FOREIGN COMPANIES REASSURED OF JUSTICE IN INDIA
“The Indian Lawyer and Allied Services” which is based out of New Delhi, Mumbai and Hyderabad announces its success in two international Arbitrations in which it represented a Billion Dollar Construction Company namely Open Joint Stock Far Eastern Mining Construction Company.
With foreign companies still apprehensive about entering India, the Awards in the two international Arbitrations between FEMC, a Russian construction company, and Indian company Pratibha Constructions Ltd. reassures everyone that the Indian legal system is highly effective in delivering justice without delay or bias.
A short gist of the facts: FEMC-Pratibha JV won the Delhi Metro Rail Corporation (DMRC) Contracts CC-18 and CC-23 in 2012-13 for construction of stretches of metro in South Delhi area. After winning the Contracts differences arose between the partners and Pratibha effectively threw out FEMC from the Projects and also stopped payment of installments of the agreed Success Fee. FEMC initiated the Arbitration in late 2013 for recovery of the pending Success Fee as well as damages, loss of profits etc. Pratibha filed cross claims too.
The Arbitral Tribunal presided by Former Chief Justice of India, Justice R.C. Lahoti, Former Chief Justice of Allahabad High Court, Justice Ferdino I. Rebello and Dr. V.K. Aggarwal, Former Law Secretary heard both Parties at length and delivered the Awards on 20th July 2016, dismissing the claims of Pratibha as being devoid of merit and allowing FEMC’s claims for pending Success Fee in both the Arbitrations to the tune of Rs. 23.79 Crores as well as Rs. 10.79 Crores for damages. These amount carry 9% interest if paid within 30 days (19th August 2016) failing which the entire dues payable will carry interest of 18% thereon. Costs of Arbitration of Rs 88.79 Lakhs were also awarded.
The Arbitral Tribunal has also held that Pratibha shall indemnify FEMC from future liabilities that may arise due to any faulty execution or lapses by Pratibha.
Chief Legal Consultant Ms. Sushila Ram Varma and Senior Consultant Sukun K.S. Chandele (along with a team of seven lawyers) representing the Law Firm engaged by FEMC, applaud the Award in these Arbitrations as a proof of robustness and maturity of Indian legal system and state that foreign companies can be reassured that their rights and interests are fully protected in India.
The aforesaid Awards conclusively prove that India honors contractual obligations that foreign companies/parties had entered into. Mr. Modi’s Government which is welcoming foreign participation in Indian business has made several changes for ease of doing business in India. Amongst these honoring foreign contracts is a top priority.
Arbitrations have become a recognised means of resolving disputes world over. India has also recognised the importance of quick resolutions of disputes thereby amending the Arbitration Law. The Arbitration and Conciliation (Amendment) Act, 2015 now mandates that all arbitration proceedings have to conclude within one year from the date of reference.
Sushila Ram Varma
Founder and Chief Consultant
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