Bombay High Court Upholds ₹27.43 Crore Arbitral Award Against ONGC In Uran ETP Dispute, Dismisses Appeal

The Bombay High Court has recently upheld an arbitral award in favour of Newton Engineering & Chemicals Ltd, dismissing Oil and Natural Gas Corporation's appeal in a dispute arising from delays in the Uran Effluent Treatment Plant project.

A Division Bench of Chief Justice Shree Chandrashekhar and Justice Gautam A. Ankhad held that the tribunal's interpretation of the contract was a plausible view and did not warrant interference.

“We do not find any contradiction in the Award or the findings of the learned Single Judge. In any case, we also find that the Tribunal's interpretation is a plausible view arising from the contractual scheme and does not warrant interference.”

The court was hearing ONGC's appeal against a single judge's October 17, 2025 order, which had refused to set aside the arbitral award dated August 26, 2021.

The arbitral tribunal had awarded about Rs. 27.43 crore to Newton Engineering out of claims exceeding Rs. 111 crore after holding that the termination of the contract was wrongful.

The dispute arose from a turnkey contract awarded by ONGC for modernisation of the Effluent Treatment Plant at its Uran facility. Newton submitted its bid on July 7, 2014, received the Letter of Award on May 11, 2015, and the contract was executed on March 29, 2016. ONGC issued a show cause notice on May 9, 2017 and terminated the contract by letter dated June 15, 2017, with effect from June 7, 2017.

Newton disputed the allegations, attributing delays to ONGC, particularly issues relating to sludge disposal, which it said hindered execution of the project.

Upholding the tribunal's rejection of ONGC's contention that the contractor was responsible for delay, the court noted that Newton had specifically flagged sludge removal as a key impediment in its reply to the show cause notice, which ONGC failed to address.

“We are unable to accept this submission. The respondent in its reply dated 29th May 2017 to the show cause notice specifically identified the removal of sludge as a key hindrance to the performance of the contract and attributed the delays in the project to the appellant. Inexplicably, the appellant does not deal with this issue at all in the termination notice dated 15th June 2017.”

The court also upheld the tribunal's reliance on documentary evidence such as invoices, work orders and bank statements, holding that the sufficiency and adequacy of such evidence falls within the tribunal's domain.

“The sufficiency and adequacy of evidence falls squarely within the domain of the Tribunal. The finding in the Award on this Issue cannot be termed as based on 'no evidence'.”

Finding no patent illegality or perversity in the award, the court dismissed the appeal and upheld the arbitral award.