APHC010143982021 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI [3494]

(Special Original Jurisdiction)

THURSDAY, THE SIXTH DAY OF FEBRUARY TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE NINALA JAYASURYA THE HONOURABLE SMT JUSTICE SUMATHI JAGADAM COMMERCIAL COURT APPEAL NO: 17 OF 2021 Between:

Rashtriya Ispat Nigam Limited, (RINL), ...APPELLANT AND M/s Mauria Udyog Limited and Others ...RESPONDENT(S)

Counsel for the Appellant:

1. VIVEK CHANDRA SEKHAR S Counsel for the Respondent(S):

1. S RAJAN The Court made the following: (Per NJS,J)

ORDER:

The present appeal under Section 13 of the Commercial Courts Act, R/W Section 37 of the Arbitration and Conciliation Act 1996 (for short “the Act”), has been preferred by the appellant-petitioner aggrieved by the Order dated 07.01.2021 in CAOP No.41 of 2018, on the file of the Court of the Special Judge for Trial and Disposal of Commercial Disputes, Visakhapatnam, whereby the Arbitral Award dated 18.06.2018 / 18.07.2018 of the majority members was set aside in part only in respect of the rate of interest.

2) For the sake of convenience, the appellant-Rashtriya Ispat Nigam Limited is referred to hereinafter as “the RINL” and the 1^st respondent as the claimant.

BRIEF FACTS:

3) RINL is a Public Sector Undertaking manufacturing steel and allied products appointed „the claimant‟ as a consignment agent under agreement number VSP/MKTG/SY/19 of 2006-2007 dated 09.10.2009, for a period of seven years with effect from 31.03.2008 to 31.03.2015. After the expiry of the said seven years period, RINL addressed letters extending the consignment agency contract on certain terms and conditions, but the claimant vide letter dated 20.02.2015, as also subsequent communications informed „RINL‟ that it would execute the work during the extended period as per the terms and conditions of the Contract dated 09.10.2009, referred to above and continued to discharge its obligations. RINL, however, withheld an amount of ₹30,71,428/- from the bills on the premise that hard standing and yard development in the stock yard was not done till December 2008. It had also withheld 10% of the consideration amount from March 2015 to a tune of ₹1,04,62,801/- as on December, 2016 on the premise that the difference in rates between the existing contract and the new contract would have to be recovered. Thus, disputes arose between the parties, which ultimately lead to invocation of Arbitration Clause.

4) On entering reference, before the Arbitral Tribunal the claimant filed claim statement for release of penalty amount of ₹30,71,428 with interest of ₹48,53,964.54 ps., at the rate of 18% p.a., from the date of recovery to 28.02.2017. The claimant also sought refund of ₹1,04,62,801/- deducted from its bills during 2015-2016 and interest of ₹15,97,746.31 ps., at the rate of 18% per annum up to 20.02.2017. Subsequently, the claimant filed an amended statement of claim, mentioning that the illegally withheld 10% of the bill amount as on 31.10.2017 is ₹1,33,13,650/-. According to the amended claim, the total amount of ₹2,60,63,162 (gross, value of unpaid invoice of ₹2,18,87,219/-, plus interest for delay in payment of invoices of ₹41,75,943) has to be paid to the claimant towards the unpaid invoices and interest on the delayed payment of invoices, with further interest at the rate of 18% per annum, till the date of Award.

5) RINL filed its defence statement, inter alia, contending that the claimant being a consignment agency/contractor should fulfill its obligations under the contract, in particular, those relating to hard standing and basic infrastructure. With regard to conditional extensions, it stated that nothing prevented the claimant to simply refuse to accept the extensions. While contending that the claimant is not entitled to the claims, muchless the interest thereon, the RINL raised a counter claim to a tune of ₹1,32,46,669/-, towards difference of rates and Rs.22,00,000/-

towards compensation.

6) The majority members of t