Point of Law: Claim of damages against JOPL in respect of another contract - There was no requirement for JOPL to lead any evidence. Its claim was founded on an admission on part of SAIL that sums as claimed were due and payable to JOPL. Onus to prove that SAIL was entitled to withhold admitted sums against any other claim, rested on SAIL. And, it failed to discharge said burden.

JUDGMENT :

VIBHU BAKHRU, J.

1. Steel Authority of India Limited (hereinafter ‘SAIL’) has filed the present petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter the A&C Act) impugning an Arbitral Award dated 02.11.2020 (hereafter ‘the impugned award’) delivered by the Arbitral Tribunal comprising of three Arbitrators [Justice (Retd.) V.K. Gupta, former Chief Justice of Uttarakhand High Court, Sh. R.P. Singh, Director (HR and Legal), IIFCO and Justice (Retd.) Madan B. Lokur, former Judge of the Supreme Court of India as the Presiding Arbitrator].

2. The respondent (hereafter ‘JOPL’) is a company incorporated in Singapore and was the claimant before Arbitral Tribunal. SAIL is a Public Sector Enterprise, inter-alia, engaged in manufacture of steel. The arbitration between the parties was an international commercial arbitration within the meaning of Section 2(1)(f) of the A&C Act. It was conducted under the aegis of Delhi International Arbitration Centre and in accordance with its Rules.

3. JOPL is engaged in the business of maritime logistics including vessel operations and chartering. The parties (SAIL and JOPL) had executed a Charter Party on 21.02.2018 (hereafter ‘the Charter Party’) whereby JOPL agreed to load, carry and discharge cargo of 75,000 metric tons (5% more or less at the owners' option) of Bulk Coking Coal to ports in India. In terms of the Charter Party, 78,798.860 metric tons of Coking Coal was shipped on board the vessel MV “Ionic Kizuna” at the load port of Norfolk, Virginia on 21.02.2018.

4. The vessel arrived at the discharge port of Vishakhapatnam on 21.05.2018 and 45,564 metric tons of the cargo was discharged at the said port. Thereafter, the vessel proceeded to the port of Haldia and discharged the balance cargo of 33,234,86 metric tons at the said port.

5. In terms of the Charter Party, SAIL also paid 90% of the agreed consideration.

6. On 05.09.2018, JOPL issued an invoice for an amount of USD 528,634.64 being the balance freight plus demurrages incurred at the load port and the discharge ports, payable by SAIL, in terms of the Charter Party.

7. On 03.10.2018, SAIL responded to the said invoice enclosing its calculations of lay time. It agreed to the demurrages in the sum of USD 278,924.49 incurred at the load port and USD 6,205.68 at the discharge ports. It accepted that a balance of USD 515,739.88 was payable to JOPL. In view of the communications exchanged between the parties, on 13.12.2018, JOPL issued a revised invoice for a sum of USD 515,739.88 as agreed by SAIL.

8. There is no dispute between the parties as to the amount payable by SAIL under the Charter Party. There is also no dispute that JOPL had duly performed its obligations under the Charter Party. However, SAIL withheld the admitted balance amount payable to JOPL for the reason that it had raised a claim of damages against JOPL in respect of another contract Contract of Affreightment dated 28.06.2017 for shipping cargos of limestones (hereafter ‘the Contract of Affreightment’).

9. JOPL had not provided a vessel under the Contract of Affreightment for the 20th shipment and SAIL was compelled to make alternate arrangements for the same. SAIL claimed that JOPL had breached its obligations under the Contract of Affreightment and raised the claim for damages quantified at the additional expenses incurred by it to arrange for shipment of balance quantity of limestone. JOPL disputed the said claim. According to JOPL, it was not obliged to provide a vessel as the shipment period under the Contract of Affreightment had come to an end.

10. The disputes between the parties arising as a result of SAIL withholding the admitted amounts due under the Charter Party, were referred to arbitration. JOPL filed its Statement of Claims before the Arbitral Tribunal, inter-alia, claiming a sum of USD 515,739.88 along with interest at the rate of 12% per annum compounded basis at three monthly rests from 30.09.2018 until the date of payment. J