The court reaffirmed that a party's failure to raise specific contractual defenses during arbitration precludes them from asserting those defenses in subsequent petitions, maintaining the integrity of arbitral proceedings.

JUDGMENT :

MANMEET PRITAM SINGH ARORA, J.

CM APPL. 6615/2026 (for exemption)

1. Allowed, subject to just exceptions.

2. The application is disposed of.

FAO (COMM) 32/2026

3. This is an appeal under section 37 of the Arbitration and Conciliation Act, 1996 (‘Act of 1996’), challenging the judgment dated 21.01.2026 (‘impugned judgment’), passed by the District Judge (Commercial Court-01) at Patiala House Courts.

4. The appellant/Aloke Steels Industries Private Limited, is engaged in the manufacturing of bare iron and steel.

5. The respondent/Swiss Singapore India Private Limited, is engaged in the business of providing trading solutions and trades in coal, minerals and metals, fertilisers, etc.

FACTUAL MATRIX

6. On 06.03.2020, the appellant placed a purchase order of 12,000 Metric Tonnes (‘MT’) of South African Steam Coal RB2 from the respondent. Thereafter, a Sales Purchase Contract (‘the Sales Contract’) along with a Handling Contract was signed inter se parties on 11.03.2020. As per this contract, the price per metric ton was fixed at Rs. 5100 plus GST plus cess. As per Clause 7 of the contract, the appellant was liable to make 10% advance payment by 14.03.2020.

7. The respondent was ready for the supply of the Steam Coal on 11.03.2020; however, the appellant failed to make payment of the said 10% advance payment by 14.03.2020. The appellant stated that owing to the outbreak of the COVID-19 pandemic, its factory operations were shut down. 8. It was further stated by the appellant that the respondent called upon it to make payment on or before 21.05.2020, failing which the respondent would proceed to sell the goods to third parties in order to mitigate its losses. Thereafter, the respondent proceeded to sell the goods to third parties for a total value of Rs. 5,02,32,000/- as per Clause 7.4 stipulated in the contract.

9. On 22.05.2020, the respondent informed the appellant that it was allegedly entitled to recover a sum of Rs.1,57,94,706/- from the appellant towards total loss.

10. The appellant responded by asserting that, due to the force majeure situation arising from the COVID-19 pandemic, its industrial plant had remained shut since March 2020. Thereafter, the respondent invoked the arbitration clause contained in Clause 21 of the contract on 20.09.2020.

11. Subsequently, the Arbitral Tribunal passed the impugned award on 12.11.2021, vide which the appellant was made liable to pay Rs. 1,52,91,137/- wherein Rs. 1,33,60,000/- were awarded as damages and Rs. 19,31,137/- as cost of arbitration along with interest @12%. However, upon challenging the same, the District Judge vide the impugned judgment upheld the arbitral award.

Submissions on behalf of the appellant

12. Mr. Jeevesh Nagrath, learned senior counsel for the appellant, states that as per Clause 7.1 of the contract, the appellant was liable to pay 10% advance within three (3) days, which the appellant failed to do. There is no doubt that the default occurred at the instance of the appellant on 14.03.2020.

12.1. He states that the contractual quantity between the appellant and the respondent was 12,000 MT at an agreed price of Rs. 5,100 per MT, making the total contract value Rs. 6,12,00,000. In terms of Clauses 7.1 read with 7.3 of the contract, the appellant was required to deposit on