Delhi High Court Upholds Arbitral Award In Patel Gammon's Favour in Rampur Hydropower Project Dispute

The Delhi High Court has dismissed a petition filed by SJVN Limited challenging an arbitral award that granted payment to Patel Gammon Joint Venture for transporting excavated material during a hydroelectric project in Himachal Pradesh.

A single-judge bench of Justice Jasmeet Singh upheld the substance of the arbitral award but held that the court lacked territorial jurisdiction to entertain the challenge under Section 34 of the Arbitration and Conciliation Act, 1996.

The court said the contract clearly vested exclusive jurisdiction in Himachal Pradesh courts, and that this could not be displaced simply because arbitration hearings were conducted in Delhi.

The dispute dates back to a March 2007 contract under which Patel Gammon Joint Venture was awarded civil construction work for the Head Race Tunnel of the 412 MW Rampur Hydroelectric Project on the Satluj River. As excavation progressed, large volumes of material had to be transported more than one kilometer from the tunnel portal. The contractor claimed extra payment for this haulage.

SJVN initially paid the contractor for such transportation through several running account bills. The payments were later stopped, and the amounts already paid were recovered. SJVN took the position that the contract barred payment for overbreak material and argued that the arbitral tribunal had gone beyond the contract by allowing the claim. It also objected to the tribunal relying on cross-section drawings that were submitted at a late stage of the proceedings.

The contractor, however, pointed to Clause 6.19.1 of the technical specifications, which states that “extra payment will be made for hauling the excavated material beyond 1 km from the Portal.” It also highlighted that SJVN itself had earlier accepted this interpretation and made payments for several bills.

Agreeing with the tribunal, the court said its view was “reasonable and plausible” and did not call for interference. Justice Singh reiterated that courts do not sit in appeal over arbitral awards and that the scope of interference under Section 34 is very "narrow.”

The court also accepted the tribunal's reasoning that it would be unfair to restrict haulage payments strictly to the pay line, particularly in tunneling work where overbreak can be unavoidable due to geological conditions. It found no merit in the challenge to quantification, noting that there were jointly certified excavation records and no practical difficulty in working out the claim.

On jurisdiction, the court said the contract conferred exclusive jurisdiction on courts in Himachal Pradesh. Since the arbitration clause provided for multiple venues, including Delhi, the judge held that Delhi could not be treated as the juridical seat of arbitration.

With no grounds made out for setting aside the award, and with the court lacking territorial jurisdiction in any case, the petition was dismissed.

Case Title: SJVN Ltd. v. Patel Gammon Joint Venture

Citation: 2026 LLBiz HC (DEL) 15

Case Number: O.M.P. (COMM) 9/2017

For SJVN: Senior Advocate Uttam Datt with Advocates Sonakshi Singh and Kumar Bhaskar

For Respondent: Advocate S.K. Chandwani

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