* IN THE HIGH COURTOF DELHI AT NEW DELHI % Judgment reserved on: 09.04.2026 Judgment pronounced on: 20.04.2026 + O.M.P. (COMM) 416/2023 & I.A. 19782/2023 INDIAN SUGAR EXIM CORPORATION LIMITED .....Petitioner Through: Mr. Jayant Mehta, Sr. Adv.

with Ms. Shruti Sabharwal, Ms. AvlokitaRajvi, Mr. Lakshya Khanna, Mr. Bakhshind Singh and Ms. SidhikaNagrath, Advs.

versus SAKUMA EXPORTS LIMITED .....Respondent Through: Mr. Rajeeve Mehra, Sr. Adv.

with Mr. V AnushRaajan, Ms. Shreya V Mehra and Mr.

Pradyumn Yadav, Advs.

CORAM:

HON'BLE MR. JUSTICE AVNEESH JHINGAN

J U D G M E N T

1. The petition under Section 34 of the Arbitration and Conciliation Act, 1996 (for short ‘the Act’) is filed challenging the arbitral award dated 09.06.2023.

2. The brief facts are that the petitioner is engaged in the export of sugar. The respondent/claimant is in the business of commodity trading. Vide notification dated 28.09.2018 minimum export quota in respect of each sugar mill was notified, including the sugar mills of Uttar Pradesh. Thirteen contracts were executed between the parties to the lis. The present dispute germane from contract dated 10.05.2019 Signature Not Veri O fie (hereinafter referred to as ‘Morna Contract’), whereunder the petitioner had to supply 8,419 MT (+/- 5% on seller’s option) of Indian white sugar from the quota of Morna Sugar Mill. The delivery was to be completed before 31.05.2019. The respondent on 13.05.2019 entered into a contract with a foreign buyer-R&R Foodstuff Trading LLP, UAE for supply of 8,600 MT of sugar (hereinafter ‘export contract’) and shipment was to be completed by

30.06.2019.

2.1 It is the case of the respondent that due to failure of the petitioner to supply sugar the export contract could not be performed. The foreign buyer vide notice dated 08.07.2019 claimed damages of USD 645,000 for non-supply of sugar, which after negotiations were reduced to USD 498,800. The foreign buyer issued a debit note dated 25.07.2019 on the respondent. Vide communication dated 02.08.2019, the respondent requested the petitioner to supply the sugar within seven days. On failure of the petitioner to supply sugar, the damages claimed by the foreign buyer from the respondent were passed to the petitioner by issuing a debit note dated 08.08.2019 to the tune of Rs.3,61,20,000/-. The petitioner issued credit note no.21 dated 17.03.2020 for rupees two crores but it was withdrawn on 18.03.2020. 2.2 The contract between the parties provided for dispute resolution through arbitration and the respondent invoked arbitration on 14.12.2020 by issuing notice under Section 21 of the Act. The proceedings culminated in the impugned award. The arbitral tribunal (for short ‘tribunal’) held that the Morna Contract was neither novated nor substituted and that the petitioner failed to supply 8,419 MT of Signature Not Veri O fie sugar. The respondent under Section 73 of the Indian Contract Act, 1872 (for short ‘Contract Act’) was awarded damages of Rs.1,40,00,000/- for loss of profit and rupees two crores towards the claim raised by the foreign buyer against the respondent due to the non-performance of the export contract. Interest at the rate of nine percent per annum was granted.

3. Learned senior counsel for the petitioner contends that there was no co-relation between the Morna Contract and the export contract. In the alternative it is argued that no steps were taken by the respondent to mitigate the losses. The quantification of losses by the tribunal on guess work by deducting 50% towards expenses is in violation of Section 73 of the Contract Act. Reliance is placed upon the decision of the Supreme Court in Unibros v. All India Radio 2023 SCC OnLine SC 1366, the decisions of Division Bench of this Court in Delhi Transco Limited v. KEC International Limited 2025 SCC OnLine Del 3736, Union of India v. Ahluwalia Contracts (India) Limited 2025 SCC OnLine Del 4066, Nandi Infratech Pvt. Ltd. v. R.K. Bararia & Ors. 2024 SCC OnLine Del 4287 and the decisions of Si