Arbitration ordered in TANGEDCO, IT firm non-payment of dues row

The row between TANGEDCO and Navayuga Infotech Private Ltd, which automated the billing collection for consumers across 110 towns in Tamil Nadu, over non-payment of Rs 140 crore is intensifying. 

Following the failure of mediation between the two, the Madras High Court has ordered arbitration to settle the conflict.

The summer vacation judge, Justice M M Sundresh, while disposing of two writ petitions and original applications in this regard, said, “As agreed upon on either side, arbitration is ordered. Because the mediation has already failed, hence the arbitration proceedings have been ordered.” 

Also, the judge on ordering a status quo against the cancellation of the agreement until either side files an application before the arbitration, held, “Justice (Retd) K Chandru will be the arbitrator for TANGEDCO, while Justice (retd) K Venkataraman will be the arbitrator for Navayuga Infotech Private Ltd. The arbitration proceedings will be presided over by Justice N Paul Vasanthakumar, retired chief justice of Jammu and Kashmir.”

Navayuga Infotech Private Ltd represented by its vice-president U B Raju had contended that the value of hardware supplied to TANGEDCO alone amounted to more that Rs 250 crore whereas, the total sum received from TANGEDCO is to the tune of just Rs 110 crore. Further, the software has been installed and implemented in 102 towns where the system is currently being operated by TANGEDCO and is generating revenue successfully.

But notwithstanding this, TANGEDCO has refused to accept that the software has been installed by Navayuga under the contract, citing frivolous reasons with a view to stalling payment to the firm, the plea said. It sought to quash the letter dated March 28, 2017, threatening to terminate the contract awarded and direct TANGEDCO to make the milestone payment of a sum of Rs 140 crore for the work already completed.