ARUN MISHRA,J. - (1.) The question involved in the present appeal is the enforceability of the foreign award. The main objections for its enforceability are (i) whether NAFED was unable to comply with the contractual obligation to export groundnut due to the Government's refusal?; (ii) whether NAFED could have been held liable in breach of contract to pay damages particularly in view of Clause 14 of the Agreement?; and (iii) whether enforcement of the award is against the public policy of India?
(2.) The NAFED and the Alimenta S.A. entered into a contract for the supply of 5,000 metric tonnes of Indian HPS groundnut (for short, "commodity"). Clause 11 of the contract provided that terms and conditions would be as per FOSFA, 20 Contract, a standard form of contract which pertains to the CIF contract. The contract entered into was not a Free on Board (FOB) contract.
(3.) NAFED was a canalizing agency for the Government of India for the exports of the commodity. For any export, which is to be carried forward to next year from the previous year, NAFED required the express permission and consent of the Government of India, being a canalizing agency. The said agreement was entered into by NAFED with the Alimenta S.A. at the rate of USD 765 per metric tonnes (Free on Board). The contract was for the season 1979-80. With the contracted quantity of 5000 metric tonnes, only 1900 metric tonnes could be shipped. The remaining quantity could not be shipped due to damage caused to crop by cyclone etc. in the Saurashtra region. The agreement dated 12.1.1980 was the first agreement. The transaction was governed by covenants such as Force Majeure and Prohibition contained in Clause 14 of the Agreement, whereby in case of prohibition of export by executive order or by law, the agreement would be treated as cancelled.;