Calcutta High Court
Neo Metaliks Limited vs Orrisa Metaliks Private Limited on 9 July, 2026
Author: Debangsu Basak
Bench: Debangsu Basak
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
(COMMERCIAL DIVISION)
ORIGINAL SIDE
Present:
The Hon'ble Justice Debangsu Basak
And
The Hon'ble Justice Md. Shabbar Rashidi
AO-COM No. 11 of 2025
Arising out of A.P. (COM) No. 32 of 2024
Neo Metaliks Limited
Vs.
Orrisa Metaliks Private Limited
For the appellant : Mr. Pranit Bag, Adv.
Mr. Arjun Ray, Adv.
Mr. Piyush Agrawal, Adv.
Ms. Shrivalli Kajaria, Adv.
Ms. Saloni Kumar, Adv.
For the respondent : Mr. S. N. Mookherjee, Sr. Adv.
Mr. Krishnaraj Thaker, Sr. Adv.
Mr. Debrup Bhattacharya, Adv.
Mr. Yash Singhi, Adv.
Mr. R. N. Ghose, Adv.
Ms. Pritha Ghose, Adv.
Ms. Shusna Santra, Adv.
Hearing concluded on : 30.06.2026
Judgment on : 09.07.2026
SK SOHEL Digitally signed by
SK SOHEL UDDIN
UDDIN Date: 2026.07.09
11:36:05 +05'30'
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Md. Shabbar Rashidi, J.:-
1. The appeal under Section 37 of the Arbitration and
Conciliation Act, 1996, at the behest of claimant, is in assailment of
judgment and order dated January 6, 2025 passed in A.P.(COM) No.
32 of 2024.
2. By the impugned judgment and order, the learned Single
Judge did not find any infirmity with the award passed by learned
Arbitrator on October 16, 2023 and consequently, dismissed the
application under Section 34 of Arbitration and Conciliation Act,
1996.
3. It was contended by learned advocate for the appellant that
the learned Single Judge did not consider that the counter claim
allowed in the arbitral proceeding could not have been allowed and
was liable to be set aside even if, the appellant was held guilty of
breach of the contract as well as orders dated April 28, 2022 and
May 20, 2022. It was further contended that the learned Single
Judge failed to appreciate that the difference in market price and
contract price as on June 14, 2022 were erroneously calculated to ₹
5,60,00,000/-. The actual difference could not be in excess of ₹
56,48,200/-.
4. Learned advocate for the appellant further submitted that
the learned Single Judge failed to appreciate that claim on account
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of difference in market price was withdrawn by the respondent and
as such, it could not have been awarded by the learned Arbitrator.
Similarly, the claim in respect of port charges and handling charges
could not have been allowed as such charges are required to be
borne by the recipient of goods. Learned advocate for the appellant
submitted that for such reasons, the learned Single Judge ought to
have held that the award under challenge contained errors apparent
on the face of record sufficient to shock the conscience of the court
and was patently perverse. The award was perverse in terms of the
provisions of Section 34 (2) (a) (iv) of the Act of 1996.
5. Learned advocate for the appellant further contended that
the learned Single Judge failed to appreciate that the learned
Arbitrator did not decide the core issue of breach of contract dated
February 20, 2022 for which the disputes were referred to
arbitration. The learned Arbitrator had no jurisdiction to decide the
breach of orders dated April 28, 2022 and May 20, 2022. By the
aforesaid orders, neither the time of performance was extended nor
did the appellant/claimant relinquish its rights for the breach of the
contract. Learned Single Judge wrongly applied the provisions of
Section 63 of the Contract Act, 1872 in facts of the case. Both the
parties pleaded breach of contract dated February 20, 2022 against
each other. Learned Single Judge failed to appreciate that in the
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impugned award, damages were awarded for breach of the consent
order dated May 20, 2022 and not that for breach of the original
contract, which renders the award manifestly perverse containing
patent illegality.
6. It was further contended by learned advocate for the
appellant that learned Single Judge came to an erroneous finding
that the appellant was guilty of breach of order dated May 20, 2022
by not opening the Usance Letter of Credit and that the time of
performance of the original contract stood extended by such order in
terms of the provisions of Section 63 of the Contract Act, 1872. It
was submitted that the learned Trial Judge had committed error in
holding that the respondent had complied its obligation under order
dated May 20, 2022. The learned Single Judge erred in not
interfering with the findings of learned Arbitrator to the effect that
request for amendment of Sight Letter of Credit into Usance Letter
of Credit was in conformity with the directions of this High Court.
