GMR Prevails: Supreme Court Rejects Sepco’s Appeal in Rs 1,100 Crore Odisha Power Dispute

India’s Supreme Court has dismissed the appeal filed by Chinese contractor Sepco Electric Power Construction Corporation, marking a decisive win for GMR Kamalanga Energy in a long-standing arbitration battle over a Rs 1,100 crore thermal power project in Odisha.

Key developments

- The dispute stems from a 2008 agreement between Sepco and GMR Kamalanga Energy to build three 350 MW coal-fired thermal power units in Kamalanga village, Dhenkanal district
- Sepco initiated arbitration proceedings after construction delays and technical issues, eventually securing a Rs 1,100 crore foreign arbitral award in 2020
- GMR challenged the award in the Orissa High Court, which found that the arbitral tribunal had overstepped its mandate by rewriting large portions of the original contract and ignoring explicit contractual limitations

Supreme Court verdict

- The apex court upheld the Orissa High Court’s decision to quash the arbitral award, rejecting Sepco’s Special Leave Petition
- The court emphasized that the tribunal’s actions violated fundamental principles of justice by creating a new contract rather than interpreting the existing one
- This ruling reinforces judicial scrutiny over arbitral awards that deviate from contractual boundaries

International angle

- A Chinese court had previously disregarded the Orissa High Court’s judgment, adding complexity to the cross-border enforcement of arbitration outcomes
- The Supreme Court’s decision may influence future arbitration cases involving foreign entities and Indian infrastructure projects

Sources: Economic Times, CaseMine, Indian Kanoon