Bharat Heavy Electricals Limited (BHEL) is intensifying its efforts to expedite the collection of arbitral awards favoring the company, according to insiders. These awards, accumulated between 2018 and 2022, face delays due to legal challenges and the liquidation of parties obligated to pay. A notable award from 2018, worth over ₹830 crore, is entangled in legal battles reaching the apex court, while a 2019 award of ₹223 crore remains pending in the Karnataka High Court. The company aims to resolve these disputes swiftly to bolster its critical role in India’s strategic sectors like aerospace and defense.
BHEL has experienced a remarkable financial turnaround, securing orders worth nearly ₹78,000 crore in 2023-24, a significant increase from previous years. The company’s net profit exceeded ₹96 crore in the September quarter of 2024, contrasting a loss from the previous year. The government holds 63.17% of BHEL, while the remainder is publicly owned. A parliamentary committee has emphasized the need for BHEL to resolve 118 unresolved disputes valued at over ₹10 crore, urging collaboration with the administrative ministry and exploring alternative dispute resolution methods.
The wider issue of arbitration challenges between public sector undertakings (PSUs) and private entities has prompted the Union finance ministry to advise reducing reliance on arbitration, advocating for mediation or litigation instead. The ministry highlighted the financial strain caused by arbitration on the public purse, citing that 60% of arbitrations involving PSUs like the National Highways Authority of India and NTPC result in appeals, escalating costs. Amidst these challenges, BHEL’s share value saw a slight increase, closing at ₹206.15 on January 23, underscoring market confidence in its recovery strategy.
Original Source: https://www.livemint.com/companies/news/bhel-is-pulling-out-all-stops-to-recover-arbitral-awards-worth-1-500-crore-11737689793350.html
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Publish Date: 2025-01-25 05:30:00
