Judgment :

Nyapathy Vijay, J.

The present appeal is filed under Section 37 of Arbitration and Conciliation Act, 1996 questioning the order dated 12.09.2024 passed by the learned single Judge of this Court in I.A.No.2 of 2024 in ICOMAOA.14 of 2024.

2. Facts of the case: The brief facts leading to this case are as under:

The 1^st Respondent company was registered under the Laws of Hong Kong and the Appellant company was incorporated under the Indian Companies Act, 1956 and both are engaged in the business of trading of iron ore. The Appellant and Respondent No.1 had executed a contract on 19.12.2023 for sale/purchase of 55000 WMT (+/- 10% WMT) iron ore fines vide contract No.BST/TUF/20231219. As per the contract, the Appellant represented that the Cargo with certain specifications would be supplied. The relevant part of the specification for the purpose of this case is that the iron ore would be having an ‘Fe’ content of 56%.

3. As per Clause 4.1 of the Contract, the base price of the Cargo was USD 96.00 per DMT CFR FO on the premise that the cargo of iron ore has 56% ‘Fe’ content. As per Clause 5, if the ‘Fe’ content of the Cargo was below 54.00%, the 1^st Respondent had a right to renegotiate the price.

4. As per Clause 6 of the Contract, 96% of provisional payment would be made by the 1^st Respondent on submission of Letter of Credit (L/C). The balance of 4% payment would be realized by submission of documents referred in Clause 7.2 of the Contract. The certificates of quality and quantity issued by a named surveyor S.K. Mitra would be the basis on which the provisional payment of 96% would be made and the clause further provided that the final survey of the Cargo would be conducted by C.I.Q (Entry-Exit Inspection and Quarantine of the People’s Republic of China) for determining the final quality and quantity of the Cargo shipped. The contract provided that the CIQ results at the discharging port would be final. The ‘Fe’ refers to the iron content in the Cargo.

5. While so, a Cargo was loaded at Vizag port on ‘MV Oriental Wind’ by the Appellant on 08.01.2024 along with a certificate issued by the nominated surveyor i.e. S.K. Mitra. As per the certificate issued, the ‘Fe’ content of the Cargo is 56.04%. Upon shipment of the Cargo and after due submission of document (L/C), the Appellant realized provisional payment of 96% of the value of the Cargo amounting to US$ 4,908,653.99. The Cargo was discharged at Lanshan port, China on 28.01.2024. On inspection of the Cargo by CIQ at the discharge port, the ‘Fe’ content of the Cargo was found to be an average of 52.21%. As the CIQ report was final, as per clause 9 of the Contract, since the ‘Fe’ content of the Cargo was less than 54%, the Respondent No.1 invoked the contractual clause and called for a price re-negotiation.

6. After negotiations, Addendum No.BST/TUF/20231219-1 dated 06.03.2024 was executed by the Appellant and Respondent No. 1. As per the Addendum, the parties agreed to appoint third-party agency, selected by Respondent No.1 i.e. Bureau Veritas (BV), to conduct dynamic re-sampling and re- inspection of the Cargo. On 30.04.2024, BV issued a certificate that the average ‘Fe’ content of the Cargo was 52.60%. On the basis of the BV certificate, the price of the Cargo was to be adjusted with reference to the prevailing import price for ‘Fe’ 53-52% of Indian Origin at the time of issuance of certificate by BV.

7. Parallelly, the Respondent No.1 sold the Cargo to an importer in China, i.e. New Tianjin Steel ITG Mining Company Ltd., which in turn sold the Cargo to its buyer, one Zhejiang Hanggong Energy Co., Ltd., in the domestic market in China @ US$ 56/DMT which was the prevailing import price in China for Indian origin iron ore fines having ‘Fe’ content of 53-52%. Accordingly, the Respondent No.1 sought for re-negotiation of the original price of the Cargo. As per the Addendum dated 06.03.2024, the price payable by the Respondent No.1 for the Cargo @ US$ 56/DMT for 51,915.17 DMT was 2,