IMPORTANT POINTS
1. In case, final settlement has been reached amicably between the parties even by making certain adjustments and without any misrepresentation or fraud or coercion, then, acceptance of money as full and final settlement/issuance of receipt or vouchers etc. would conclude the controversy and it is not open to either of the parties to lay any claim/demand against the other party.
2. Where one knowingly accepts the benefits of a contract or conveyance or an order, is estopped to deny the validity or binding effect on him of such contract or conveyance or order.

JUDGMENT

Dr. B.S. Chauhan, J. —

1. The arbitration applications under Section 11(5) & (9) of the Arbitration and Conciliation Act, 1996, hereinafter called the “Act 1996” have been filed for appointment of Arbitrator in an international arbitration dispute to adjudicate the disputes/differences which have arisen between the parties.

2. The applicants are a partnership concern incorporated under the Indian Partnership Act, 1932 and have filed two applications as the dispute raised herein relate to two consignments. However, for convenience, facts and issues related to Petition No.7/2009 are being considered.

3. On 24.6.2008, a Purchase Contract bearing No. CCT/SST/027/ 240608 was entered and executed by and between the applicants and the respondents wherein the applicants agreed to sell and the respondents agreed to purchase Calibrated Lumpy Ore Fines of the approximate quantity of 40,000/- Wet Metric Tones (hereinafter called as ‘WMT’) (10% more or less at buyers’ option) at the price and on the terms and conditions stipulated in the said agreement. The agreement provided for the chemical specification/composition of the Ore and for guaranteed level of Fe i.e. iron content in the contracted goods which could not be less than 63%. In case the iron content was less than 63%, the buyer would have a right to reject the cargo.

4. A large quantity of Ore had been supplied to the respondents which had been accepted and payments had been made. Pursuant to the purchase contract, the applicants on 6.8.2008 shipped a total consignment of 24,500 Dry MT of Calibrated Lumpy Ore from New Mangalore Port, India to the port of discharge viz. Rizhao Port, China by vessel named “MV. FUJIN”. The applicants raised a provisional invoice for a sum of US$ 32,13,529.11 and sent a Certificate of Origin and the Bill of Lading dated 6.8.2008 as issued by the carriers in respect of the carriage of the goods from Mangalore Port, India to Rizhao Port, China. The material so supplied had been sent after proper analysis and it had been certified by the analyst in India that the goods supplied contained more than 63% Fe contents. The said goods reached at China Port. The delivery of the same was taken by the respondents and on chemical analysis, according to them, the iron contents Fe, were found to be 62.74%. The goods reached the Port of Discharge, and were accepted by the respondents-buyers who promised that payment would be made without any delay.

5. The respondents vide email dated 19.9.2008 informed the applicants that a provisional payment would be released for the shipment in question based on revised rates and, in case, the applicants were willing to accept the revised rates stipulated therein, the respondents would request their end buyers’ confirmation to release the payment, and for that purpose, applicants were asked to send necessary instructions through their banker. The respondents vide email dated 7.10.2008 informed the applicants that US$ 1.5 million could be the amount for the final settlement in respect of the shipment in question, in spite of the fact that the agreed amount had been US$ 18,91,204.00. By the said email, applicants were asked by the respondents to inform through their banker in case of their acceptance to the said proposal. Under these peculiar facts and circumstances, as the goods had already reached China and applicants were in dire need of money, they informed through their banker that they agreed to receive payment under the Letter of Credit in a sum of total claim of US$ 18,91,204.00. By email dated 7.10.2008 the respondents stated that the applicants should accept US$ 1.5 million in full and final settlement. Accordingly, an amount of US$ 1.5 million had been received by them. Subsequent thereto, the applicants had repeatedly been sending reminders to the respondents to make good the balance payment under the said purchase contract, but no payment had been made. As the respondents failed to make the payment of the b