Thermax Limited (“the Company”) announced that in the matter of Arbitration between the Company and a Customer (“Claimant”, that is, Rashtriya Chemicals and Fertilizers Limited) regarding recovery of damages, losses, etc. for breakdown of two (2) Gas Turbo Generator (GTGs), an award has been passed by a Arbitral Tribunal consisting of Sole Arbitrator on June 5, 2023.
The Arbitrator has directed the Company to repair and reinstate both the GTGs at Customer’s plant at the Company’s own cost and expenses under the defect liability clause (the Company has since taken action to repair and reinstate the GTGs). The Arbitrator also allowed the Customer’s claim on additional expenditure on power and directed the Company to pay Rs. 173.72 Crores with interest along with a sum of Rs. 95 Lakhs as arbitration cost to the Customer.
The Arbitrator dismissed other claims and counter claims made in the matter. Thus, the award would have an estimated total financial impact of approximately Rs. 250 Crores on the Company.
The Company has been advised that the order is not based on proper appreciation of facts and is in the process of challenging the award before the appropriate appellate authority.
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