DFCCIL files Rs 234-crore claim against Chinese firm after contract termination

New Delhi: The Railways' Dedicated Freight Corridor Corporation Limited (DFCCIL) on Friday submitted a counter-claim of Rs 234.25 crore against a Chinese firm which has approached an international tribunal claiming damages to the tune of Rs 443.77 crore after its contract was terminated two years ago.

China Railway Signalling and Communication (CRSC) Research and Design Institute had bagged the Rs 471-crore contract for signalling and telecommunication work on the Eastern Dedicated Freight Corridor in 2016.

In 2020, DFCCIL terminated the contract citing "non-performance", an official said.

The Chinese firm instituted an arbitration under the International Chambers of Commerce rules in Singapore in 2021.

"As per the request for arbitration, the claimant (Chinese firm) had filed a claim of Rs 279 crore in January 2021. The Chinese firm has now submitted it statement of claim (SOC) with a revised claim of Rs 443.77 crore.

"DFCCIL is submitting the statement of defence today. DFCCIL's counter-claim is finalised at Rs 234.25 crore (excluding track access charges)…," the official said, adding that senior advocate Harish Salve has been nominated as arbitrator member from DFCCIL.

The Chinese firm had earlier filed a petition in the Delhi High Court in 2020. The court's order was in favour of DFCCIL. The Chinese firm had challenged the order before a division bench of the Delhi High Court but to no avail.

Officials said though the contract was terminated in 2020, trouble had been brewing since 2019. They said the termination letter was issued after a 14-day notice to the company.

The officials said that apart from performance issues, the Chinese company had also shown reluctance in furnishing technical documents, as per the contract agreement, such as logic design of electronic interlocking.

They also said the company did not have engineers or authorised personnel at the project site which was a serious concern.

The company also failed to have tie-ups with local agencies which harmed the physical progress of the work, they said.

The Chinese company has said DFCCIL owes it in lieu of the work already completed by it under the contract, payment for which has not been made. It also alleged violation of contract provisions by DFCCIL.

DFCCIL, in its counter-claim, has raised the issue of recovery of mobilization advance, retention money and balance under the termination clauses apart from the regularisation of forfeiture of the bank guarantee, the officials said.

The submissions from both the parties will now be presented before the international tribunal before a decision can be taken on the matter.

Currently, the railways is working with Chinese firms and recently it awarded multiple contracts to TZ (Taizhong) Hong Kong International Limited, the international trading arm of Taiyuan Heavy Machinery Group Co. Ltd, a state-owned enterprise with direct links to the Chinese government.

However, neither the CRSC Research and Design Institute nor any other Chinese firm is engaged in any other projects in DFCCIL.

(With PTI inputs)

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