Error Hyperlink reference not valid., J (ORAL)

1. OMP No. 65/2000 petition has been filed under Section 34 of Arbitration and Conciliation Act, 1996 (hereinafter referred to as “Act, 1996”) challenging the Award dated 24th November, 1999 passed by Mr. Datuk George K.S. Seah, Sole Arbitrator.

2. Briefly stated the facts of this case are that on 29th June, 1995 a contract being No. C-6051 was executed between the petitioner-objector and respondent-claimant wherein respondent-claimant had by 30th September, 1995 agreed to supply 10,000 Metric Tonnes of Prime Mild Steel Hot Rolled Plates of DIN 17100 JAN 1980 GR Rs. 37.2 at a price of U.S.$408 per Metric Ton Free on Board.

3. On 3rd August, 1995 respondent-claimant served Notice of Readiness (in short “NOR”) of material on petitioner-objector requesting it to nominate a suitable vessel in terms of the stipulation contained in the aforesaid Contract. The 35 days? period for nomination of vessel as per Clause 4 of the Contract expired on 7th September, 1995.

4. It is pertinent to mention that between 3rd August to 17th August, 1995, the entire quantity of 10,000 MT steel plates was transported to the Loadport and kept ready for shipment under the continuous supervision and inspection of M/s. SGS India Ltd., the mutually appointed pre-shipment Inspection Agency under Clause 4.1.3.2. The goods to be sold were found to be in conformity with the Contract by the mutually appointed independent Inspection Agency.

5. Petitioner-objector vide its various communications confirmed that it was working to nominate a vessel and was willing to extend the Letter of Credit, but the vessel was not nominated despite repeated confirmations.

6. On 30th September, 1995 the Letter of Credit for shipment expired and petitioner-objector committed breach of contract by failing to lift the consignment. It was only on 19th October, 1995 that petitioner-objector for the first time complained about the condition of steel plates.

7. On 18th November, 1995 respondent-claimant treated the Contract as closed and on 26th December, 1995 it asked the petitioner-objector to make good the loss of US$ 1,330,000 along with interest upto 31st December, 1995. On 15th January, 1996 petitioner-objector wrote to respondent-claimant that it was surprised to receive the above claim without any supporting document.

8. On 5th June, 1998 respondent-claimant invoked the arbitration clause being Clause No.13 contained in the Contract and filed a request for arbitration before International Chamber of Commerce (in short “ICC”), Paris claiming a sum of US$ 1,330,000 along with interest. The said claim was based on the respondent-claimant?s contention that the contracted price of the steel plates was US$ 408 per Metric Ton and the market price of the said goods was US$ 275 per Metric Ton. Consequently, according to respondent-claimant, it had suffered a loss of US$ 1,330,000 (being the difference between US$408- US$275 per Metric Ton) on 10,000 Metric tonnes of steel plates.

9. In July, 1998 petitioner-objector?s advocate wrote to respondent-claimant asking for inspection of documents referred to and relied upon by them in their request for arbitration. However, on 13th August, 1998 respondent-claimant declined the request for inspection on the ground that the sole arbitrator had not yet been appointed.

10. On 23rd February, 1999, the Arbitrator in accordance with Rule 18 of the ICC Arbitration Rules framed the Terms of Reference. The relevant portion of the Terms of Reference reads as under :-

“h) The Claimant maintained that the market price prevailing at the relevant time when the contract was closed unilaterally by the Respondent was US$ 275 per tonne as per the documentary evidences annexed by the Claimant instead of US $408 per tonne i.e. the sale price agreed between the parties. Hence, the Claimant had suffered the PECUNIARY loss of US$ 1,330,00 and interest thereof US $610,306 @ 18% per annum from 3.11.9