The court affirmed that the lack of explicit contract terms for advance payments and preconditions led to a ruling of breach by the appellant, validating the Arbitral Tribunal's awards for excess purchases and loss of profits.

JUDGMENT :

Sabyasachi Bhattacharyya, J.

1. The present appeals under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the 1996 Act”) arise out of judgments passed under Section 34 of the 1996 Act, affirming the awards passed in two arbitration proceedings between the same parties, which emanated from two substantially similar agreements entered into between the parties.

2. In case of F.M.A. No. 939 of 2012, an agreement was entered into on March 11, 2004, whereby the respondent/appellant, the Orissa Minerals Development Company Limited (“Orissa Minerals”, for short) agreed to supply to the respondent Jai Balaji sponge grade calibrated iron ore of 65% (Fe 05-18mm) to the tune of 7,000 Metric Tonnes per month for the period between April 1, 2004 and March 31, 2005, renewable subject to mutual acceptance of the parties as regards the terms and conditions.

3. In F.M.A. No. 941 of 2012, an agreement was entered into on August 13, 2003 for a period of one year from October 1, 2003 to September 30, 2004, whereby the respondent/appellant was to provide to the claimant/respondent iron ore of 63% (Fe 10-30mm) to the tune of 1,00,000 tonnes (± 25%) per annum.

4. Subsequently, the claimant/respondent raised disputes as to the quality of the products supplied. The respondent/appellant stopped supply on the ground of non-payment of the full amounts due for such iron ore after June, 2004 in both the cases.

5. This led to the claimant/respondent referring both the matters to arbitration, leading to the impugned awards being passed. The Arbitral Tribunal passed awards under the heads of excess amount spent in purchasing 43,413.70 MT of iron ore from other suppliers due to stoppage in supply by the appellant Orissa Minerals and on account of loss of profits. Simple interest was awarded in each of the cases from October 1, 2004 till realisation on the amount of excess amount spent in F.M.A. No. 941 of 2012 and from January 1, 2005 at the same rate, also for the excess amount spent in purchasing the balance iron ore in F.M.A. No. 939 of 2012. In both the awards, simple interest was also granted (@ 6% per annum in F.M.A. No. 941 of 2012 and @ 10% per annum in F.M.A. No. 939 of 2012) on the principal amounts of loss of profits, from the date of award till realisation.

6. Challenging the same, applications under Section 34 of the 1996 Act were preferred, which were dismissed, thereby affirming both the awards, leading to the present appeals under Section 37 of the said Act being filed.

7. Learned senior counsel appearing for the appellant argues that the Arbitral Tribunal erroneously arrived at the finding that there was a breach of contract on the part of the appellant, by overlooking the mandatory provisions in both the Agreements that the goods (iron ore) would only be supplied on 100% advance payment being made and a prior demand being made by the claimant/respondent, as well as that the claimant/respondent was to p