I.P. Mukerji, J.

EC No. 311 of 2013

In an execution application to enforce a foreign arbitral award dated 23rd February, 2013, in favour of the petitioner, the judgment debtor has taken various points to challenge this award under Part-II chapter-I of the Arbitration and Conciliation Act, 1996.

The award is of the Refined Sugar Association 154, Bishopsgate London made and published by its Chairman.

The alleged contract was entered into between the parties on 21st December, 2010.

The petitioner was the seller and the judgment debtor, the buyer. The opening words of the contract document recited as follows:-

“We confirm having sold to you under the following terms and conditions stipulated hereinafter”.

The contract was for sale of 12,500 MT of white sugar, described as “Thailand Refined Sugar”. It was to be shipped in 250 lots of 50 MT each in polypropylene bags each of 50 Kg. net. The load ports were to be Bangkok and two other ports in Thailand. The shipment was to be made between 10th March, 2010 and the 15th May 2010. The above quantity was to be shipped in a maximum of three full vessels and the balance in containers. It was a FOB Contract.

There was a technical stipulation with regard to fixation of the price, which has given rise to a part of the present dispute between the parties. According to the contract;

“Basis BEO for 250 lots (Basis 12,500 Metric Tons) of the March 2010 London No.5 white sugar contract plus a premium or US$ 15.00 ( Fifteen) per metric ton to give a price in metric tons, basis FOB stowed Bangkon and/or Sriracha and/or Laemchabang and/or Kohsichang. Each lot is equivalent to 50 metric tons. The buyer has to finally price the nearest lot quantity to match the final shipped quantity. Pricing to be fixed 5 days before the terminal expires or 20 days before the vessel arrival at the load port”.

The judgment debtor was to deposit US$ 1 lakh in the account of the petitioner within four working days of receiving the contract. They were also required to open a fully “workable and irrevocable letter of credit” in favour of the petitioner.

The contract contains an arbitration clause which is as follows:-

“All disputes arising out of this contract are hereby submitted to the Refined Sugar Association for settlement in accordance with the Arbitration rules of the Refined Sugar Association.”

It would be governed by the laws of England.

It appears that the judgment debtor neither made the deposit 1 lakh US dollars nor opened the letter of credit in favour of the petitioner. The period for performance of the contract expired. The judgment debtor did not buy any sugar from the petitioner.

An attempt was made to settle the dispute between the parties. It failed. On 29th June, 2010 the petitioner wrote to the judgment debtor alleging repudiation of the contract by them and accepting this repudiation. Therefore, we can safely say that on 29th June, 2010 the contract between the parties was terminated without any performance. According to the petitioner the pricing of the contract was completed on 13 February 2010 resulting in an average price, including premium, of US$ 744.9832 per MT. According to the petitioner there was a fall in price and they suffered loss. The claim under the contract was calculated to be US$ 1,509,200. By the said award the respondent was directed to pay to the petitioner.

a. US$ 1,646,311.56, comprising the principal sum of US$ 1,509,200.00, plus interest of US$ 137,111.56; and

b. Compound interest on the said sums, which total US$ 1,646,311.56, at 90 day rests, at a rate of 8% per annum from and including the sate following the date of this Award until payment is made.

The respondent was also directed to pay costs to the petitioner.

The award was passed by the Arbitral Tribunal in London. The judgment debtor did not prefer any application to challenge the award in an English Court, to which such application necessarily lay.

This award is a foreign award under the description of New York Convention Award