TECHMO CAR SPA Vs. MADRAS ALUMINIUM COMPANY LTD

JUDGEMENT

(1.) Aggrieved by the order of the Additional District Judge, Salem dated 22-10-2003, made in Arbitration O.P.No. 46 of 2003, Techmo Car SPA, Italy has filed the above appeal under Section 37 of the Arbitration and Conciliation Act, 1996.

(2.) The respondent herein, The Madras Aluminium Company Limited, Mettur Dam filed the above Arbitration O.P., (O.P.No.46/2003) on 12-3-2003 under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the Act") praying for an order directing the Techmo Car to furnish security by depositing into Court to the credit of the said petition, a sum namely US $.5,757,565 equivalent to Rs.27,40,60,111 or in the alternative to furnish security to the said value in the form acceptable to the petitioner which could be enforced for recovering the aforesaid amount pending disposal of the arbitral proceedings and also an order of interim injunction restraining the said company from removing any records, papers and documents from the petitioner's factory premises situated in Mettur Dam, Salem District, Tamil Nadu, pending disposal of the arbitral proceedings.

(3.) For convenience, we shall refer the parties as referred to before the District Court. The case of the petitioner is as follows: The petitioner, Madras Aluminium Company Limited carries on business in the manufacture and sale of aluminium rods and ingots at its plant in Mettur. In 1998 in view of steep competition, the petitioner intended to modernise its plant. The respondent who is based in Italy, promised to bring about an overall improvement in the performance of the petitioner's plant, including increase in out-put and favourable environmental impact. On inspecting the petitioner's plant, the respondent submitted a proposal. The said proposal was accepted by the petitioner. An Agreement was entered into betweeen the petitioner and the respondent on 16-02-99. Thereafter, on 8-6-2000 an Addendum to the said Agreement was also entered into by the parties herein. In terms of the said agreement dated 16-02-99, the respondent was required to achieve the following key performance parameters: