term estimates; whereas the Respondent had considered the period only from 1 September 2005 to 31 August 2006. The Respondent No.2 had also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was clearly held that when the seller states a fact which is or should be within his own knowledge and of which the buyer is ignorant and the buyer acts upon such fact alleged by the seller, it is easy to infer warranty on the part of the seller. 261. Gujarat High Court in the case of M/s. R.C. Thakkar (supra) had awarded claim for damages in favour of the Plaintiff in view of the estimated cost suggested by other side having been found to be inaccurate and false. The Gujarat High Court in the said Judgment, the facts of which were identical to the facts of this case, considered the documents, which included the representation made with regard to the cost estimated for the work, held as false and misleading and accordingly awarded damages in favour of the other party. The said Judgment of the Gujarat High Court would clearly assist the case of the Claimant. I am in respectful agreement with the views expressed by the Gujarat High Court in the said Judgment. 262. In my view, Mr. Chagla, learned Senior Counsel for the Claimant is right in his submission that the Arbitral Tribunal did not refer to the Judgment in the case of Riaffeisen Zentralbank Osterreich AG (supra) since the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidence on record. Similar view has been taken by the Delhi High Court in HUDCO Limited (supra). 266. In my view, the Respondent having committed a fraud upon the Claimant, which has been established before the Arbitral Tribunal, the Respondent cannot be allowed to urge that Clause 9.3 of the Supply Agreement, was in any manner repugnant to Clause 9.1 in support of the submission that Respondent had not issued any guarantee in favour of the Claimant in respect of the energy generation. 267. In so far as the submission of the learned Senior Counsel for the Respondent that though the Claimant had not pressed the prayer for refund of various amounts originally claimed in the Statement of Claim, the Arbitral Tribunal awarded the claim for damages is concerned, a perusal of the Statement of Claim indicates that the Claimant had prayed for refund of the consideration paid by the Claimant to the Respondent in the sum of ₹ 1544619305/- and also had prayed for interest on the said amount at the rate of 24 % per annum and compensation towards time and expenditure wasted, in the sum of ₹ 200,40,09,750/-. All these claims were made under Claim A. The Claimant had also made an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and had completed the arguments on 19.12.2011. The Respondent had also availed off an opportunity to deal with Claim B. 272. In the minutes of hearing held on 19.12.2011, the Arbitral Tribunal recorded the statement made by the learned Counsel for the Respondent that he had concluded his arguments. Both the parties, thereafter, filed written submissions before the Arbitral Tribunal. Even in the written submissions, both the parties dealt with Claim B made by the Claimant. It was the case of the Claimant that in view of the actual energy figure available to the parties, the Claimant was entitled to damages as a difference between the estimate and the actual generation. The Claimant had computed the total revenue from the sale of power at 225.25 crores for the period of 20 years based on net estimated average generation and HT tariff for the period of 20 years. 273. It is thus clear that the Respondent had not only full opportunity to deal with Claim B, but had, in fact, dealt with Claim B under various heads not only during the course of arguments, but also by filing written submissions. I am inclined to accept the submission made by Mr. Chagla, learned Senior Counsel for the Cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned Senior Counsel for the Respondent that the Claim for damages was neither pleaded, nor argued, nor proved before the Arbitral Tribunal by the Claimant. 278. In so far as the Judgment of the Hon'ble Supreme Court in the case of Draupadi Devi & Ors. (supra), relied upon by the learned Senior Counsel for the Respondent, in support of the submission that there were neither any pleadings on the claim for damages, nor there was any evidence led by the Claimant to prove the claim for damages is concerned, in my view, there is no substance in this submission of the learned Senior Counsel for Respondent. The Claimant had examined witnesses to prove both the claims. The Respondent had also examined witnesses who made various admissions during the course of cross examination to the extent of discrepancies in case of cash flow statements relied upon by the Respondent and also to the effect that the quantum of the energy which could be generated from the project in question. The learned Arbitral Tribunal, in my view, has considered all this documentary and oral evidence while awarding part of the claims made by the Claimant. The facts before the Hon'ble Supreme Court in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the Claimant was entitled to rescission of the contract, and to be put back in position, before the arguments were concluded, the Claimant did not press the said submission or the prayer. In my view, the Claimant rightly exercised the second option under the second part of Section 19 of the Indian Contract Act on the basis of ongoing contract and claim for the damages suffered by the Claimant on the basis of the performance of the contract. It is not the case of the Respondent that the Claimant had pressed for prayer for rescission of the contract or that the same was granted by the Arbitral Tribunal. 