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IN THE HIGH COURT OF KERALA AT ERNAKULAM
SATHISH NINAN, P.KRISHNA KUMAR
IMR Metallurgical Resources AG – Appellant
Versus
Hindustan Newsprint Ltd. – Respondent
JUDGMENT
Sathish Ninan, J.
The suit for damages was decreed by the Trial Court. The defendants are in appeal.
2. The plaintiff is a company engaged in the business of manufacture and sale of newsprint. The first defendant is a company registered in Switzerland, engaged in the business of exporting coal. The second defendant is the Indian agent of the first defendant.
3. For the manufacturing process of the plaintiff, they require coal. On 12.04.2007, the plaintiff floated a tender for supply of coal. The first defendant was the successful tenderer. As per Ext.A1, purchase order dated 06.06.2007, was placed for the supply of 45,000 MT of coal. The defendant failed to supply. The plaintiff was constrained to purchase coal from alternate sources. The consequent loss suffered is sought to be realised.
4. The defendants contended that the contract was frustrated due to force majeure. The inability to perform was due to heavy floods and strike at the sites of the coal mines. It was also contended that the defendant was not put on notice with regard to the proposal to procure coal from alternate sources and that the defendant is not liable for damages.
5. The trial court negatived the plea of f
A claimant cannot assert frustration of contract based on force majeure conditions if those conditions were previously contemplated and stipulated in the contract.
The court emphasized that proof of actual damages is essential for recovery under liquidated damages, aligning with contractual principles.
The fundamental basis of a contract must be altered for the doctrine of frustration to apply, and mere market fluctuations or increased costs do not constitute grounds for exemption from contractual ....
Actual damages must be proved for recovery in breach of contract. Clauses implying penalties cannot be enforced without valid demonstration of loss.
The main legal point established in the judgment is the requirement for written and mutually agreed amendments to a contract, and the recognition of mitigation of loss by the plaintiff.
A carrier may not escape liability for damages by mere assertion of an act of God if negligent handling is evident; endorsements on transport documents establish ownership for claims.
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 o....
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