The court upheld the Arbitral Award, affirming that timelines and knowledge of the transaction were not claimed by the petitioner regarding delayed delivery impact.

JUDGMENT :

SUBRAMONIUM PRASAD, J.

I.A. 42145/2024

1. This is an application on behalf of the Petitioner for condonation of delay in re-filing.

2. For the reasons stated in the application, the delay of three days in re- filing is condoned.

3. The application is disposed of.

O.M.P. (COMM) 436/2024 & I.A. 42142/2024, I.A. 42144/2024

1. The instant petition is one under Section 34 of the Arbitration & Conciliation Act, 1996 challenging an Award dated 01.06.2024 passed by the learned Sole Arbitrator.

2. By virtue of the Award, the learned Sole Arbitrator has allowed the claim of the Respondent herein and has dismissed the counter claim of the Petitioner herein.

3. Shorn of unnecessary details, the facts which are relevant for the purpose of this challenge are as under:-

i. The Petitioner is a private limited company engaged in the manufacturing of wearing apparel. It is stated that the Respondent herein is also a private limited company engaged in the supply of fabrics.

ii. It is the case of the Petitioner that it was approached by the Respondent for supply of fabrics. It is stated that the Petitioner placed four purchase orders for supply of fabrics on the Respondent, which are as follows:-

a) Purchase Order No.305 dated 25.11.2019 for 23,000/- mtr.

b) Purchase Order No.310 dated 19.12.2019 for 18,000/- mtr.

c) Purchase Order No.311 dated 19.12.2019 for 12,000/- mtr.

d) Purchase Order No.2201 dated 20.02.2020 for 6,000/- mtr.

iii. The claim of the Respondent is for the price of the goods delivered to the Petitioner. As per the statement of claim, the Respondent has made a claim of Rs.1,38,62,111.96/-, being the unpaid amount of the fabrics supplied to the Petitioner.

iv. The case of the Petitioner herein, i.e., the Respondent in the proceedings before the learned Arbitrator, was that the goods were not delivered on time by the Respondent/Claimant and due to the delay in supply of fabrics by the Respondent, the Petitioner herein failed to complete the onward orders placed by the purchaser, i.e. one M/s Trent Limited, which resulted in cancelling of the order.

v. It is the case of the Petitioner that they received a huge order from the said M/s Trent Limited for supply of wearing apparel on urgent basis. It is the case of the Petitioner herein that on coming to know of such an order, the Respondent herein approached the Petitioner for of supply of fabrics for the said order and the Petitioner herein placed orders for supply of fabrics with the Respondent herein.

vi. It is the case of the Petitioner that since the Respondent failed to deliver the fabrics on time, M/s Trent Limited cancelled all the purchase orders placed by it with the Petitioner herein. It is stated that the goods could not be sold to anybody else and the Respondent also did not take back all the material.

vii. The Respondent being a Micro, Small and Medium Enterprise (MSME), approached the MSME Council. The MSME Council referred the dispute to Delhi International Arbitration Centre (DIAC) under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 ( in short 'MSMED Act').

viii. A Sole Arbitrator was appointed by the DIAC on 29.01.2024. Along with the Claim Statement, the Respondent/Claimant also placed to its registration under the MSMED Act. A copy of the Registration of the Udyog Aadhar number was appended to the Statement.

ix. In the statement of defence, the Petitioner herein disputed the entire claim of the Respondent herein and it is the case of the Petitioner herein that