S&A Law Offices is pleased to announce that it has secured a significant legal victory on behalf of its client, Parsa Kante Collieries Limited (PKCL), in a substantial matter pertaining to a dispute involving the interpretation of liability for payment of Compensation Cess on coal rejects in terms of the Coal Mining and Development Agreement (CMDA).
Rajasthan Rajya Vidyut Utpadan Nigam Limited (RVUNL) entered into a CMDA with PKCL for mining of coal and delivery of coal at the power plants of RVUNL at Rajasthan. Upon promulgation of Compensation Cess, a dispute arose between RVUNL and PKCL about who in terms of COMDA will be liable to pay the Compensation Cess on coal rejects. As the disputes were not settled amicably, PKCL invoked Arbitration and the Hon'ble Arbitral Tribunal by way of Interim Award dated 25.06.2021 and Final Award dated 14.08.2021 decided the issue in favour of PKCL inter alia holding that in terms of CMDA, RVUNL is liable to bear all the taxes to be applicable in future. The Tribunal awarded an amount of around Rs.740 Crores in favour of PKCL (out of which around Rs.330 Crores is to be paid by RVUNL to PKCL and around Rs.410 Crores to be adjusted from the books of RVUNL).
RVUNL challenged the said Interim and Final Award under section 34 of the Arbitration and Conciliation Act, 1996 before the Ld Commercial Court at Jaipur, Rajasthan and the Ld Commercial Court vide Judgment dated 09.02.2024 was pleased to upheld the Award and dismiss the challenge of RVUNL. The Ld. Commercial Court held that that view taken by the Arbitrator is a plausible view and require no interreference. Being dissatisfied with the same, RVUNL filed an Appeal under section 37 of the Arbitration and Conciliation Act, 1996 before the Hon'ble Rajasthan. High Court. The Hon'ble High Court of Rajasthan vide the Judgment dated 23.05.2025 was pleased to dismiss the Appeal filed by RVUNL and upholding the Award and the Judgment of the Commercial Court.
S&A Law Offices under the leadership of Mr Manoj K. Singh, Counsel and Mr Nilava Bandyopadhyay, Senior Partner along with Mr Adhip Ray and Surabhi Rana represented PKCL in the Arbitration stage as well as before the Commercial Court and the Hon'ble Rajasthan High Court.
Judgement: Rajasthan Rajya Vidyut Utpadan Nigam Limited v Parsa Kente Collieries Limited (PDF)