7. Learned advocate for the appellant also argued that the
learned Single Judge failed to appreciate that the learned Arbitrator
came to an erroneous finding that the appellant did not comply its
obligation under order dated May 20, 2022 and illegally terminated
the contract and that there was no violation on the part of the
respondent. The appellant also claimed that the arguments made on
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its behalf were not properly considered by learned Arbitrator and
this fact was completely overlooked by learned Single Judge while
disposing the application under Section 34 of the Act of 1996.
8. On the other hand, learned senior advocate for the
respondent submitted that the appellants never complied with the
terms and conditions of the original contract. When the disputes
arose between the parties, the parties approached the court by way
of various proceedings including civil suit as well as contempt
application. With the consent of the parties, the disputes and
differences were referred to arbitration. It was also contended that
in one of such proceedings, a consent order came to be passed, both
parties agreed to carry some obligations. The respondent complied
with such obligation whereas, the appellant failed and neglected to
perform its obligation for which, the appellant was rightly held by
the learned Arbitrator as well as learned Single Judge to be
responsible for breach.
9. Learned senior advocate for the respondent further
submitted that the fact of breach of original contract was framed as
an issue in the arbitration proceeding for adjudication. However,
after the consent order dated May 20, 2022, since such order
related to the rival obligations under the contract dated February
20, 2022, learned Arbitrator proceeded to decide the issue as the
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manifest garb of the breach of such order. By doing so, the learned
Arbitrator went on to decide the disputes cropped up between the
parties effectively. For such reason, the arbitral award cannot be
said to be perverse or against the public policy on the ground that it
did not decide the core issue. The learned Single Judge was quite
justified in upholding such findings of the learned Arbitrator.
10. It was further contended by learned senior advocate for the
respondent that the learned Arbitrator, on the basis of evidence put
on record, came to hold that inspite of a number of correspondences
and sufficient opportunities provided to it, the appellant failed to
perform its obligations under the contract which the appellant
further acknowledged in terms of the consent order dated May 20,
2022. Therefore, the learned Single Judge committed no error in
affirming such finding of learned Arbitrator holding the appellant
responsible for the breach. For the aforesaid reasons, it was argued
by learned senior advocate for the respondent, that the impugned
judgment and order does not call for any interference and needs to
be affirmed.
11. The petitioner agreed to purchase 10,000/- Metric Tons of
Lam Coke from the respondent at the price and terms and
conditions of the contract entered into between the parties on
February 22, 2022. In accordance with the terms of the contract,
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the appellant paid a sum of ₹4,49,55,000/- to the respondent on
February 22, 2022, being the 10% of the contract amount. The
terms of the contract stipulated that the balance amount of
consideration money would be paid by the appellant by opening a
Letter of Credit, seven days prior to the arrival of the vessel. It was
agreed between the parties that the Letter of Credit would be in a
mutually agreed format from a first class bank.
12. By an email dated April 1, 2022, the appellant requested the
respondent to share the format of the proposed letter of credit. The
respondent forwarded the format of letter of credit to the petitioner
on April 8, 2022. On April 9, 2022, the appellant suggested certain
changes to the format of the letter of credit followed by reminders on
April 9, 2022 and April 13, 2022 requesting the respondent to
confirm the format of letter of credit. The respondent transferred the
10% of the advance amounting to ₹4,49,55,000/- to the petitioner
with intimation to that effect by an email dated April 14, 2022. It
was intimated that the advance money was refunded by the
respondent on the ground of breach of contract by the appellant in
so far as the appellant failed to settle the required letter of credit in
terms of the contract. With the return of advance money the
respondent also terminated the contract. Pursuant to such
termination, by an email dated April 16, 2022, the appellant asked
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the respondent the reason of refund of the advance money to the
tune of ₹4,49,55,000/-. At the same time the appellant requested
the respondent to confirm the format of the draft letter of credit and
the date of arrival of the vessel in order to enable the appellant to
open the letter of credit and other facilities in terms of the contract.