283. Hon'ble Supreme Court in the case of McDermott International Inc. (supra) held that the computation of quantum of damages is nothing but a matter of mathematical subtraction. In this case, the Claimant had specifically pleaded that it was entitled to the difference between the actual and projected generation. The Claimant had produced a table comparing the actual and projected generation at paragraph 25 of the Statement of Claim and had proved the said difference by leading oral as well as documentary evidence before the Arbitral Tribunal, which has been considered by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o far as the Judgment in the case of Sargent (supra), relied upon by the learned Senior Counsel for the Respondent is concerned, it is held that the words or "conduct" ordinarily required to constitute election must be unequivocal. The conduct of a party to continue the contract will be consisting only with his right under the contract and inconsistent with his right to determine the contract. In this case, neither the Claimant nor the Respondent had determined or rescinded the contract. The conduct of the Claimant was sufficient to indicate that the Claimant had elected to proceed with the ongoing contract and to make a claim for compensation under the second part of Section 19 of the Indian Contract Act. The Judgment in the case of Sargant (supra) thus would not assist the case of the Respondent, but would assist the case of the Claimant. 287. Similarly, the Judgment in the case of Lakshmijit s/o. Bhai Suchit (supra), relied upon by the learned Senior Counsel for the Respondent, would also support the case of the Claimant and not the Respondent. If, according to the Respondent, there was any rescission of contract elected by the Claimant, the Respondent would not have continued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed Senior Counsel for the Respondent that there was no foundation laid by the Claimant under Section 18 of the Indian Contract Act is concerned, there is no substance in this submission of the learned Senior Counsel for the Respondent at all. In my view, there was no inconsistent plea raised by the Claimant in the statement of claim. The Claimant was entitled to make an alternate claim in the statement of claim. Reliance thus placed by the learned Senior Counsel for the Respondent on the Judgment of the Hon'ble Supreme Court in the case of Sarva Sangh (supra) is thus misplaced. Similarly, the Judgment of this Court in the case of Hanmant Kalghatgi (supra) and also the Judgment of Madras High Court in R. Samudra Vijayam Chettiar (supra) also would not assist the case of the Respondent and are distinguishable 292. In so far as the Judgment of the Hon'ble Supreme Court in the case of Umabai & anr. (supra), relied upon by the learned Senior Counsel for the Respondent is concerned, in my view, since the contract between the parties was not discharged or rescinded and since the Claimant had pressed the claim under second part of Section 19 of the Indian Contract Act on the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into a contract, constitute a warranty. The principles of law laid down by the Court of Appeal in case of Esso Petroleum Co. Ltd. (supra) would clearly apply to the facts of this case. The Arbitral Tribunal has rightly applied the said principles to the facts of this case. I am in respectful agreement with the view expressed by the Court of Appeal in the said Judgment. 296. In so far as the submission of the learned Senior Counselfor the Respondent that in view of Explanation to Section 17 of the Contract Act the Respondent had no duty to speak in a commercial contract which arises only in insurance or indemnity contracts is concerned, in my view, there is no merit in this submission of the learned Senior Counsel . Explanation to Section 17 of the Contract Act refers to "silence" as to the facts likely to affect the willingness of a person which may not be fraud, unless circumstances of the case is of such that there was a duty to speak where his silence is itself equivalent to speech. In this case, the Respondent had categorically stated that the estimated generation was 49.71 lakhs KWh/WEG/annum which estimate was fair, genuine and reasonable, as admitted by the witne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... term of contract, having regard to the main purpose of the contract. It is necessary to give business efficacy to the contract. The principles laid down by the Hon'ble Supreme Court in the said Judgment would apply to the facts of this case. I am respectfully bound by the said Judgment. 