Manmohan, J. (Oral) - O.M.P. No. 40/1999 has been filed under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "Act, 1996")' challenging the majority arbitral award dated 23rd August, 1999 to the extent it awards respondent-claimant's claim with regard to Contract No. 35 executed between the parties.

2. The facts relevant for this case are that on 14th October, 1991, Contract No. 35 was executed between petitioner-objector and the respondent-claimant for sale of 50,000 metric tonnes of Muriate of Potash (MOP) at a price of Rs.2,766.50 per metric ton (F.O.B). The said contract contained a payment clause whereunder petitioner-objector was to open a Letter of Credit with the Bank of Foreign Trade of USSR, Minsk, valid for a period of 90 days. The relevant portion of the payment clause is reproduced herein below:

" Paymellt -

Within 7 days after receiving the sellers' telegraphic advice of the readiness of the goods for shipment, the buyers shall open by cable with the Bank for Foreign Trade of the USSR, Minsk, in favour of the sellers an irrevocable Letter of Credit in Indian Rupees for the 80.5% value of the goods mentioned in the sellers' cable plus 5'Y., to cover possible increase of the quantity of the shipment. The Letter of Credit shall be opened for validity of 90 days. Payment of the goods shall be made in Indian Rupees through the aforesaid Letter of Credit against presentation to the Bank for Foreign Trade of the USSR, Minak of the under mentioned documents. It is agreed that for the shipment of 50,000 i.e. 5%, 95% less franchise of 0.5% of the invoice value will be payable. Balance will be payable after discharge port results are found in conformity with the contractual specifications, etc. In case of variations, penalty imposed by the Ministry of Chemical and Fert. Govt. of India would be adjusted from the amount due to the Sellers.

(i) Copy of Tlx advice from sellers to Buyers immediately upon sailing of the vessel giving name of the vessel, date of sailing, quantity loaded and invoice value.

(ii) Full set of .clean on board. Bill of Lading in long form (one original and 3 copies) showing the Ministry of Chemical & Fertilizer (Deptt. of Fert.) as Consignee- marked freight payable by the Charterers Hotify-Ministry of Chemicals and Fertilizers (Deptt. of Fert.) Charter party bills of lading acceptable provided it bears an endorsement that all terms and conditions of the relevant Charter Party are deemed to have been incorporated therein.

(iii) Invoice in four copies in the name of the IDITC on behalf of Ministry of C & Fert. (Deptt. of Fert.)

(iv) Certificate of weight issued by the port authority, otherwise Bill of Lading will serve as weight certificate.

(v) Certificate of Quality issued by the Sellers/Producer.

(vi) Certificate of Origin in four copies.

(vii) Sellers' Certificate showing 2 original Bill of Lading........... ..."

3. On 24th October, 1991, petitioner-objector who was the purchaser opened a Letter of Credit for 25,000 metric tonnes, valid for a period of 90 days, that means, valid till 22nd January, 1992.

4. Fearing disintegration of USSR, respondent-claimant wrote to petitioner-objector requesting it not to pay under the Letter of Credit. Petitioner-objector on its part, vide letter dated 20th December, 1991, instructed its banker Oriental Bank of Commerce, not to pay under the said Letter of Credit.

5. As USSR disintegrated on 31st December, 1991, petitioner-objector /buyer and the respondent-claimant/seller agreed to amend the payment clause in the contract as under:

"MMTC is also agreeable to make payment in Indian Rupees under L/C or CAD basis, into the sellers' account with a Bank in India, if such an account is established with prior approval of the Reserve Bank of India and Government of India for purpose of exports from India to Belorussia."

On 5th December, 1991, the vessel with cargo left the Russian port and it arrived in India on 5th January, 1992.

7. On 14th