Such communication by the appellant was followed by a reminder
on April 18, 2022.
13. The materials on record also reveals that the appellant filed a
suit being T. S. No. 519 of 2022 on April 25, 2022 seeking specific
performance of the contract with a direction upon the respondent
for the delivery of 10,000 MT of Lam Coke together with other
ancillary reliefs. The appellant also filed an application under Order
39 Rule 1 and 2 of the Code of Civil Procedure. By an order passed
on April 25, 2022, the respondent was restrained from dealing with
disposing of or alienating or encumbering or creating any third
party interest and from removing the goods from the vessel. The
respondent was also restrained from making over the goods to any
third party or restoring the same in the warehouse or precincts of
any third party until May 21, 2022.
14. Being aggrieved with such restraining order dated April 25,
2022, the respondent carried an appeal before a Division Bench of
this Hon'ble Court in the form of FMAT No. 137 of 2022 coupled
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with an application being CAN No. 1 of 2022 praying for the stay of
the operation of order dated April 25, 2022. An interim order was
passed by the Hon'ble Division Bench granting liberty to the
respondent to remove entire consignment upon returning 10,000
MT of Lam Coke. Such appeal and the application filed by the
respondent were disposed of by a consent order dated April 28,
2022. In compliance with the said order, the appellant paid a sum of
₹44,955,000/- to the respondent on April 30, 2022 towards 10%
advance payment. The appellant also sent an email to the
respondent recording payment details and seeking confirmation of
draft letter of credit. By an email dated May 2, 2022, the respondent
acknowledged the receipt of 10% advance payment and also
forwarded the revised draft letter of credit to the petitioner
requesting the appellant to open the letter of credit.
15. The appellant then sent another email to the respondent on
May 2, 2022 indicating that as per the contract, the sale was to be
effected on the basis of High Sea Sale whereas, since the goods had
already arrived, unloaded from the vessel and shifted to the port,
the sale was to be made as GST sale. The appellant also specified in
such email, that since the original agreement contemplated High
Sea Sale, the banker was requiring an addendum to such agreement
dated February 22, 2022 making provisions for GST sale. The
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appellant also informed the respondent that it was agreeable to
open Usance Letter of Credit or a Sight Letter of Credit subject to
negotiations over GST sale and the port charges would be included
in the invoice. Such communication by the appellant was duly
replied to by the respondent by an email dated May 4, 2022
expressing its willingness to supply the agreed amount of Lam Coke.
The respondent also indicated that the original agreement already
contained provisions for GST sale and that the Letter of Credit was
to include the payable GST anyway in terms of the original
agreement. As such, no amendment in the original agreement was
required.
16. The appellant also indicated to the respondent that the draft
Letter of Credit forwarded by the respondent on May 2, 2022 was
defective and incomplete. The appellant declared that it was
proceeding to open Sight Letter of Credit. On May 6, 2022, the
appellant sent two draft Letters of Credit which the respondent
discarded by an email dated May 6, 2022 itself citing certain
anomalies therein that is to say, the payment was to be made
through Letter of Credit based on invoice for the remaining quantity
of 9,000 MT of Lam Coke, at a time, instead of payments against
material movement and that the respondent would not be able to
issue lorry receipts. It was alleged that the demand of the
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respondent for issuance of Letter of Credit for the entire
consideration money of the balance quantity of consignment, was
unjust and beyond the scope of the original contract. On the
contrary, the respondent's contention was that there was no
reference of phase wise payment of consideration money in the
contract. However, the respondent expressed its willingness to
supply the entire quantity of goods against payments in terms of the
contract.
17. On May 12, 2022, the appellant forwarded the bank
guarantee to the respondent in terms of order dated April 28, 2022.
