( 1 ) BY this Appeal filed under section 37 of the Arbitration and Conciliation Act, the appellants challenge the order dated 9th August, 2004 passed by the Arbitral Tribunal.

( 2 ) THE facts that are material and relevant for deciding this Appeal are : in july, 1999, the appellants invited a tender bearing No. MRBC/dbg/mm/rigs (CH)/51 (46)/990t-873 for the charter hire of one slot/cantilever type Jack up rig.

( 3 ) IN response to the invitation of the aforesaid tender, five bidders submitted their offers including the respondents and one M/s Neptune exploration and Industries Ltd. (hereinafter referred to as "m/s Neptune") was also one of the bidders. The respondents and M/s Neptune offered the same Rigs "sakhalinskaya" and "kurilskaya" for the said tender. The appellants had called upon the respondents and M/s Neptune to clarify and inter alia confirm the availability of the said Rigs. M/s Neptune furnished to the appellants a letter dated 8th December, 1999 from M/s Osneft Sakhalinmorneftegaz, the rig owners regarding the availability of the two rigs to the aforesaid two bidders namely M/s neptune and the respondents. By a letter dated 22nd December, 1999, the appellants called upon the respondent inter alia to confirm : (a) continued availability of Rig Sakhalinskaya against tender along with confirmation thereof from the owners to enable the appellants to consider the offer for the said Rig; (b) to confirm details in respect of the said rig Kurilskaya with documentary proof from the owner, as details submitted by M/s Neptune were different from those submitted by the respondents. By this letter, the appellants intimated the respondents that they were in receipt of communication dated 8th December, 1999 which had been addressed to the respondents by the owners of the Rig sakhalinskaya. Due to the said letter having been communicated to the appellants, the appellants had sought clarification from the respondents regarding the continued availability of the said rig. By letter dated 22nd December, 1999, the respondents replied to the appellants' letter dated 22nd December, 1999. The respondents stated that they had signed agreement dated 20th August, 1999 with the owner of the rig and as per the said agreement, the owner of the said rig would invest in the rig for upgradation to meet the appellants' tender specifications. In respect of Rig Sakhalinskaya, the respondents submitted MOU dated 20th August, 1999 executed with the owners to the appellants. Letter from m/s Soil Mee which is referred to in the respondents' aforesaid letter is dated 13th December, 1999 confirming that upgradation of rig from 850 thousand LBS to 13 lakhs LBS (Mast) was possible. The respondents stated that they had valid documents in their favour for mobilization of both the rigs and assured the appellants that Rig Sakhalinskaya would be available to them for the duration of contract. By letter dated 3rd January, 2000, the appellants informed the respondents that their offer for both the rigs i. e. Sakhalinskaya and Kurilskaya was being considered for the price bid opening. The price bids were opened on 6th January, 2000 and the respondents were found to be the lowest tenderer in respect of the said two rigs. By letter dated 17th January, 2000 addressed by the owners of the rig with copy to the respondent that rig owners recorded that Rig kuriiskaya was being withdrawn from the appellants tender so as not to jeopardize the drilling programme of the appellants. On 20th January, 2000, the appellants placed on the respondents, a firm work order bearing No. DY8df158 for charter hire of one rig by the name "sakhalinskaya" with an ODR of US $ 21,637 and EDR US$ 21,990. 21.

( 4 ) THE respondents furnished to the appellants an irrevocable and unconditional Performance Bank Guarantee bearing No. IDBIBK/no/bg-2000/f-1 dated 3rd February, 2000 for a sum of US$ 601, 982. 00 issued by IDBI bank Ltd. , Siri Fort Branch, New Delhi. By the said guarantee, it