The court upheld the invocation of the force majeure clause by the first respondent, ruling that the applicant had accepted the contract's termination and had no grounds for an injunction.

ORDER :

P.B.Balaji, J.

I have heard Mr.P.V.S.Giridhar, learned Senior Counsel for the applicant, Mr.R.Sankaranarayanan, learned Senior Counsel for the first respondent and Mr.Rahul Balaji, learned counsel for the second respondent and I have gone through the affidavit and counter affidavit filed by the respective parties and also the supporting documents.

2. The application was moved by the learned Senior Counsel on 17.12.2024 and I was pleased to grant exparte interim injunction restraining the first respondent from supplying natural gas in respect of the area contracted by the applicant under the Gas Supply Agreement dated 18.09.2009 to any third parties, for a period of four weeks. Subsequently, the first respondent appeared and also filed a counter seeking for vacating the said exparte interim order granted by me. Pending the above application, the applicant has taken out yet another application in Application No.407 of 2025, seeking a direction to the first respondent to produce the documents mentioned in the schedule to the Judges Summons. Though no counter affidavit has been filed by the respondents in the said application, the learned Senior Counsel Mr.R.Sankaranarayanan appearing for the counsel for the first respondent made his oral submissions and therefore, the said application has also been heard and orders were reserved along with applications in O.A.No.968 of 2024 and Arb. Appln No.884 of 2024.

3. The learned Senior Counsel Mr.P.V.S. Giridhar, appearing for the applicant would take me through the contract entered into between the applicant and the first respondent by way of a Gas Sale Contract (GSC) dated 18.09.2009 and the Gas Supply Purchase Contract (GSPC) between the petitioner and the second respondent. He would also invite my attention to the tripartite settlement agreement, which was also entered into on the same day between the petitioner and the respondents.

4. The learned Senior Counsel by referring to the definitions of relevant terms and expressions in the Gas Sale contract dated 18.09.2009, would take me through the terms and conditions agreed upon between the petitioner and the respondents.

5. The sum and substance of the arguments of the petitioner is that the first respondent had no right to invoke the force majeure clause and by referring to various communications between the parties, the learned Senior Counsel would submit that certain barriers were recognised, even at the time of entering into the contract and therefore, the first respondent cannot invoke the force majeure clause and terminate the contract. He would further submit that the motive of the first respondent is malafide and the only intention of the first respondent is to enter into a fresh agreement for higher consideration with third parties and for such reasons, the first respondent cannot be permitted to invoke the force majeure clause, without any justification or situation warranting such invocation.

6. Further arguments of the learned Senior Counsel are that the parties had clearly agreed upon for duration of the contract which shall be for a primary term of 15 years from the commencement date and the parties had also clearly defined that the run-in-period and commencement date, build up period, plateau period, fulfillment quantity and fulfillment date. However, during the build up period, the first respondent was not even able to offer the agreed 51000 MMBTU / day of DCQ and consequently the second respondent was unable to lift the gas and consequently compelled the second respondent to stop off taking the gas, citing less supply. This necessitated an amendment to the GSC on 10.07.2013, in and whereby vide amendment was entered into between the second respondent and the applicant and the first respondent added a new clause Article 7.2(i)(a) governing the build up period. The learned Senior Counsel would refer to the obligations of the first respondent and invite my attention to the Annexure - II, which set out the contract area. A