The appellant also filed a contempt application against the
respondent for non-compliance of order dated April 28, 2022 having
not allowed the appellant to lift 10,000 MT of Lam Coke. At the
same time the appellant also applied before the Hon'ble Division
Bench seeking modification of the order dated April 28, 2022, in so
far as it related to direction upon the appellant to furnish bank
guarantee of ₹5,00,00,000/-. Such application filed by the appellant
was disposed of by a consent order passed on May 20, 2022 which
read as follows:
"By consent of the parties, the application for contempt
being CPAN 457 of 2022 and the application for
modification being CAN 2 of 2022 are taken up together
and disposed of on the following agreed terms:
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1. The applicant will amend the Sight LC into a
Usance LC upon a written request letter from the
appellant within 7 working days for the balance
contract value against following documents to be
provided by the appellant:
a. GST Sale Invoice for 10,000 MT;
b. Delivery Order for supply of 10,000 MT of
Coke from a single port plot in favour of the
applicant with a copy to the Handling Agent,
Customs Authorities and the Port Authorities.
c. Confirmation Letter to all concerned
authorities stating that the applicant is
authorized to lift the 10,000 MT of Coke.
2. The applicant shall be liable for and shall make
payment of Port Handling charges and other charges
in terms of the contract.
3. The amended LC will be discounted by the
applicant through the applicant's bankers under the
applicant's limit within another 3 days after
submission of originals of (a) bill of exchange, (b) GST
Sale Invoice, (c) Irrevocable Delivery Order and (d)
Confirmation Letter as mentioned in 1(c) above by the
appellant to the banker of the applicants. It is
pertinent to add that the discounting/interest and
incidental changes will be borne by the applicant.
The applicant will submit proof of dispatch
documents to the bankers from time to time.
4. The appellant undertakes to start giving delivery of
the 10,000 MT of materials to the applicant
immediately after receiving the balance consideration
through the said Usance LC without any delay. The
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appellant undertakes to provide full co-operation and
to ensure that the materials are delivered.
5. If within June 13, 2022 the appellant does not
receive the entire balance consideration for the goods,
it would be free to sale and deal with the 10,000 MT
of LAM Coke and the parties would then make all
claims in the arbitration.
6. The undertakings filed by the respective parties
shall be exchanged and the original bank guarantee
furnished by the applicant in terms of the order dated
April 28, 2022 be handed over to the appellant within
7 days from date. The bank guarantee shall be
invoked in terms of the order dated April 28, 2022
only after giving 14 days' prior notice in writing to be
given to the applicant in this regard.
7. However, all issues are left open to be raised
before the learned Arbitrator. There will be no order
as to costs."
18. By a letter issued through its advocate, the appellant invited
the respondent to send the written request for amendment of Letter
of Credit as contemplated in the order dated May 20, 2022. The
respondent accordingly responded to such letter by an email
requiring modification of the Letter of Credit. By a subsequent email
dated May 24, 2022 the appellant rejected the request on the
ground that the same was not in conformity with the order dated
May 20, 2022. According to the appellant, the said order only
contemplated written request for amendment of Letter of Credit
whereas, contents of it were not negotiable. Such communication by
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the appellant was responded by the respondent by an email dated
May 25, 2022. By an email dated 26th May, 2022, the petitioner
intimated the respondent that the Letter of Credit opened on 6th
May, 2022 would be amended to a Usance Letter of Credit upon
receipt of a mail from the respondent in the format given in the
email.
19. Accordingly, the respondent provided the petitioner with the
debit note and other supporting documents and requested the
petitioner to make payment towards port handling charges and
other charges. The respondent also called upon the petitioner to
amend the Letter of Credit and make provisions therein for
discounting the Letter of Credit within three days after submissions
of original documents. The respondent has also requested the
petitioner to make payment of the port handling charges and other
charges. Several emails were exchanged between the parties. The
respondent claimed incorporation of terms of discounting of Letter
of Credit within 3 days of submission of original documents. It also
claimed the port charges and handling charges. The respondent
through an email dated 30th May, 2022 informed the petitioner that
the respondent time and again by series of email messages
requested incorporation of necessary amendments/ modifications in
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the Letter of Credit including form Sight Letter of Credit to Usance
Letter of Credit.
20. Ultimately, the petitioner by an email dated 31st May, 2022
informed the respondent that the petitioner had decided to procure
LAM Coke from open market and demanded for refund of
₹4,49,55,000/-. In reply, the respondent claimed that the petitioner
was guilty of violation of the order passed by the Hon'ble Court
dated 20th May, 2022 by not amending the Sight Letter of Credit to
Usance Letter of Credit inspite of repeated requests from the
respondent. It was also claimed that the appellant also did not pay
the port handling charges and other charges and failed to make
provisions for discounting the amended Letter of Credit within
specified time and did not hand over the original bank guarantee to
the respondent.
