Decided on January 06,2022

Balaji Coke Respondents


C.PRAVEEN KUMAR - (1.) The present appeal is filed by Rashtriya Ispat Nigam Limited [for short "RINL"] under Sec. 37 of the Arbitration and Conciliation Act, 1996 read with Order 43 Rule 1 of Code of Civil Procedure, 1908 [for short, "C.P.C"], assailing the Order, dtd. 14/10/2019 passed in C.A.O.P.No. 1 of 2018, on the file of Special Judge for Trial and disposal of Commercial Disputes, Visakhapatnam, wherein the application, filed by the appellant herein under Sec. 34 of the Arbitration and Conciliation Act, 1996, was dismissed confirming the order of the Arbitral Tribunal.
(2.) The circumstances, which led to filing of the Claim Petition, are as under:- i) The appellant [RINL] herein which is a Government of India undertaking, issued a Global Tender Notice bearing No. PUR.6/17/13/06006 dtd. 14/3/2006 for supply of 30,000 MT (+)/[-] 5% shipping tolerance of Low Ash Metallurgical (LAM) Coke. The respondent/claimant, who was a successful bidder was given a Letter of Intent, on 21/6/2006 vide PUR 6/17/13/0051. In continuation of theLetter of Intent, the respondent/claimant placed an acceptance of tender for supply of said goods, inconformity with the specifications mentioned in Annexure-I to the contract @ Rs.7730.00 per tonne. ii) Though, the claimant had to supply the goods between August and September, 2006 as per the purchase order, but delay has occurred due to heavy rains and floods in Gujarat State, where the cookeries were located and that the claimant could offer to supply the goods by nominating the Vessel on 23/9/2006, indicating the particulars of the Ship, which are as under:- Name of the Vessel : M.V. Great Haffy Year of built : 1997 Length of overall : 185.74 metrs Crane : 4 x 30 MT Grabb : 4 x 10 CBM iii) However, vide letter dtd. 26/9/2006, the appellant herein rejected the nomination for the reason as under: "In terms of the contract and also due to non-submission of Performance Guarantee bond, we cannot accept the vessel nominated on 26/9/2006. We request you to arrange for Performance Guarantee bond immediately but not later than 27/9/2006 for further necessary action at our end" iv) The material on record also shows that vide letter 26/9/2006, the Claimant submitted Performance Guarantee bond and nominated another vessel. The particulars of which are as under: Name of the Vessel : M.V. Halis Kalkavan Year of built : 1984 Length of overall : 186.70 Mtrs M/Beam : 28.40 Mtrs Crane : 4 x 25 MT Leavycan : 7-14, Jan, 2007 v) However, the same was rejected by the appellant herein mainly on the ground that the Vessel is more than 22 years of age, which is contrary to Clause 1.1 of Annexure-II B to A/T, as it prescribes a Vessel not more than 15 years old. Further, the Vessel has Cranes of 25 MT capacity only as against the requirements of 30 MT capacity. No grabs were available on board, while Clause 1.1 of the agreement prescribe that the Vessel should have atleast four grabs each of 12 Cubic Metres capacity. The claimant addressed letters dtd. 23/12/2006, 29/12/2006, 30/12/2006 and 1/1/2007 requesting the appellant to accept the nominated vessel named M.V. Halis Kalkavan with an undertaking that he would comply all the terms and conditions which are agreed between the appellant and its stevedoring agent at the Visakhapatnam Port. The claimant also agreed to bear all costs in connection with acquisition of additional grabs. The claimant nominated another Vessel by name GESCO and forwarded the details of the same vide letter dtd. 11/1/2007 for approval, but it was also rejected on theground that it did not comply with the requirements of Annexure-II-B. vi) Vide letter dtd. 3/2/2007, the claimant indicated to the appellant that in view of the rejection of three Vessels nominated by him, without any valid reasons, the claimant got absolved from further performance of contract dtd. 21/6/2006. Thereafter, the matter landed before the Arbitral Tribunal.
(3.) The Claimant filed Claim Statement, seeking the following reliefs, which are as under: i) Declaration that the claimant has duly performed and fulfilled its commitments, obligations, covenants and undertakings under the Agreement dated August 13, 2003 [as modified on October 11, 2003] other than the terms performance of which has been prevented or waived by the respondent. ii) A declaration that the claimant is absolved from further performance of the contract dated June 21, 2006 due to the breaches committed by the respondent; iii) Declaration that the contract between the parties has, in the facts of the case; stood repudiated and put to an end thereby disentitling the respondent from claiming from the claimant further performance of the contract between the parties; iv) Perpetual injunction restraining the respondent from claiming from the claimant further performance of the contract between the parties; v) An award for a sum of Rs.14,50,00,000.00 as pleaded in paragraph 53 hereof; vi) An Award for Rs.69,57,000.00 on account of the refund of the aforesaid amount furnished as bank guarantee bythe claimant and invoked and/or encashed illegally and wrongfully by the respondent; vii) Interest and further interest on the awarded sum @ 18% per annum or at such other rate or rates as the Learned Arbitrator may deem fit and proper; viii) Alternatively, an enquiry be made in the damages suffered by the claimant and an Award be made in favour of the claimant for such sum or sums as may be found due thereupon; ix) Declaration that the notice No. 02/02/ 6003/000019/000013 dated March 22, 2004 (styled as a modification advice) is invalid, null and void, unconscionable, burdensome, lacking in mutality onerous and not binding on the parties, ineffective and of no effect; x) Perpetual injunction restraining the respondent from invoking the risk purchase clause being Clause No.14 contained in the said agreement dated June 21, 2006; xi) Declaration that bank guarantee No.IBC/03/RI/344 dated October 16, 2003 has stood discharged; xii) Declaration that the purported threat of invocation of the said bank guarantee by the respondent is fraudulent and/or barred by special equities and is null and void, illegal, ineffective and of no effect; xiii) Perpetual injunction restraining the respondents from invoking or enforcing or encashing the bank guarantee No.IBC/03/RI/344 dated October 16, 2003 or receiving any payment thereunder from the Allahabad Bank, International Branch, Kolkata; xiv) Costs and incidential to the present arbitration proceedings; xv) Such further award or awards be made as the Learned Tribunal may deem fit and proper. The details are as under:- A) Interest on Rs.21.48 Crores (from August, 2006 to June, 2007 @ 14% on the value of the ordered goods Rs.23.19 Crores less profit Rs.1.74 Crores = Rs.21.48 Crores)= Rs.2.75 Crores B) Loss of Production/Profit = Rs.7.15 Crores C) Loss on account of movement From Kandla to New Mangalore = Rs.4.54 Crores D) Plot Rent at Mangalore Port And other expenses = Rs.0.05 Crores Rs.14.49 Crores Total claim (A+B+C+D) = Rs.14.50 Crores ;

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