300. In so far as the issue raised by the learned Counsel for the Respondent that the Arbitral Tribunal could not have considered the earlier clause prevailing over the later clause is concerned, in my view, the Arbitral Tribunal has rightly applied the principles for interpretation of contract that if earlier clause followed by a latter clause which destroys the object created by earlier clause, the earlier clause would prevail. The principles laid down by the Privy Council in the case of Forbes (supra) and by the Hon'ble Supreme Court in the case of Radha Sundar Dutta (supra) on this issue would clearly support the case of the Claimant. I am respectfully bound by the Judgment of the Hon'ble Supreme Court in the case of Radha Sundar Dutta (supra) which would apply to the facts of this case and also the principles laid down. 301. In so far as the submission of the learned Senior Couns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t had opposed the exorbitant fees demanded by the Arbitral Tribunal. The Respondent did not oppose such fees demanded by the Arbitral Tribunal at any point of time and has waited for the outcome of the Arbitral Award, expecting that the same would be in favour of the Respondent and thereafter to raise this ground in the Arbitration Petition. The Respondent cannot be allowed to raise this issue for the first time in this Petition. 305. Be that as it may, considering the factum of exorbitant fees being charged by various Arbitral Tribunals under different heads, sub-Section (14) is inserted in Section 11, to be read with the Fourth Schedule of the Arbitration Conciliation Act, 1996, prescribing ad valorem fees with a ceiling of ₹ 30.00 lakhs if the sum in dispute exceeds rupees twenty crores. This Court has, however, not framed any Rules so far, as contemplated under Section 11(14) of the Arbitration and Conciliation Act, 1996. The parties before the Arbitral Tribunal sometimes may not be in a position to bargain with the Arbitral Tribunal about the fees demanded by the Arbitral Tribunal, may be under an apprehension that the mind of the Arbitral Tribunal may be prejudiced if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntation made by the Respondent, the Claimant entered into the Supply Agreement dated 4.1.2007. The Claimant also placed reliance upon the fact that the Respondent was operating WEGs on behalf of the Claimant pursuant to agreements and had signed various Joint Meter Readings reports, acting as authorised representative of the Claimant, which was also countersigned by the authorised representatives of MSEDCL. 309. It is the case of the Claimant that since the Respondent had committed fraud upon the Claimant and the Arbitral Tribunal has rendered a finding of fraud against the Respondent, the Arbitral Tribunal ought to have allowed compensation for the period of 20 years as a natural corollary to various findings rendered by the Arbitral Tribunal. The Claimant, accordingly, applied for modification of the Award to the extent the same disallows the claim for compensation for a period of 20 years and only allowing the claim upto the date of Award. 310. With the assistance of the learned Senior Counsel for both the parties, I have perused various findings rendered by the Arbitral Tribunal and more particularly in paragraphs 37.12, 39.2, 39.6, 39.7, 39.10, 39.11, 55.3, 55.4, 55.5, 55.6, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ernational Inc. (supra) would clearly apply to the facts of this case. I am respectfully bound by the said Judgment. 313. A perusal of the impugned Award rendered by the Arbitral Tribunal clearly indicates that the Arbitral Tribunal has rendered various findings of fact, after considering oral and documentary evidence, pleadings and the submissions made by both the parties which findings are not perverse. This Court, while deciding a petition under Section 34 of the Arbitration and Conciliation Act, 1996 cannot reappreciate the findings of fact which are not perverse and cannot reappreciate the evidence led by the parties before the Arbitral Tribunal, which are duly considered by the Arbitral Tribunal. 314. In so far as the provisions of the agreement are concerned, the Arbitral Tribunal has interpreted the terms thereof, including Clauses 9.1, 9.2 and 9.3, which interpretation is not only possible interpretation, but is a correct interpretation. 315. I do not find any infirmity with any part of the impugned Award. I, therefore, pass the following Order : (a) Arbitration Petition No.1088/2015 and ArbitrationPetition No. 599/2015 are dismissed. (b) There shall be no order as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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