21. The appellant filed an application under Section 17 of the
Arbitration and Conciliation Act, 1996 against the respondent on
May 31, 2022 praying for interim reliefs. On 2nd June, 2022, the
appellant had also filed a contempt application before the Hon'ble
Court being CPAN No. 491 of 2022 against the respondent for
violation of the orders dated 28th April, 2022 and 20th May, 2022.
Similarly, the respondent also filed contempt application against the
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appellant on July 16, 2022 alleging violation of the selfsame orders
passed by the Hon'ble Division Bench.
22. In the meantime, the parties put their respective statement of
claim and statement of defence coupled with counter claim in the
arbitration proceeding. The appellant also filed an application under
Section 31 (6) of the Act of 1996; however, the same was never
pressed by the appellant. Incidentally, the application filed by the
appellant under Section 17 of the Act was disallowed.
23. The matter revolves around the allegations of breach of
orders dated April 28, 2022 in FMAT 137 of 2022 and May 20, 2022
passed in CPAN 457 of 2022. We have noted the order dated May
20, 2022 hereinbefore. It would be apposite to set out the order
dated April 28, 2022 for proper appreciation. The said order reads,
thus:
"By consent of the parties the appeal and application are
taken up together and disposed of by this order.
Mr. Kishore Dutta, learned senior counsel representing the
appellant and Mr. Jisnu Saha, learned senior counsel
representing the respondent no. 1/plaintiff upon instruction
have agreed to disposal of the appeal on the following
terms:-
i) The respondent no. 1 will pay Rs.4, 49,
55,000/- being 10% of the contract value, in terms of
the Agreement dated 22.2.2022 to the appellant
within April 30, 2022.
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ii) The parties shall take necessary steps for
finalization of the L/C within a period of three days
from date. The respondent shall make over payment
of the balance amount of the contract value being
Rs.40, 50, 45,000/- through the L/C in accordance
with the contract within 3 days thereafter. The
respondent no. 1 shall be at liberty to lift the
10000MT of LAM Coke thereafter.
Mr. Kishore Dutta, learned senior counsel
representing the appellant, has suggested that in view of
the fact that the appellant would be required to supply
10000MT materials at a reduced price some protection in
the form of bank guarantee or otherwise may be extended
to the appellant.
Mr. Jisnu Saha, learned senior counsel representing
the respondent no. 1/plaintiff, submits that the refusal to
deliver the goods, after the agreement has been concluded,
was illegal and unfair and in the event the suit succeeds
the appellant would have no claim against the
plaintiff/respondent no. 1.
In the plaint it is alleged that the current market
value of the materials would be Rs.67 crores and by reason
of cancellation of the contract the plaintiff/respondent no. 1
would suffer damage to the extent of Rs. 22 crores
approximately.
In order to balance the equities, keeping in mind that
in the event the appellant succeeds, they would be entitled
to the differential amount, we direct the
plaintiff/respondent no. 1 to furnish an unconditional bank
guarantee in favour of the appellant for sum of Rs. 5 crores
within two weeks from date initially for a period of one year
and in the event the arbitration proceeding is not concluded
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within the aforesaid period to keep it renewed till an award
is passed.
In addition to the aforesaid, the plaintiff shall also file
an affidavit of undertaking to be accompanied by the board
resolution of the plaintiff with the Registrar General on or
before 3rd May, 2022 to the effect that in the event an
award is passed against the plaintiff and ultimately
sustained, the plaintiff would pay interest at the rate of
18% p.a from 25th April, 2022 till the realisation of the
amount. The appellant shall also file an affidavit of
undertaking to be accompanied by the board resolution of
the appellant with the Registrar General on or before 3rd
May, 2022 to the effect that in the event an award is
passed against the appellant, the appellant shall pay
interest at the rate of 18% p.a from 25th April, 2022 till the
realisation of the amount.
The aforesaid direction shall not prevent the parties
to challenge the award if so advised in accordance with
law.
The undertakings are without prejudice to the rights
and contentions of the parties in the arbitration proceeding.
In view of the existence of the arbitration clause in
the contract, the parties through their learned senior
advocates have agreed to refer their disputes and
differences to arbitration and have requested this court to
appoint an arbitrator.
