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Eastern Power Distribution Company Of ... vs Gail India Ltd on 29 July, 2022

Author: Prateek Jalan

Bench: Prateek Jalan

                          $~22
                          *    IN THE HIGH COURT OF DELHI AT NEW DELHI

                          +      O.M.P.(I) (COMM.) 230/2022

                                 EASTERN POWER DISTRIBUTION
                                 COMPANY OF ANDHRA PRADESH LTD            ..... Petitioner
                                             Through: Mr. Jayant Mehta, Senior
                                                       Advocate with Mr. Raghav Bhatia,
                                                       Mr. Sidhant Kumar, Ms. Manyaa
                                                       Chandok and Ms. Vidhi
                                                       Udayshankar, Advocates.

                                                              versus

                                 GAIL INDIA LTD                                     ..... Respondent
                                                       Through:   Mr. N.L. Ganapathi and Mr.
                                                                  Sidhant Garg, Advocates (Mobile
                                                                  No. 9810935911, Enrolment ID-
                                                                  D/441-A1/1951).
                          CORAM:
                          HON'BLE MR. JUSTICE PRATEEK JALAN
                                            ORDER

% 29.07.2022 I.A. 11903/2022 (for exemption) Exemption allowed, subject to all just exceptions. This application stands disposed of.

O.M.P.(I) (COMM.) 230/2022

1. The petitioner and the respondent are parties to an Agreement for sale and purchase of Natural Gas dated 20.07.2021 ["the Agreement"], by which the respondent agreed to supply APM Gas [Gas under

Administered Price Mechanism] to the petitioner on the terms and conditions contained in the Agreement. The Agreement contains an Signature Not Verified Digitally signed By: O.M.P.(I) (COMM.) 230/2022 Page 1 of 3 JUSTICESHITU NAGPAL Signing Date:30.07.2022 17:06:55 arbitration clause in Article 17.

2. By way of this petition under Section 9 of the Arbitration and Conciliation Act, 1996 ["the Act"], the petitioner seeks interim measures of protection in the light of a communication dated 22.07.2022, addressed to it by the respondent herein, whereby the respondent has informed the petitioner that APM Gas from the Krishna-Godavari Basin, allocated to power plants [such as the petitioner], will be diverted, and made available to City Gas Distribution entities outside the Krishna-Godavari Basin with effect from 01.08.2022. The petitioner has, consequently, been advised to take all necessary precautions for the continued running of its plants, or to make alternate arrangements for supply of fuel. The letter of the respondent dated 22.07.2022, refers to the minutes of meeting dated 27.04.2022, whereby, according to the respondent, the Ministry of Petroleum and Natural Gas, Government of India, has asked it to divert the Domestic Gas to the requirements of the City Gas Distribution Sector. The correspondence placed on record also shows that the petitioner has sought a copy of the said minutes, which, according to the petitioner, have not yet been served on it.

3. I have heard Mr. Jayant Mehta, learned Senior Counsel for the petitioner, and Mr. N.L. Ganapathi, learned counsel for the respondent.

4. While the respondent contests the arbitrability of the disputes in this regard with reference to Article 7.05 of the Agreement, it is also submitted by Mr. Ganapathi, without prejudice, that the petitioner is at liberty to seek supply of "Substitute Gas", as contemplated under Article 6.03 of the Agreement, which the respondent would be willing to consider.

5. Without prejudice to the argument regarding non-arbitrability of disputes, Mr. Ganapathi also submits, albeit tentatively, that Article 17.08 of the agreement requires dispute resolution between the petitioner [which is a public sector enterprise of the State of Andhra Pradesh] and the respondent [which is a public sector enterprise of the Union of India] to be taken up by the AMRCD [Administrative Mechanism for Resolution of Commercial Disputes], established by the Government of India vide an Office Memorandum dated 22.05.2018.

6. Learned counsel for the respondent seeks time to file a reply to the petition, and also to enable the parties to explore an interim arrangement. It is also submitted by Mr. Ganapathi that the supply of APM Gas under

the Agreement will not be terminated until the next date of hearing before this Court.

7. In these circumstances, the parties are at liberty to explore the possibility of a mutually convenient interim arrangement which can be set in place, as also to consider the final means of dispute resolution, having regard to the provisions of Article 7.05 and Article 17 of the Agreement.

8. The respondent may file its reply by 03.08.2022.

9. List on 08.08.2022.

PRATEEK JALAN, J JULY 29, 2022 'vp'/ Click here to check corrigendum, if any Signature Not Verified Digitally signed By: O.M.P.(I) (COMM.) 230/2022 Page 3 of 3 JUSTICESHITU NAGPAL Signing Date:30.07.2022 17:06:55