ENGINEERS INDIA LIMITED

NEW DELHI

INTER OFFICE MEMORANDUM

No. : 8589-740-89-43-IOM Date : _______

From : AGM (Legal) Location : EIB-6th
To : HOD (Internal Audit) Location : EIB-3rd
Ref : 8535-35-41-IOM-TG13-0001
Copies : Office of C&MD
D (HR)
ED (HR)
Subject : Reply to Rejoinder dated 13.10.2022 in respect of Review of Expenses
on Arbitration Cases

Please find enclosed reply to Rejoinder dated 13.10.2022 in respect of Review of Expenses
on Arbitration Cases.

(Smitha Sehgal)
AGM (Legal)

Encl: As above

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 Reply to Rejoinder No. 1 dated 13.10.2022 in respect of Review of Expenses on
Arbitration Cases.

Based on the records available in Legal Department, the reply to Rejoinder No. 1 dated
13.10.2022 in respect of Review of Expenses on Arbitration Cases is as follows:

i) a), c), d), & e), iii): Replied vide IOM dated 02.11.2022.

i) b), ii) Clarification sought in the DOP is enclosed as Annexure 1.

iv) Point no. 1: Expenses are being entered in the software.

Point No. 2: The software was made on line w.e.f. FY 19-20. The reports compiled manually
were entered for previous years were entered in software and can be downloaded under this
option. The individual invoices have been subsequently entered in the software.

Point no. 3, 5 and 6 & 5: The Audit observations were taken up with ITS and have been
incorporated in the software. The updations are being made.

Point no. 4, 6 &and 7: The Audit observations have been taken up with ITS with a timeline
and follow-up is being done.

vi) The amounts have been processed as per approved fee schedule on the basis of certificate.

vii) a) Replied vide IOM dated 02.11.2022. As desired, the requisite details regarding
ongoing cases are enclosed as Annexure 2. Legal expenses are being informed to concerned
Project Managers from time to time in compliance with DOP provisions.

vii) b) It has been clarified that the subject of impleadment of RCB was aimed at ensuring
that RCB takes the financial liability of the arbitration and award, if any, in view of the same
the referred invoice could not have been charged to RCB, however Projects can make
attempts for reimbursement of the same from RCB.

viii), ix) Replied vide IOM dated 02.11.2022.

xi) Estimate of legal expenditure can be determined upon the conclusion of the case as the
same is dependent on the number of hearings, conferences, filings and other requirements as
may be specified by the court from time to time.

xiii) As desired the requisite document is enclosed as Annexure 3.

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xiv) The reasoning had been provided in respect of schedule of rates of EIL and there was no
further observation of previous audit on this aspect in the Final Audit Report.

xv) Approval note is already put up before the competent authority.

xvi) Schedule 4 was introduced in 2015 and all arbitrations which ensued thereafter except
M/s Kimiya Engineers Pvt. Ltd. are under jurisdiction of Delhi High Court which has not
adopted the schedule till date. Further, Bombay High Court has adopted the Schedule 4 only
in 2019 hence does not apply to M/s Kimiya arbitration which concluded in 2017. Further, in
M/s Stonehenge the proceedings were under MSMED Act (and not Arbitration Act) before
MSEFC where law does not provide for payment of any fee by parties.