On the basis of such request, by consent of the
parties we appoint Hon'ble Mr. Justice Bhaskar
Bhattacharyya, former Chief Justice of Gujrat High Court,
as an arbitrator to decide the disputes and differences of
the appellant and the plaintiff/respondent no. 1.
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We request the learned arbitrator to fix his
remuneration at the first sitting of arbitration.
The parties shall bear all charges and expenses
including the remuneration of the learned arbitrator in equal
measure. This, however, shall not restrict the power of the
learned arbitrator exercising any of the power under Section
31A of the Arbitration and Conciliation Act, 1996.
We request the learned arbitrator to dispose of the
reference as expeditiously as possible.
Since we are of the view that the respondent nos. 2
and 3 are not necessary parties, their representation before
the arbitrator is not necessary.
The suit pending before the trial court shall remain
permanently stayed.
In view of the above, FMAT 137 of 2022 is disposed
of.
In view of the disposal of the appeal, CAN 1 of 2022
is accordingly disposed of."
24. So far as the allegations regarding non-consideration of core
issues by the learned Arbitrator is concerned, the learned Single
Judge, on the basis of materials placed before the court held that in
the facts of the case, it was not justified to come to a conclusion
that the learned Arbitrator did not decide the main issues. The
learned Single Judge, in this regard, noted to the following:
"64. The Learned Arbitrator while deciding the issues held
that the first two issues framed by the Tribunal have lost
their significance after the passing of second order and
need not to be decided in this proceeding. In place of those,
the issue no.3 farmed in this proceeding i.e. (3)"Whether the
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terms of the consent order breached by any of the parties
and if so, who has committed breach?"
.............................................................
…………………………………………………….
“In the present case, the main contention of the petitioner
that the Learned Arbitrator has not decided the first issue
whether there was breach of the terms of the contract dated
22nd February, 2022. By the consent order dated 20th
May, 2022 both the parties agreed with regard to the terms
of payment and delivery of goods. Clause 10 of the Contract
provides for opening of Letter of Credit of the balance
payment, issuance of delivery order upon receipt of full
payment and other conditions. The Learned Arbitrator has
decided issue no.3 with regard to any breach of the consent
order dated 20th May, 2022. The order dated 20th May,
2022, is directly connected with Clause 10 of the
Agreement and the Hon’ble Court had provided for working
arrangement for payment and delivery of the goods. Thus
this Court finds that the issue decided by the Learned
Arbitrator squarely covered the agreement dated 22nd
February, 2022 and thus it cannot be said that the Learned
Arbitrator fails to decide the main issue with respect of the
agreement dated 22nd February, 2022.”
25. We have noted hereinbefore, the several correspondences
exchanged between the parties in respect of mutual obligations in
the contract. It was noted by learned Single Judge that learned
Arbitrator took note of the correspondences and came to a
conclusion that the appellant was responsible for the breach.
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Learned Single Judge, in the impugned judgment and order held
that,
“62. After the order dated 20th May, 2022, the respondent
by an email dated 23rd May, 2022 requested the learned
advocate for the petitioner to advise the petitioner to amend
the Letter of Credit in terms of the order dated 20th May,
2022. Thereafter, several correspondences were made
between the parties but the Letter of Credit was not
finalized and by an email dated 31st May, 2022, the
petitioner informed the respondent that the petitioner is now
proceeding to procure the materials from the market for
which the respondent would be liable for all costs and
consequences, damages suffered and to be suffered by the
petitioner by the illegal act and conduct and breach of the
contract. By the said email, the petitioner called upon the
respondent to refund the sum of Rs. 4,49,55,000/- being
the 10% of the consideration value remitted to the
respondent on 30th April, 2022 and requested for consent
letter for closure and release of the Letters of Credit dated
6th May, 2022 and the Bank Guarantee dated 12th May,
2022.
63. The Arbitrator considering the correspondences between
the parties on and from 23rd May, 2022 till 31st May, 2022
come the conclusion that the respondent has complied with
its obligation in terms of the order dated 20th May, 2022 by
the email dated 23rd May, 2022. The Arbitrator further held
that request for amending the Sight Letter of Credit into a
Usance Letter of Credit is in conformity with the direction of
the Hon’ble Court but the petitioner has not complied with
its obligation in terms of the order dated 20th May, 2022
and on the other hand has illegally terminated the contract
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though there was no violation on the part of the
respondent.”
26. According to the original contract dated February 22, 2022,
the parties agreed to the following payment terms, that is to say:
“10. Payment:
10% advance amount in INR to be paid by buyer to the
seller latest by 22-feb-2022 and balance amount by sight/
usance confirmed, irrevocable lc to be opened before 7 days
prior to arrival of the vessel. Seller will make high seas
sales invoice and agreements upon issue of the bill of
lading. Opening of lc within the stipulated time and in a
mutually agreed format from a first class bank any default
in the aforesaid clause shall give right to the seller, inter
alia, to terminate the contract and proceed for recovery of
damages. Delivery order will be issued upon receipt of the
full payment of the material value from the buyer as per
point no. 4 and 6 above. All other relevant documents
required by the buyer will be provided accordingly to the
extent reasonable.
11. Documentation:
Seller to provide the following documents
A. CEPA certificate in original (for claiming nil basic
custom duty). In case the same is provided by the
exporter, otherwise the same will be local sales
under gst laws;
B. Endorsed bill of lading;
C. Copy of certificate of weight;
D. Copy of certificate of quality;
E. High Sea Sale Agreement;
F. High Sea Sale Invoice;
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G. Any other document as required by custom Haldia
Port/GST Dept./Bank for LC.
12. Documentation required:
Part A: bill of exchange for 100 pct of invoice beneficiary’s
signed commercial invoice in 3 sets stating the full invoice
valueless advance, if any photocopy of high sea sale
agreement
Part B: Debit note for actual demurrage amount lay time
calculation
13. Purchase Terms:
In case seller is unable to sale the met coke (due to
difficulty avilement of zero duty based of CEPF certificates
by the exporter, seller should execute deal by making GST
sells invoice (rate as per point No. 3 & 5) of Met Coke. Buyer
will reimburse actuals following expenses based on prorate
quantity basis.
a. All payment made to port;
b. All payments made to cha for handling the cargo
and loading on the trucks.”
27. By order dated May 20, 2022, the parties were expected to
convert the Sight Letter of Credit into one as Usance Letter of Credit
upon request by the respondent. As noted above, it was noted by
learned Single Judge that such request was duly made by the
respondent through email correspondences. However, the same was
never carried out by the appellant. It went on killing time on one or
the other pretext and therefore the appellant was held to be guilty
for the breach. It is admitted position that the respondent, on every
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occasion, expressed its readiness and willingness to supply the
agreed quantity of goods.
28. As regards the reliefs granted by learned Arbitrator in the
form of damages and rejection of the claim of the appellant, the
learned Single Judge noted the claim of the appellant, objections
and counter claim preferred by the respondent and also the findings
of learned Arbitrator on such issues and held to the following,
“68. Learned Arbitrator categorically held that the petitioner
was fully conscious that on the consent of the parties, the
respondent was restrained from disposing of the goods till
13th June, 2022, it could not before that day terminate the
contract when the price of goods were falling in the market
from the contract price and abandon its prayer for Specific
Performance. Learned Arbitrator found that the petitioner is
guilty of non-compliance of the order dated 20th May, 2022
and it is the duty of the Arbitrator to restore to the
respondent, the loss suffered by it for the order of injunction
imposed against the respondent. The Arbitrator also held
that the litigant cannot take benefit of the interim order after
having lost on merit and the benefit so taken must be
restored to the other party who suffered such interim
order.”
69. In the present case while ascertain the damage suffered
by the respondent, the Learned Arbitrator has decided as
follows:
“54. After taking into consideration the materials on record
showing the admitted rate of the goods in question as
would appear from the uncontroverted documents marked
as GG, HH, II, JJ, of the SOD, and also the consent order of
25the Hon’ble High Court dated 28th April, 2022 which is
marked as FF of the SOD, the Respondent has been able to
successfully establish the following facts:
A. The market price of the goods in question on April 25,
2022 was Rs. 52,033/ (Rupees Fifty two thousand and
thirty three only) (exclusive of handling and other charges)
per MT and the Respondent is entitled to get damages for
being unable to sell the goods at such price due to the order
of injunction passed against it on the representation of the
Claimant that it would purchase the goods at the
contractual rate of Rs. 46000/- per MT.
B. The contract price of the said goods being Rs. 46,433/-
Per MT and the fact that the Respondent could have sold
the said goods even at the rate of Rs. 52,033/- (Rupees
Fifty two thousand and thirty three only) (exclusive of
handling and other charges) per MT, it was therefore
entitled to the difference, being Rs. 5,600/- per MT.
Consequently, it could receive an additional amount of Rs.
5,60,00,000/- (Rupees Five Crore and Sixty lakh only),
being the difference in the price of the said 10,000 MT of
goods, the total subject matter of the aforesaid contract,
C. The Respondent is also entitled to port charges in respect
of the said consignment for the period April 21, 2022 to
June 13, 2022, the date till which it was restrained by the
order of injunction by virtue of the second consent order
dated 20th May, 2023, amounting to Rs.18,12,400/-. The
claimant is also bound to compensate the respondent for
the handling charges which the Respondent has incurred
because of the claimant’s failure to take delivery of the
goods. Consequently, the Respondent is entitled to a sum of
Rs. 29,37,972.08/- on account of handling charges from the
claimant as would appear from the uncontroverted Bills
26and/or documents in support of such claims which are
collectively annexed and marked “HH” to the SOD
D. The Respondent has paid the supplier / seller of the said
consignment, viz. Noble Resources, a sum of Rs.
59,75,04,799.65/- for the quantity of 11,500 MT on May
13, 2022 as would appear from the document marked II to
the SOD which remains uncontroverted. In terms of the said
contract, the Respondent could have received the contract
value of the goods amounting to the sum of Rs.46, 00,
00,000/- through letter of credit which the claimant was
obliged to establish on or before 14th April 2022. The
Respondent would have received the value of the letter of
credit in the minimum sum of Rs. 56, 00, 00,000/- latest by
30th April 2022. However, the respondent has been
deprived of the price of goods by Claimant in the facts and
circumstances stated in paragraph 3 of the foregoing
statement of defence till 13th June 2022. The Respondent
is, therefore, entitled to and claims interest at 18% per
annum on Rs. 11, 80, 00,000/- from 1st May 2022 till 13th
June 2022.
E. As would appear from the documents marked as JJ to
the SOD, the market price of the goods on 14th June was
Rs. 45780.13/- реr МТ. The Respondent is, accordingly,
entitled to the difference between market price of the goods
on 14th June, 2022 and the contract price being the sum of
Rs.21,98,700/- (Rs.46,00,00,000/- minus
Rs.457,801,300/- = Rs.21,98,700).”
29. In consideration of the aforesaid facts and circumstances of
the case and materials on record the learned Single Judge refused
to interfere with impugned arbitral award dated October 16, 2023. It
27
is trite law that the scope of intervention of the Court in arbitral
matters is virtually prohibited, if not absolutely barred and that the
interference is confined only to the extent envisaged under Section
34 of the Act.
30. Award dated October 16, 2023 contains reasons. Learned
Arbitrator considered all contentions raised by the parties, the
materials placed before him. He pronounced on the issues raised.
The decision of the Arbitrator as recorded in the award dated
October 16, 2023 cannot be said to be perverse.
31. Likewise, the learned Single Judge dealt with the contentions
raised before it in the impugned judgment and order dated January
6, 2025. Appellant did not establish the impugned judgment and
order dated January 6, 2025 to be perverse. The appellant did not
establish the award dated October 16, 2023 to suffer from any
patent illegality.
32. In view of the discussions made hereinbefore as well as in
consideration of the provisions of Section 37 of the Arbitration and
Conciliation Act, 1996, we are not in a position to arrive at a
conclusion that in passing the impugned judgment and order, the
learned Single Judge failed to exercise its jurisdiction or exceeded
the jurisdiction vested in it under Section 34 of the Act of 1996.
28
33. Consequently, the instant appeal being AO-COM 11 of 2025
stands dismissed, however, there will be no order as to costs.
34. Urgent photostat certified copy of this judgment, if applied
for, be supplied to the parties on priority basis upon compliance of
all formalities.
[MD. SHABBAR RASHIDI, J.]
35. I agree.
[DEBANGSU BASAK, J.]
